Minister of Trade and Industry Ansgar Gabrielsen paved the way for the fusion of the oil and gas divisions of Statoil and Norsk Hydro. The only condition is that the companies agree.
This decision reveals a deep split within the self-proclaimed “Cooperation Government” on perhaps the most central question about oil and business policy. Minister of Petroleum and Energy Einar Steensnæs, a Christian Democrat, told Aftenposten on Jan. 18 that it was important for competition to have two oil groups.
Conservative Party member Gabrielsen said that the need for diversity in the number of Norwegian agents was less important now than it was a few years ago. Gabrielsen believes there is nothing wrong with having one strong Norwegian company that can compete with major foreign firms.
The Norwegian state owns 80 percent of Statoil and 44 percent of Hydro. The state would have full control of the result of a fusion, with about 70 percent ownership. The market value of the new company would be about NOK 200 (USD 22.75) billion.
A fusion between the gas and oil divisions of the two giants would not just create a dominant force holding more than 70 percent of operations, it would slash the number of workplaces in the oil industry.
Hydro’s employees have already warned against such a fusion.