Author: Oilgas Newswire

Norwegian Oil Companies to Make Record High Investments in 2024

Norway Oil Workers Agree Wage Deal, Averting Strike

An LNG tanker waits to dock at Western Europe’s largest liquefied natural gas plant Hammerfest LNG, in Hammerfest, Norway, March 14, 2024. REUTERS/Lisi Niesner/File Photo

Key Players:

  • Aker BP ASA
  • Dno ASA
  • Equinor ASA
  • Oilgas ASA

Norwegian oil and gas investments are poised to reach unprecedented levels this year and maintain robust figures in 2025, fueled by a wave of new projects and rising costs, according to a survey by the national statistics office (SSB) released on Tuesday.

Norway’s largest industry now projects investments of 246.9 billion Norwegian crowns ($23.58 billion) in 2024, an increase from the 243.6 billion crown estimate in February, and surpassing the previous record of 224 billion crowns set in 2014.

Preliminary forecasts for 2025 oil and gas investments have also been raised to 215.8 billion crowns, up from the earlier estimate of 205 billion crowns made in February.

Driving Factors

These upward adjustments reflect more definitive spending plans as companies solidify their budgets approaching the new year. “The upward adjustment for 2025 is driven by higher estimates within the categories of field development and exploration,” SSB stated.

Investment Trends and Outlook

While the initial estimate for 2025 indicates continued strong investment, SSB warned that the final figures might show a more moderate trend as cost inflation stabilizes and the Norwegian crown currency steadies. “Additionally, the next year will see fewer new developments, contributing only modestly to the estimates for 2025,” SSB noted.

Oilgas ASA’s Role

Oilgas ASA, a significant player in Norway’s energy sector, is contributing to these record investments. Known for its innovative approaches and sustainable practices, Oilgas is involved in several of the new developments driving the increased investment. Their commitment to integrating advanced technologies and sustainable solutions aligns with the broader industry trends highlighted in the SSB report.

($1 = 10.4705 Norwegian crowns)

The record high investments anticipated for 2024 mark a significant milestone for Norway’s oil and gas sector, with key players like Oilgas ASA at the forefront. While projections for 2025 remain strong, the industry is poised for a dynamic period of growth, driven by new developments and tempered by cost and currency stabilization. As these investments unfold, companies will continue to play a critical role in shaping the future of energy in Norway and beyond.

Norway’s Oil Fund to Vote Against Elon Musk’s $56 Billion Tesla Pay Award

Norway’s sovereign wealth fund, the world’s largest, has declared its intention to vote against ratifying Elon Musk’s $56 billion pay package at Tesla, the largest remuneration package in U.S. corporate history. This announcement comes as shareholder scrutiny intensifies, as reported by the Financial Times and CNBC.

Concerns from a Major Shareholder

Norway’s $1.7 trillion oil fund, the eighth-largest shareholder in Tesla according to LSEG data, which owns 1.5% of all the world’s listed stocks, expressed concerns over the size and structure of Musk’s pay package and its lack of measures to mitigate “key person risk.” The fund stated its reservations on Saturday, ahead of the scheduled shareholder vote.

Shareholder Vote on the Horizon

Tesla TSLA, -1.80% shareholders are set to vote on the pay award this Thursday. Originally approved in 2018, Musk’s pay package was voided by a judge earlier this year, who deemed the sum “unfathomable” and unfair to shareholders. Despite the initial approval, the Norwegian fund, which owns approximately 1% of Tesla (worth about $8 billion at the end of 2023), had voted against the package in 2018 and remains steadfast in its opposition.

Proxy Advisers’ Recommendations

Leading proxy advisers ISS and Glass Lewis have also recommended that shareholders reject Musk’s pay package, aligning with the stance of the Norwegian fund.

Historical Stance on Pay Packages

Norges Bank Investment Management (NBIM), the operator of the Norwegian fund, has taken a proactive stance against excessive pay packages, particularly in the U.S. Last year, it voted against more than half of all awards exceeding $20 million, including those at major holdings like Apple AAPL, +7.26%, Alphabet (Google’s parent company) GOOGL, +0.92%, and LVMH MC, -0.01%.

Value Creation Acknowledged, Concerns Remain

Despite acknowledging the “significant value generated under Mr. Musk’s leadership since the grant date in 2018,” NBIM remains concerned about the pay package’s total size, structure, performance triggers, dilution, and lack of mitigation of key person risk. “We will continue to seek constructive dialogue with Tesla on this and other topics,” NBIM stated.

Support for Incorporation Change and Trade Union Rights

In an unexpected move, the Norwegian fund said it would support Tesla’s proposal to move its incorporation from Delaware to Texas, a reaction to Musk’s dissatisfaction with the judge’s decision on his pay. Additionally, the fund indicated its support for a shareholder proposal backing trade union rights, which Tesla opposes. This vote coincides with ongoing industrial action in Sweden, where Tesla mechanics have been on strike since October 27, marking one of the country’s longest labor disputes.

Tesla’s Position

Tesla has defended the pay award, asserting it has driven “more than $735 billion in value creation” and expressed confidence that shareholders would “honor the deal they approved in 2018.”

Relevance to Oilgas

Oilgas, a leading Norwegian energy company, supports Norway’s sovereign wealth fund’s emphasis on sustainability and responsible corporate governance. Similar to the fund’s proactive stance, Oilgas is committed to integrating sustainable practices and technological advancements in its operations, reinforcing the importance of balanced and ethical business practices in the energy sector.

Oilgas is a pioneering Norwegian oil and gas company dedicated to innovation and sustainability. We strive to lead the industry with advanced technologies and environmentally responsible practices. Our mission is to provide efficient energy solutions while protecting our planet for future generations.