‘Krone’ Sinks Along With Oil Business; How Will Norway Adapt?
The cost of a barrel of Norway’s North Sea crude oil is going down this week. It is happening for the first time since June. This creates big questions about how the oil and gas producers can make a profit from their offshore oil fields. Some are more expensive than revenues. Traders reacted as quickly as always. It costs NOK9.13 to buy one US dollar. Last week it was 8.77. That is weakening, even though that the krone is still stronger than it was in the spring. Lower oil prices and a weaker currency is a big sign of a gloomy future for the Norwegian economy. Several oil manufacturers are being blacklisted and they are trying to find new ways into energy projects.
There is news that in Portugal there are children who are suing 33 countries including Norway at the European Court Of Human Rights. They are blaming oil industries for climate changing and forest fires. Investors and politicians think that Equinor and other companies on the Norwegian shelf are not moving quickly enough to address climate or any issue.
Since the oil’s price fell and the krone is weaker, the oil and gas business is already in a bad place now. At the end of this year, there may be even cutting jobs. Many companies are already trying to manage the maintenance of the operations and staff.
Norway is heading into a hard economic cycle.
Why the Krone is tied to oil prices
Norway’s currency was always tied to the value of its most important and export product – oil. So, when oil trading goes down, the krone is battering as well.
There is simply way too much oil on the market at present. Why? Because of coronavirus, airlines are not flying. Commuters are not driving cars and people over the world are told to stay at homes to limit infection. That all is pushing the oil market severely out of balance.
What Norway can do during the economic crisis
Some people think that oil demand may never turn back to historical levels, at least because of climate concerns. Norway should find a new way to diversify its economy to make it less dependent on oil.
For example, the Saudi-Arabia diversified economy away from oil with entertainment and technology. Promoting these two fields led to an expanded tourism sector. It also has provided so many job opportunities that now the jobless people rate is lowered. To promote tourism, this country planned to bring hundreds of billions of dollars in public and private investments for roads, hotels, airports, and entertainment centers.
Entertainment in Norway
In today’s materialistic world it’s important to change some old views of having fun. Entertainment is one of the basic needs of humanity. People from all over the world like to do different things. Some go shopping, some to movies and theatres, some people enjoy gambling, some prefer to go to concerts or events. Oslo is the culturally blessed place but somehow it needs to try different things to be even more popular among tourists. There are a large number of museums, exhibitions, and art galleries but if you look through a gambling scene, it’s not much to satisfy human curiosity. Maybe that is because The main gambling companies are owned by the government. Based on the reports from Casino på nett EU, a leading gambling media outlet in the region, Norway is poised to make billions of Euros in just tax payments by privatizing this industry, but the government needs to give the opportunity to them. Most of the people are still using online platforms to satisfy their needs to gamble or have a decent amount of fun while playing. Oslo is the place where one can do and invest money in entertainment and never be disappointed with this choice. Many respected personalities were born here. For example Knut Hamsun and Henrik Ibsen. They have given some valuable contributions in their fields. The movie centers and theatres are going to entertain many people to the fullest but little changes won’t hurt anybody.
Technologies in Norway
Norway is a country full of innovations. Amazing maritime and energy resources are not everything they have got. Flat business structure, intellectual property rights protection, and the wish to get better all the time is making this country a perfect place for dynamic companies. Yet, despite the big natural energy and opportunities, this country fails to compete with leading neighboring countries: Sweden and Denmark. When it comes to attracting technologies from foreign investments, they are not the best in it.
Norway is not a cheap offshore location. This country is rated as one of the best countries in the world for quality of life. Norway can be nirvana for companies that match well with the industries that are blooming in there. There are some examples of good fields to invest in:
1.Clean tech
2.Energy
3.Maritime industries and research
4.Real estate’
So there are some good fields one can invest in. Norwegian politics and business environments are very welcoming to technology advances. This country is more than happy to receive advanced technology companies and bring them into their wing. Norway continues to have a low unemployment rate. Norway’s customer base ( also industrial) is one of the world’s wealthiest and they don’t think twice when ordering high-end technology items to ensure that they have the best types of equipment.
If there are people who are thinking about investing in Norway, Don’t think too much. This is the place in the world where innovation will only continue to develop in exciting new directions. Yes, Norway is not better than Sweden or Denmark but the trend is changing and the government is getting softer and softer towards research and development projects. The business climate in Norway is ranking eighth in the world according to the World Bank’s Ease of Doing Business rankings. With the boost of a dynamic internal market, Norway represents the perfect location for many companies.
