Norway's legislation on oil security

Part of Oil Security Toolkit

With respect to oil supply security, Norway’s response to supply disruptions is primarily governed by the provisions of the 2006 Regulation relating to Petroleum Product Storing for Emergency Purposes (RPP). The 2006 Regulation has been enacted pursuant to the terms (articles 1-2) of the 2006 Act of Petroleum Product Storing for Emergency Purposes (APP). The Norwegian 1996 Petroleum Act provides the framework for upstream oil and gas activities on the Norwegian Continental Shelf.


According to article 11 RPP, the emergency provisions of the RPP are triggered when there exists a national or international supply deficit. Further, the provisions of the RPP may be utilised by the Ministry of Petroleum and Energy after consulting the Ministry of Foreign Affairs, when the International Energy Agency (IEA) asks Norway to participate in an Initial Coordinated Response Plan. ##anchor1##


For the purposes of the RPP, it is the King who may by Order in Council declare that the emergency provisions of the RPP are operative. As considered above, the King may do so in response to a domestic or international supply disruption, or when the IEA asks Norway to participate in an Initial Coordinated Response Plan (article 11 RPP).


General

In accordance with APP article 1, The Norwegian King in Council has enacted regulations to require that importers or producers of petroleum products or bio fuels may establish and maintain stocks of such products. Moreover, article 1 APP specifies that the King can enact regulations concerning the addressees of the country’s stockholding obligations (article 1(a) APP), the products which are to be stocked (article 1(b) APP), the quantity of products to be stocked (art. 1(c) APP), how stocked quantities may be used (article 1(d) APP), and the King may stipulate detailed rules concerning reporting requirements (article 1(e) APP). Such specific and permanent provisions are enacted in the RPP.

Storage Agency

Norway does not have a Central Stockholding Entity. Instead, Norway imposes stockholding obligations on oil importers and oil producers (article 2 RPP) who imported quantities of oil equal to or in excess of 10 000 Sm3 during preceding year (or who are expected to import/produce such quantities in the coming year). When determining whether or not an entity is subject to a stockholding obligation, the Ministry is entitled to combine quantities from different entities that form part of the same company or group of companies (article 2 RPP). Unless otherwise specified, emergency stocks may be comprised of gasoline, heavy fuels or auto diesel, diesel for construction purposes, light heating oil, kerosene, jet A1, marine distillates (article 3 RPP).

Storage Quantity

According to article 4 RPP, the quantity of emergency stocks shall “correspond to 20 days of consumption of the total amount of products comprised by the compulsory stockholding obligation [that] the enterprise in question has sold or consumed in the preceding...year”. Addressees of the stockholding obligation that have not imported or produced products “comprised by the compulsory stockholding obligation in the preceding year, are obliged to maintain stocks corresponding to 20 days of [that] consumption” which addressees are expected to produce or import in the current year. (article 4 RPP).

Availability of stocks

Norwegian primary legislation does not provide for specific criteria concerning the availability of emergency stocks. However, the RPP does stipulate that a maximum of 40% of emergency stocks may consist of crude oil, condensate or semi-finished products (article 6 RPP). Further, stocks may be stored by others on behalf of an addressee of the stockholding obligation (article 8 RPP) provided that the volumes stored by others can be released with a fixed period (which the RPP does not specify) in case of emergency.

Storage Locations

Norwegian primary legislation does not specify geographic storage locations. However, by default, stocks are to be stored in facilities (production sites, harbours, oil pipeline terminals, tankers) owned by the addressees of the stockholding obligation (art. 6 RPP) in Norway. By default, up to 20% of an addressee’s stockholding obligation may be satisfied by stocks stored abroad (article 9 RPP). In special circumstances, up to 75% of an addressee’s stockholding obligation may be satisfied by stocks stored abroad. When determining whether to grant such an exception, the Norwegian authorities are required to consider the geographic proximity of such stocks, the means by which they would be transported to Norway and the Norwegian market, the extent to which the products are adapted to the Norwegian marked and what kind of ownership controls the emergency stocks (article 9 RPP).

Sale of excess stocks

N/A


General

In times of emergency, the King is entitled to direct the addressees of the stockholding obligation to utilise/release such volumes of stock ‘as required regarding the actual situation’ (article 11 RPP). With the exception of this provision, the RPP does not contain specific guidance on oil emergency measures.

Stockdraw

Sale/Tender

Norwegian legislation does not explicitly refer to stock-draw measures as emergency measures. However, article 11 RPP provides that, in emergencies, emergency stocks are to be used to such an extent ‘as required regarding the actual situation.’ Further, emergency stocks should be ‘utilized in such an extent and magnitude as needed in the light of the actual situation.’ Finally, article 11 RPP stipulates that released emergency stocks are to be rebuild ‘within a reasonable time period’ once emergency conditions have seized to exist.

Production Surge

Norwegian primary legislation does not appear to provide for production surge in response to oil supply disruptions.

Demand restraint

Norwegian primary legislation does not appear to provide for demand restrains measures in response to oil supply disruptions.

Fuel Switching

N/A

Relaxations of Road Traffic and Transport Laws

N/A 


The Norwegian emergency regime is monitored and enforced on the domestic and international level. Each will be considered in turn.

Domestic

Reporting duties

The addressees of the Norwegian stockholding obligation are obliged to provide the Ministry with information concerning the quantity of the addressee’s imports, sales, current stocks etc. four times a year (article 10 RPP). When submitting the respective information, the addressees of the stockholding obligation also need to confirm that they are in compliance with their stockholding obligation (article 10 RPP).

Enforcement

Article 2 APP provides that the Norwegian authorities may impose fines upon commercial actors for violating the terms of the APP (see also article 16 RPP). Any fine imposed my not exceed 10 million Norwegian Kroner. Article 2 APP authorises the ministry charged with overseeing the implementation of the APP to make more detailed provisions regarding sanctions related to the violation of the terms of the APP. Overall supervisory responsibility lies with the Ministry.

Further, the RPP entitles the Ministry to access facilities where emergency stocks are stored to determine that the stockholding commitment is being fulfilled (article 13 RPP).

International

The IEA

Norway is a member of the IEA and, as such, in principle subject to the stock holding obligations imposed upon members by the International Energy Programme (IEP). However, as a net-exporter of oil, Norway is not at present required to maintain oil reserves. Nonetheless, Norway is obliged to submit information concerning its emergency measures to the IEA secretariat (article 32 IEP) on a continuous basis. While the IEA monitors Member country’s compliance with the IEP, the IEP does not, however, make any provision for the enforcement of any obligations imposed by the IEP.

References
  1. The APP and RPP were transferred to the Ministry of Trade, Industry and Fisheries in 2017, and are currently being revised. The Norwegian 1996 Petroleum Act is still administered by The Ministry of Petroleum and Energy.