In 1969, when Phillips Petroleum struck oil at the Ekofisk field in the North Sea, Norway faced a pivotal moment. Unlike many resource-rich nations that squander windfalls or cede control to private giants, Norway charted a deliberate path—often called “The Norway Way”—that transformed finite oil into enduring wealth. This approach offers a powerful lesson in foresight, discipline, and balancing state control with global cooperation.
The Core Strategy
1. State Ownership with a Purpose: Norway didn’t just discover oil—it claimed it. The government established Statoil (now Equinor) in 1972, ensuring the state held significant stakes—often 50% or more—in every oil license. Foreign firms like Shell or Exxon could explore and operate, but Norway retained the lion’s share of control and profits.
2. The Sovereign Wealth Fund: In 1990, Norway went further, creating the Government Pension Fund Global (initially the Petroleum Fund). Every oil dollar flowed into this “national savings account,” with a strict rule: only 3% could be spent annually (originally 4%, adjusted in 2017). The rest? Invested globally in stocks, bonds, and real estate for future generations.
3. Long-Term Vision: Rather than splurging on short-term gains, Norway prioritized stability. Oil revenues weren’t frittered away on tax cuts or populist handouts—they were safeguarded to avoid the “resource curse” of inflation and economic volatility seen elsewhere.
The Payoff
The results speak volumes. By March 2025, the fund is worth over $1.7 trillion—roughly $300,000 per Norwegian citizen (population: 5.4 million). It owns about 1.5% of all global stocks, from Apple to Toyota, making Norway a financial superpower. In 2020 alone, oil revenues hit £9 billion, dwarfing the UK’s £0.4 billion from the same North Sea basin.
Citizens don’t get direct payouts, but they enjoy a world-class welfare state—free healthcare, education, and infrastructure—funded by this wealth.
Why It Worked
- Discipline: The 3% spending cap prevented reckless splurging, unlike oil-rich states like Venezuela, where mismanagement led to collapse.
- State Control with Collaboration: Norway leveraged foreign expertise without losing sovereignty, striking a balance the UK missed by privatizing too much, too fast.
- Future Focus: By saving rather than spending, Norway turned a depletable resource into a perpetual asset, insulating itself from oil price swings.
Contrast with the Past
Compare this to the UK, which found oil in 1970 (Forties Field) but sold its reserves under Thatcher’s privatization push. The UK reaped short-term gains—economic stabilization, tax cuts—but by 2020, its oil revenue was a trickle, with wealth concentrated in corporate hands. Norway’s lesson stands out: policy matters more than the resource itself.
The Broader Takeaway
The Norway Way teaches that resource wealth isn’t a lottery ticket—it’s a test of governance. Success hinges on resisting the temptation of instant gratification and instead building systems that prioritize the collective future. For nations today—whether rich in oil, lithium, or rare earths—Norway’s past offers a blueprint: retain control, save strategically, and think generations ahead. It’s not about having resources; it’s about what you do with them.