Farouk al-Kasim, a young Iraqi geologist from Basra, married a Norwegian girl he met while working in London — and that eventually led him down an amazing career path:
For all its uncertainties, al-Kasim’s journey to Norway had a clear purpose: he and his Norwegian wife, Solfrid, had decided that their youngest son, born with cerebral palsy, could only receive the care he needed there. But it meant turning their backs on a world of comforts. Al-Kasim’s successful career had afforded them the prosperous lifestyle of Basra’s upper-middle class. Now they would live with Solfrid’s family until he could find work, though he had little hope of finding a job as rewarding as the one he had left behind. He was not aware that oil exploration was under way on the Norwegian continental shelf, and even if he had known, it wouldn’t have been much cause for hope: after five years of searching, still no oil had been found.But al-Kasim’s most immediate problem on arriving in Oslo that morning was how to fill the day: his train to Solfrid’s home town did not depart until 6.30pm. “I thought what I am going to do in these hours?” he says. “So I decided to go to the Ministry of Industry and ask them if they knew of any oil companies coming to Norway.”
He deposited his luggage and walked to the ministry, where he was received by a baffled official who told him to come back that afternoon. When he returned, expecting only an address list, several men were waiting for him. “They were keen to know what had I been doing, what kind of education I had, whom I worked for. Did I work as a petroleum engineer? Did I work as a geologist? What did I do?” His request for a list of possible employers had turned into an impromptu job interview. “They must have been absolutely desperate for expertise!” says al-Kasim. They were indeed. At the time of his surprise call, Norway’s oil administration numbered just three officials, all in their thirties and all learning essential parts of the job as they went along. Meanwhile, the North Sea exploration results were pouring in and required careful analysis. Al-Kasim must have looked like a godsend: a man rich in academic training and practical experience of the oil industry — and one in need of work.
And that’s how he became the Iraqi who saved Norway from oil:
Poor countries dream of finding oil like poor people fantasise about winning the lottery. But the dream often turns into a nightmare as new oil exporters realise that their treasure brings more trouble than help. Juan Pablo Pérez Alfonso, one time Venezuelan oil minister, likened oil to “the devil’s excrement”. Sheikh Ahmed Yamani, his Saudi Arabian counterpart, reportedly said: “I wish we had found water.”Such resignation reflects bitter experience of the way that dependency on natural resources can poison a country’s economic and political system. Inflows of hard currency push up prices, squeezing the competitiveness of non-oil businesses and starving them of capital. As a result, productivity growth withers (a phenomenon known as “Dutch disease” after the negative effects of North Sea gas production on the Netherlands). Meanwhile, the state institutions in charge of oil often become corrupt and evade democratic control. And oil-rich states almost invariably waste the income it brings, many ending their oil booms deeper in debt than when they started.
This is better understood today than it was 40 years ago. When al-Kasim arrived in Oslo, no one was worrying about how oil might challenge Norway — in part because they didn’t think any would be found. The Geological Survey of Norway had dismissed the possibility just 10 years earlier.
The politicians and senior bureaucrats had not caught oil fever. A serious mining accident had recently brought down a government, and most did not want to touch oil matters with a bargepole. “Everything I said was met with, ‘Oh, you think so? Mmm. Maybe. Let’s wait and see’,” al-Kasim recalls. “This characteristic saved Norway from the curse of oil: the fact that they are completely incapable of getting carried away by the oil dream. They were very sceptical — plain horse sense basically. They didn’t want to move until it was absolutely proven that it was the right time to act.”
His was a lonely, contrarian voice. After examining exploration results, he wrote a report that warned Norway was sleeping, that even though no one had found oil yet, it was only a question of time. And time was short: the country’s leaders needed to prepare Norway to become an oil nation, but they were doing nothing. “I was a constant reminder that they were doing everything wrong,” al-Kasim says pointedly. Only his closest colleagues would listen.
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Norway’s state oil company, StatoilHydro, is internationally recognised as a competitive commercial player and one of the most environmentally and socially conscious ones to boot. Since 1996, every krone the government has earned from oil has gone into a savings fund, which now totals some £240bn — more than a year’s gross domestic product and equivalent to about £50,000 for each of Norway’s 4.8 million citizens.The real achievement, in other words, was not finding oil but coping with its discovery. Norway faced the same dilemma as every other new oil producer with no experience of the industry: if you rely too much on private foreign companies, too little of the oil wealth benefits the country in the form of government revenue or economic development; if you go too far in the other direction, you risk a bloated, politicised oil sector that evades both accountability to the people and competitive pressures to be efficient.
A balance had to be struck. Al-Kasim recalls now that one thing was clear in the early 1970s: Norway would join an international trend towards significant state participation in the oil sector. The Labour government “wanted this to be the new impetus in Norwegian industry”, he says. “And for that to be done properly, according to a socialist, the state has to be in the driver’s seat.” Al-Kasim agreed with that view, and so landed the job of writing the nation’s blueprint for how it would organise its fledgling oil industry.
The office was no place for this work, al-Kasim and a colleague decided. So on a summer day in 1971, they left Oslo for the colleague’s cabin in the woods, where they spent what al-Kasim remembers as the most exciting work week of his life. They worked on the plan into the early hours, taking fishing trips “between the battles”, he recalls. By the time they came home, they had drafted a government white paper that was later presented to parliament and unanimously waved into law. This created the Norwegian Petroleum Directorate, the oil industry regulator, and Statoil, the national oil company (now known as StatoilHydro).
The trick of the Norwegian model was to retain the private sector’s competitive drive and its expertise — which Norway sorely needed — by making sure that the regulator was independent enough to rein in the state oil company as well as its private-sector peers. This was not secured without a fight. Statoil, after all, was going to generate a lot of money — and very soon it did. Willy Olsen, a fast-talking former Statoil manager, says: “Statoil and the Norwegian Petroleum Directorate didn’t have the friendliest of relationships. The first 10 to 12 years, the institutions were very unbalanced — Statoil was much heavier. NPD had to fight to gain respect, and for that it needed enthusiasts with enough competence that they could not be dismissed.” That became al-Kasim’s mission — and his job for the next two decades — as the regulator’s director of resource management.