Specific characteristics of implementation of licensing and qualification system of market participants as fundamentof institutional regulation mechanism in Norways oil-and-gas industry

In the article the experience of Norway in harmonizingrealization of national interests in the oil-and-gas industry is analyzed. The subject of national interests and the main task for thestate should ensure the curtailing of corporate interests, on the one hand, and encouraging the private companies to the rational and efficientuse of hydrocarbons, on the other hand; so, that the total value of resources is maximized and sustainable development of the nationis secured. The realization of national interests is anchored in the institutional mechanism of regulation of oil-and-gas industry,which regulates mutual relations between the state and the resources users, fixes duties and rights of resources users. This mechanismcan take form of concessions, production shared agreements (PSA) or licensing at different stages of the development of oil-and-gasbranch. Actually the licensing procedure is used in the state regulation of oil and gas sector in the Kingdom of Norway and the RussianFederation. Since the start of oil and gas extraction Norway has reached significant success in the realization of state-national interestand will be appreciated for its institutional regulation, the central part of which is its system of administrative licensing. The main featuresof Norwegian licensing system are the following: 1. Equalization of the profitability of different pieces of land under license throughthe combination within one license of deposits with better and worse quality. This has made useless any lobbying for corporate actors, becauseall licensing pieces became equally profitable. Therewith, the conditions for competition in the branch were assured. Besides the investments inthe smaller deposits could be gained. 2. Execution of licensing process according to the needs and interests of stakeholders and the societyon the whole. The national parliament decides about the opening of new pieces of land for exploration and drilling by evaluating byeffectsof oil and gas industry on economics, environment and society. Consideration of corporate interests is assured through mutualconsultations at different stages of licensing process. 3. Procedure of license granting consists of several stages and is distinguishedthrough stringent control of several state authorities, rigid regulation of the exploitation process and inclusion of external effects. 4. Requirementof obligatory participation of one state company on the consortium (Statoil until 1999, now - State Direct Financial Interest),as well as requirement to build up special committees, consisting of state representatives and employees of consortium, for execution ofproduction control and operational tasks. This allows guaranteeing the fulfilment of exploitation conditions accordingly to license, neutralizingthe risks of information asymmetries and assuring certain financial inflows to the state irrespectively of net income figures. 5.Concerning the implementation of licensing procedure, it should be added that a course on an objective, impartial and maximum transparentlicensing process in line with the country development is aimed at. In addition to the licensing procedure and in order to ensurethe efficient resources exploitation in 2000 a qualification procedure of the market participants was implemented. Within the frameworkof this procedure all companies, which aim to get a production license, must pass the procedure of qualification. Hereby they must verifythat they possess all necessary competence and know-how for resource management and safety of production. Also their financialstrength, organisational structure, production history (including the statistics of accidents) will be evaluated.

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