The Iraqi who is "perhaps the greatest value creator Norway has had"

When I worked in the financial world, the joke the sales people told me about folks from the Norwegian Petroleum Fund was that you couldn't even offer them a bottle of water when they came to visit. They had strict rules about accepting gifts from their brokers. That's a smart, if extreme, policy because, as you might know, a lot of money (most of which the customer ultimately pays) goes to food and entertainment for building personal relationships in the business world. But none of that really matters to figuring out which institutional brokerage could minimize transactions costs for the people of Norway. Talking to them in person confirmed that these folks from Norway were more attentive to detail and interested in real costs than most.

So this article in the Financial Times entitled, "The Iraqi Who Saved Norway From Oil" , pointed out to me by a friend, is wonderfully consistent with my own little experience. It's the story of Farouk al-Kasim, an Iraqi geologist who married a Norwegian woman, moved to Norway to seek treatment for his son's cerebral palsy, avoided Saddam Hussein and the Iran-Iraq war, and helped build the Norweigian oil industry.

This extract, on an example of successful government regulation, is worth highlighting:

"Farouk is perhaps the greatest value creator Norway has had," says Olsen. And with good reason. Most of the oil found in the world is never recovered: the average extraction rate worldwide is around 25 per cent. Norway averages 45 per cent, and for that, Olsen gives al-Kasim much of the credit: he pushed the government to increase extraction rates; insisted that companies try new technologies, such as water injection in chalk reservoirs or horizontal drilling; and threatened to withdraw operating licences from companies that balked. “It is this culture, a culture of ‘squeezing the last drop out’, which he cultivated,” says Olsen.The extraction rates al-Kasim forced through significantly boosted oil and gas revenues – and so indirectly, the size of the savings fund. But the culture of pursuing the “last drop” brought greater benefits than just money pouring in. It spurred the development of technological expertise that has enabled Norwegian companies to compete with the best in the world. This, then, is a striking case of strong state regulation ultimately benefiting the private sector. “Norway is the only country in the world where the state and the capitalistic entities work together as partners, and the co-operation works, really works,” says al-Kasim. Paradoxically, state involvement makes this easier. “To put it very simply, you put your wallet where your mouth is … When you take 50 per cent of the risk, and other companies take maybe 15 per cent tops, it is hard for them to say you’re crazy, right?”