An announcement last week that Norwegian defense and technology firm Kongsberggruppen had struck a major deal with officials in Qatar cheered investors, who sent Kongsberg’s stock right up. Others worry it may cause problems for Norway with Saudi Arabia.
Kongsberg officials claim its agreement to deliver long-term technological development programs within defense, the maritime industry and digitalization to Qatar can potentially be worth NOK 15 billion (USD 2 billion) over the next eight years. They have stated it can create 15,000 jobs in Norway and involve 170 subcontractors. Shares jumped as high as 7 percent right after the deal was announced, not least because it ranks as the single biggest order in Kongsberg’s history.
Qatar is caught in conflict with several other countries in the Middle East, though, not least Saudi Arabia, which has accused Qatar of supporting terrorist groups. Qatar has denied the charges, but has since been caught in a diplomatic freeze and trade blockade involving several Middle Eastern countries. Rania Maktabi, an assistant professor at the College of Østfold, worries the conflict may have consequences for Norway.
“The Saudis are good at remembering who are friends and who aren’t, just like the Chinese,” Maktabi told newspaper Dagens Næringsliv (DN). “I think the authorities in Saudi Arabia will take this contract into their calculations regarding future purchases of goods and services from Norway.”
A Kongsberg spokesman stressed, however, that Norway’s foreign ministry must approve all exports of weapons from Norway. “Our job is to follow the authorities’ rules,” he said. “Qatar has been cleared by Norway since 2010, and Qatar has had Norwegian industrial connections for many decades, with among others Hydro and Yara.”
Several analysts also think the new Kongsberg deal has great potential and will reduce uncertainty around orders for its remote-controlled weapons systems.