‘Spies target the oil and energy sector’

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UPDATED: The abrupt resignation on Friday of the central bank boss responsible for Norway’s huge Oil Fund, because he’d lost his security clearance, came just a day after Norwegian intelligence experts warned of increased spying on the country’s oil and energy sector. Among those believed to be behind the alleged spying: China and Russia.

Norway’s huge offshore oil field Johan Sverdrup illustrates the country’s large petroleum sector, its related technology innovations and sheer value. That’s all viewed as targets of foreign espionage in a new PST report that specifically identifies China and Russia as posing the biggest threats. PHOTO: Equinor

Jon Nicolaisen, who had just been reappointed by the government’s Finance Ministry as deputy governor of Norges Bank, stated himself that his security clearance had not been renewed because “my  wife is a Chinese citizen and resides in China, where I support her financially.”

He added in a press release issued just before the weekend that the Norwegian Civil Security Clearance Authority found “no circumstances regarding me personally that give rise to doubt about my suitability for obtaining a security clearance, but that does not carry sufficient weight. I have now had to take the consequences of this.”

That suggests Nicolaisen’s Chinese wife has cost him his job as deputy governor, even though he’s still officially employed by Norges Bank itself. Central bank spokesman Bård Ove Molberg told newsinenglish.no on Monday that Nicolaisen had been on leave from his previous posts at the central bank after being “recruited” by the Finance Ministry to serve as deputy governor in 2014. Nicolaisen “had the relevant security clearance when he first took office as deputy governor in 2015,” Molberg wrote in an email. “When the security clearance had to be renewed, an application was sent to the Norwegian Civil Security Clearance Authority, established in 2018.”

That authority, which now handles security clearance and is referred to as SKM (Sivil Klareringsmyndighet in Norwegian), won’t comment in detail on individual cases. It has denied that clearance rules in general have been tightened, but won’t say why Nicolaisen’s security clearance was revoked or confirm Nicolaisen’s explanation that his Chinese wife was the reason he’d lost his clearance.

Jon Nicolaisen, deputy governor of Norway’s central bank in charge of monitoring Norway’s Oil Fund, abuptly resigned after being told his security clearance would not be renewed. PHOTO: Norges Bank

News service E24 reported that they’d married in 2010, four years after he’d been living in Beijing himself with a personal connection to Norway’s embassy there, and four years before he was first appointed deputy governor of Norges Bank in 2014. Nicolaisen was in charge of monetary policy during his first six years as deputy governor. When he was reappointed at age 60 for a second term from April 1, he was put in charge of monitoring Norges Bank Investment Management (NBIM), the unit of the central bank responsible for the Oil Fund that’s now led by Nicolai Tangen.

Norwegian security authorities didn’t seem to mind, while Nicolaisen was responsible for monetary policy, that his wife was from China. Norges Bank told E24 that a security clearance renewal process for Nicolaisen began in late 2019. That process had not been completed when he was reappointed as deputy governor for the new term, meant to run through December 2026, and took on responsibility for the Oil Fund.

Norges Bank has confirmed to Norwegian media that Nicolaisen had been without security clearance since his April 1st reappointment, and also without access to classified information. “Without authorization, you’re automatically blocked access to systems containing classified information,” Molberg told newspaper Dagens Næringsliv (DN).

That didn’t seem to be a problem, with Molberg telling DN that security clearance “is seldom necessary in the deputy governor’s daily work.” It is, however, during any crisis or preparedness exercises. Nicolaisen resigned his top post last week when it became clear that his security clearance would not be renewed. Since the Finance Ministry is responsible for the central bank itself, it was the ministry that officially accepted the deputy governor’s resignation.

Nicolaisen’s surprise and sudden departure was met with regrets by Norges Bank Governor Øystein Olsen, who stated in a press release Friday that he “will miss Jon Nicolaisen in his post as deputy governor, where he performed his duties superbly as a close colleague and competent professional. In his key positions at the bank, he has over the years made an essential contribution to the development of Norges Bank.”

Both Olsen and Nicolaisen, meanwhile, have also both been in Corona quarantine recently after Tangen tested positive. They’d faced some criticism for having apparently had meetings instead of working strictly from home offices. Molberg told newsinenglish.no that “no decision has yet been made” about Nicolaisen’s future employment in Norges Bank. His duties as deputy governor “will be transferred to other people in Norges Bank” and daily operations “will not be affected by these past events,” according to Molberg.

Espionage threat in the oil sector
The announcement of Nicolaisen’s resignation on Friday, meanwhile, followed a report in DN on Thursday about a new security evaluation by Norway’s police intelligence agency PST. It was sent to the Justice Ministry on November 5, and is  aimed at raising consciousness about the threat of espionage in the oil and energy business in Norway.

The report, entitled “The intelligence threat against the Norwegian petroleum sector,” specifically identified China and Russia as being among countries believed to be targeting both public and private companies, the technology milieu at universities and research institutions and Norwegian authorities. Both Norwegian research agency Sintef and the Trondheim-based Norwegian University of Science and Technology (NTNU) were cited as examples of espionage targets.

DN reported that PST is especially concerned that attempts can be made by foreign intelligence agencies to recruit people working within the sector or having contacts within oil and gas policy. The goal, according to PST, is to secure information about Norway’s petroleum infrastructure including oil and gas pipelines, offshore installations and refineries, personnel and routines. Intelligence gathered could later be used, writes PST, for sabotage operations that could disrupt oil and gas deliveries, or stir up a lack of confidence in the Norwegian oil industry’s security and reliability. It noted that in addition to the petroleum sector, alternative energy projects will also likely become targets of more spying in the future.

‘Primitive propaganda’
The Chinese Embassy in Oslo didn’t respond to DN‘s requests for comment on PST’s report, but the Russian Embassy claimed that PST was “looking for enemies where they’re not found.” The embassy wrote in a response to DN that there was “nothing new” in the report from PST about alleged Russian threats, dismissing it as “general speculation.” It accused PST of  having “operated with primitive propaganda for several years” to “frighten the Norwegian people.”

Russia’s representatives in Oslo went on to suggest that “instead of demonizing Russia,” Norway’s intelligence and security officials should instead cooperate with “competent” Russian authorities to ensure “real security” for Norwegian citizens, for example within cyber security. That, the embassy argued, would also “improve the atmosphere within the bilateral forhold.” Russia is regularly proposing more cooperation to both PST and Norway’s Foreign Ministry, according to the embassy, adding that it “is up to the Norwegian side to respond.”

Asked why China and Russia were singled out in PST’s recent report on the oil sector, PST spokesman Martin Berntsen replied merely to DN that “we have mentioned Russia and China on repeated occasions,” as have other European countries. Asked whether PST had any evidence that Russia was behind any spying on the Norwegian petroleum sector, Berntsen replied that “we have repeatedly described that the country actively engages in intelligence directed at Norwegian interests. I don’t want to comment on (the Russian Embassy’s statements) any more than that.”

NewsInEnglish.no/Nina Berglund