PRESS RELEASE
22 December 1995
End of cold war spells the end of
Sweden’s secret oil depots

The Swedish government recently announced that it is to sell off what has up until now been a closely guarded state secret; the country’s strategic oil reserves. Stored in vast underground caverns blasted into the bedrock, no fewer than 45 depots have been used to store oil reserves earmarked for use in national emergencies. According to the National Oil Stockpile Agency (NOSA) which will administer the sale, the strategic position of the depots in the rapidly expanding Baltic region means that there should be no lack of prospective international buyers.

With its recent membership of the EU, the fall of the Soviet Union and the follow-on independence of the Baltic States, Sweden’s position in Europe has radically changed over the past few years. As a result, the Swedish government has decided that the time has come to sell what were up until recently top secret oil reserves and their vast underground storage caverns.
The first four storage facilities to be put on the market are considered to be especially interesting for oil companies looking to establish themselves in the rapidly expanding Baltic region. Three of these are situated on the Baltic coastline while the fourth lays on Sweden’s west coast close to the Norwegian boarder. The depots are


currently used to store oil products but, according to NOSA, can be modified to store crude oil.

Gate-way to countries in the east
“Our closeness to Russia and the Baltic countries means that the depots are ideal as storage points for oil transports to
and from the refineries of western Europe and the oil fields of the North Sea. The harbours can handle ships of up to 50,000 tonnes, something which few ports on the other side of the Baltic are capable of”, comments Kjell Nyman, Executive Vice President of NOSA.

Solid bed rock
The oil depots have been blasted into the bed rock at a level below the ground water table. The pressure exerted by the water table and the fact that the oil, with a specific gravity lighter than water, is stored on a layer of water minimizes the risk of seepage and contamination.
“We feel that the strategic position of the depots, their high capacity and low storage and maintenance costs will mean that they will be attractive for prospective buyers. Sweden is also willing to offer foreign investors very attractive terms. The country has a solid infra-structure and a progressive commercial and social climate”, says Kjell Nyman.

Caption:
Sweden is strategically placed between the oil producing countries lining the North Sea and the rapidly expanding markets of Russia and the Baltic countries.

For further information contact:
Kjell Nyman, Executive Vice President
National Oil Stockpile Agency
P.O. Box 16247
S-103 24 Stockholm,Sweden
Tel: +46 8 402 12 70 Fax: +46 8 24 35 75



December 1995


This is the National Oil Stockpile Agency of Sweden (NOSA)

NOSA was created in 1994 to administer the phase-out of stored oil products and 45 underground oil depots in a process planned to be completed by June 30 1999. NOSA will be wound up by December 31 the same year.
In the first phase the following depots are considered to be of prime interest to the international market:


Norrköping
Position: On Sweden’s Baltic coast, to the west of
Estonia.
Capacity: A large subterranean chamber with a capacity
in excess of 100,000 cubic metres.
Infrastructure:Local authority owned deep-water harbour
with a pipeline.


Oskarshamn
Position: On Sweden’s Baltic coast, to the west of
Latvia.
Capacity: Seven separate subterranean chambers with a
collective capacity of approx. 100,000 cubic
metres.
Infrastructure:Local authority owned deep-water harbour
with a pipeline.





Kappelshamn
Position: On the island of Gotland in the middle of
the Baltic.
Capacity: Four separate subterranean chambers with a
collective capacity of approx. 40,000
cubic metres and two tanks above ground of
5,000 cubic metres each.
Infrastructure:Own quayside.



Strömstad
Position: On Sweden’s west coast, close to the
Norwegian boarder.
Capacity: Four separate subterranean chambers with a
collective capacity in excess of 50,000
cubic metres.
Infrastructure:Own quayside as part of a deep-water port.




Business mission:
The sale of Sweden’s strategic oil reserves including storage capacity. Shall generate the highest possible income for the Swedish state while satisfying the country’s high environmental standards.


Number of employees: 91 (July 1995)

Turnover fiscal year 1994/95
according to NOSA annual report:
SEK 563 million in revenue generated by the sale of 648,000 cubic metres of oil.
SEK 7 million generated by the sale of various facilities.

Owner:
The Swedish state.

Council:
Gunnar Norbeck, Chairman
Sven Nyberg
Reiner Olsson
Lars Lindau

Board of Management:
Gunnar Holmgren, President
Kjell Nyman, Executive Vice President
Rune Klingborn, Advisor
Björn Eriksson, Trading Director
Eva Lindenmo, Chief Administrator
Gert Person, Human Resources Manager
Regional Manager on a roster.








December 1995

“No threat of Super Power confrontation”:

Sweden rids itself of strategic
oil reserves and underground depots

Sweden’s dependence on oil has diminished since the 1970’s from a consumption high of 30 million cubic metres annually to less than 20 million cubic metres per year in the 1990’s. The reduction came about following the oil crises of 1973 and 1978 which lead to an increased search for alternative energy sources. Heating oil has, in the main, been replaced by electricity and while the number of petrol driven vehicles has increased, they are more energy efficient and consume less fuel than the old gas guzzlers.

During the 1970’s, oil accounted for around 70 per cent of Sweden’s energy needs. Today, that figure is a little more than 40 per cent. Despite the fact that Sweden doesn’t have its own oil reserves, in recent years the country has become less vulnerable to disruptions to its oil supplies from abroad.
Just a few years before the outbreak of World War 2, Swedish oil suppliers and certain parts of industry were ordered by the government to stockpile oil for use in the event of a national emergency. For 20 years enough oil was



put aside to satisfy the oil requirements of a normal winter.
In 1958, the government introduced new regulations which stipulated that separate oil reserves be kept for use peace time and in war. These should be enough cover a total import blockade during a predetermined number of months.
In 1978, the country’s stored reserves were increased to cover a whole year’s loss of imports.
The oil has mainly been stored in bomb-proof subterranean caverns spread throughout the country. The solid Swedish bedrock is particularly well suited for oil storage on a layer of water in unlined rock chambers situated below the ground water table. The lighter specific gravity of oil in combination with the surrounding water pressure stops the oil from seeping into the bedrock. This internationally acclaimed storage method has been developed by Swedish engineers with construction carried out by Swedish companies.

Shifted power balance
When the iron curtain fell at the beginning of the 1990’s, the former Soviet Union disintegrated changing the balance of power in the Baltic region. As a result, the risk of political and military aggression from eastern Europe has diminished.
This new situation, in combination with the country’s reduced dependence on oil means that the size of Sweden’s strategic oil reserves can now be reduced in a process which was begun in 1992.

Decision to sell
NOSA was formed in 1994 to dispose of Sweden’s collective strategic oil reserves and underground storage facilities on the international market. During 1996 to 1999, the Swedish State will successively phase out its strategic oil reserves. The country’s subterranean storage chambers will be emptied and sold off.


Apart from the 90-day reserves which are earmarked for commercial consumption, the oil companies have been ordered to maintain a limited storage capacity in the event of a national emergency.
Swedish industry has also been ordered to maintain its own emergency oil reserves.


For further information contact:
Kjell Nyman, Executive Vice President
National Oil Stockpile Agency
P.O. Box 16247
S-103 24 Stockholm,
Sweden
Tel: +46 8 402 12 70
Fax: +46 8 24 35 75























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