Compared to other automotive giants, like Ford and GM, Volvo was too small to really compete on the world stage for long. The Swedish car maker needed extreme amounts of capital to sustain their success over the next few decades. The company’s plans to launch a new 700 series, an executive car that would offer a high-end option for the American market, and with profits increasing by 61% in 1978, Volvo looked like a solid growth company. Unfortunately, it lacked the cash to finance the new series. Volvo’s CEO, Håkan Frisinger, looked in a rather surprising direction — across the border into neighboring Norway. At the time, Norway was looking to make a considerable shift in their economy. They presented a deal to Volvo: in exchange for 40% of Volvo’s shares, Norway would give Volvo 10% of the proceeds from the offshore Oseberg oilfield, located in the North Sea. At the time, that would have been the equivalent of $18 million. Volvo said no. Just a few years later, the Oseberg oilfield struck black gold, peaking in output in 1997. That meant was that Volvo would have been $368 million richer had they taken the deal. As of Dec. 31, 2021, the Oseberg oilfield has produced 300 million barrels of oil, generating revenue of $11.9 billion. Nevertheless, Volvo has done well for itself as well, garnering a $54 billion valuation as of April 2024.How Volvo Missed Out On Owning Norway’s Oil
Compared to other automotive giants, like Ford and GM, Volvo was too small to really compete on the world stage for long. The Swedish car maker needed extreme amounts of capital to sustain their success over the next few decades. The company’s plans to launch a new 700 series, an executive car that would offer a high-end option for the American market, and with profits increasing by 61% in 1978, Volvo looked like a solid growth company. Unfortunately, it lacked the cash to finance the new series. Volvo’s CEO, Håkan Frisinger, looked in a rather surprising direction — across the border into neighboring Norway. At the time, Norway was looking to make a considerable shift in their economy. They presented a deal to Volvo: in exchange for 40% of Volvo’s shares, Norway would give Volvo 10% of the proceeds from the offshore Oseberg oilfield, located in the North Sea. At the time, that would have been the equivalent of $18 million. Volvo said no. Just a few years later, the Oseberg oilfield struck black gold, peaking in output in 1997. That meant was that Volvo would have been $368 million richer had they taken the deal. As of Dec. 31, 2021, the Oseberg oilfield has produced 300 million barrels of oil, generating revenue of $11.9 billion. Nevertheless, Volvo has done well for itself as well, garnering a $54 billion valuation as of April 2024.