By Jorn Madslien
Business reporter, BBC News
Statoil and Hydro are world leaders in the offshore oil and gas sector
The proposed merger of the energy components of Norway's two largest companies - Statoil and Norsk Hydro - is set to create the world's leading offshore oil and gas operator.
From the outset, the new company - which has yet to be given a name - will produce 1.9 million barrels of oil per day, and its oil and gas reserves are set to total 6.3 billion barrels of oil equivalents.
Yet it is as an exploration and technology firm the new group will seek to stand out.
Much of tomorrow's oil and gas resources are expected to be discovered offshore, often in hostile environments like the Arctic oceans or at extreme depths off the coasts of Africa and the Americas.
The £15bn stock-swap deal "will give more punch to the international presence of the two", according to DNB Nor Market analyst Bjorn Inge Tonnesen.
At home, the agreement will mark the creation of a single energy group with a market value of some 560bn kroner ($90bn; £46bn) which will be at the forefront of Norway's role as the world's third-largest oil and gas exporter.
"We are creating a global energy company and strengthening Norway's oil and gas industry," says Prime Minister Jens Stoltenberg.
"This is the start of a new era. The new company will create huge values for Norway."
Power and wealth
Oil and gas earnings are already vital to the welfare of the Norwegian people, who stand a good chance of enjoying comfortable retirements thanks to the way oil and gas earnings have been injected into an international investment fund, the Government Pension Fund - Global.
Mr Stoltenberg and Mr Putin share high hopes for the oil sector
Since 1996, the fund - formerly known as the Government Petroleum Fund - has grown from 1,312bn kroner to 1,660bn kroner in 2005; equivalent to pensions savings of some 300,000 kroner for every man, woman and child in Norway.
According to Helge Lund, chief executive of Statoil and the man destined to head the new energy group, "the time is right for one strong Norwegian-based energy champion".
His statement reflects a desire that has long been voiced by both industrialists and politicians in Norway: to create a national player with global clout.
This urge became even stronger in October, when Russian energy giant Gazprom made it clear that neither Statoil nor Hydro would be welcome as partners in a mammoth gas project in the Barents Sea.
Indeed, the Statoil-Hydro deal could usefully be seen in light of Moscow's efforts to consolidate ownership of Russia's oil and gas resources under the umbrellas of state-controlled energy giants Gazprom and Rosneft.
At the time of Gazprom's decision to go it alone on the Shtokman gas field, Stephen O'Sullivan, head of research at Deutsche Bank in Russia, said there was "a general perception that increasingly politics are driving these big energy deals".
Meanwhile, Peter Westin, chief economist, MDM Bank in Moscow, said Gazprom's decision would mean "key assets in the oil and gas sectors will be kept Russian".
Given the Norwegian state's aim to raise its stake in the Statoil-Hydro operation from 62% to 67%, similar terminology could be used to describe this merger, which is destined to both further wealth creation in Norway and help build this small nation's muscle on the global stage.
The deal - which Mr Stoltenberg describes as "industrially and strategically well founded" - thus raises questions about the close links between Norway's oil and gas industry - the nation's largest sector - and its government.
It seems clear that although the industrial logic behind the Statoil-Hydro deal is praised by industry analysts, its significance as a geopolitical lever for the Norwegian government should not be underplayed.
In an interview with the BBC, Energy Minister Odd Roger Enoksen acknowledged that he and other government ministers routinely accompanied the oil industry in its efforts to expand abroad, whether they were supply firms or large operators like Statoil and Hydro.
He also acknowledged that Statoil and Hydro's rival positions in overseas markets in the past have at times been detrimental to what in future will be a shared goal that is likely to be in line with broader Norwegian interests.
However, he was also eager to stress that, despite its large shareholding, the government had no influence on Statoil and Hydro's plans to join forces.
And he stressed that Norway had opened up dramatically in recent years for foreign oil and gas companies.
Both Statoil and Hydro are listed companies governed in accordance with commercial principles, Mr Enoksen pointed out, stating that "this is not about resource nationalism".