What price the spoils of Norway's oil fairy tale?

Norway's oil wealth has transformed it into one of the wealthiest countries in the world. Credit: On Assignment

Norwegians call it their Oljeeventyr - the oil Fairy tale - the geological jackpot that's brought their country untold riches, and transformed it from a fish canning, agrarian backwater into one of the most prosperous nations on earth

But there's a conundrum at the heart of the narrative: the massive oil profits have been ploughed into a vast sovereign wealth, ensuring generous welfare and pensions.

And yet, its people are passionately green, they use comparatively little of their own black stuff, relying instead on alternative sources of power.

Norway is one of the biggest importers of electric cars - the government gives huge subsidies to those who buy green vehicles. And much of its grid is powered by hydro-electricity.

Some critics liken Norway to a drug dealer - too canny to touch its own stash, but profiting from the petro-addiction of the rest of the world. A crude analogy perhaps, but you get the idea.

I went to Norway's oil capital, Stavanger, to meet the architect of its success; Iraqi born Farouk al-Kasim.

He arrived in 1968, just as they struck liquid gold for the first time - and has steered the country through the challenges presented by what he calls "the tsunami of money" that descended once drilling began.

It sounds an enviable problem - but the downsides are vast, house prices have rocketed way beyond the pockets of ordinary Norwegians, and it's almost impossible to divert workers from the high paying petroleum industry.

The country struggles to find teachers and civil servants. Some blame the generous welfare system for record sickness and absenteeism.

Norway's rigs have an exemplary safety record; their oilfields yields almost double that of the UK.

But an unavoidable and unsettling certainty remains: One day the oil will run out. In the meantime exploration's encroaching further and further into Norway's pristine coast and waters.

Oil's now been found in the breathtakingly unspoilt Lofoten nature reserve in the far north.

It's causing real concern among Norwegians, who are being forced to ask themselves - not for the first time - what price the spoils of the oil fairy tale?