Publisher Summary This chapter outlines the history of Norwegian oil industry. Three important principles governed the decisions made in connection with the sovereignty declaration and the procedures applied in the first licensing round for exploration in 1965. First, Norway exercised sovereignty over its continental shelf with the state as the property holder. Second, licenses were to be awarded for restricted geographical areas and limited in time. Third, license holders were to be chosen according to a concessionary procedure, based on the financial strength and practical experience of the applicants. The licensees were obliged to explore and the license required that part of the acreage where petroleum had not been documented and must be returned to the property holder within a certain period of time. This encouraged exploration. These principles constitute the cornerstones in the institutional framework that regulate petroleum activities on the Norwegian Continental Shelf.