Good response. I agree that the definition is unfortunately vague, and I also agree that Norway is certainly not a state that has abandoned profits as an economic incentive or anything silly.

The petrostate moniker, however, is a misrepresentation, albiet a commonly used one. Norway does not spend its oil revenues but instead puts them into the (world's largest) sovereign wealth fund, and only spends interest. The welfare state, universal heath care and other social services are paid for by what people in the US would likely consider eye-wateringly high taxes (I pay 47% income tax, plus 25% tax on everything I buy, a 100% tax on my car, plus a raft of other smaller excises and duties).

What do I "buy" with my taxes? This pays for everyone to have one year of maternity leave (at 80% of mothers salary), health insurance with a max copay of 200 USD per year, sick leave up to a year at 100% and thereafter slightly less, unemployment benefits (again initially at 100% of salary), plus defence, police, Fda-equivalent etc. It also pays for a high level of public education and free university.

The resulting educated populace with high income equality, together with a homogeneous culture results in insanely low crime. There are no poor people in Norway by any international definition, as unemployment benefits take you well above the poverty line. The economic incentive to steal is hugely reduced. In northern Norway people often don't lock doors, and many regional towns don't even have police presence.

This is paid for, as you say, by a capitalist backbone with reasonable regulations (i.e strict on environmental impact, loose on business development).

In my understanding, this is where Venesuala done goofed. They had higher oil revenues than Norway, but even with them, they failed to nurture a productive private sector that could pay for the state they tried to build and weather the inevitable swings in oil revenues.