Norway Shields Parts of Arctic From Oil Drilling
NORWAY: April 3, 2006


OSLO - The Norwegian government proposed on Friday to keep wide tracts in Norway's Arctic region open to oil exploration, but set aside a 50-km (31 mile) zone along the coast in the interest of the environment and fisheries to 2010.

 


The plan for management of the Arctic areas and natural resources, including oil, gas and fish in the Barents Sea, was a hard-fought political compromise between the ruling Labour party and its junior coalition partners.

"Fish, the environment, oil and gas can be developed in parallel, taking account of different interests," Prime Minister Jens Stoltenberg told a news conference.

Areas closed to oil and gas exploration by the world's number three oil exporter include off the scenic Lofoten islands, a 50-km band along Norway's Arctic coast and the fringes of the polar ice pack.

Stoltenberg said the scheme could be a model for other nations but both the oil industry and environmentalists expressed disappointment.

The government also announced awards of 13 new oil and gas licences in the Norwegian Sea and the Barents Sea to 17 companies in the country's 19th licensing round.

Oil and Energy Minister Odd Roger Enoksen acknowledged that little is known about how much oil and gas may lie in the Barents, which was first opened in 1979.


65 WELLS

"We have little knowledge of what is there," Enoksen said. "We've drilled 65 exploration wells in an area twice the size of the North Sea," Enoksen said.

The Norwegian Petroleum Directorate says that Arctic waters may hold a third of the country's undiscovered oil and gas.

Oil companies resumed exploration in the Norwegian part of the Barents Sea in early 2005, drilling their first wells there since 2001, after the government ended a moratorium.

The plan would allow exemptions within the 50 km zone, stretching to the Russian border, to companies which already have licences in the area. These include Italian energy group Eni which has struck oil at the Goliat field.

The management plan also keeps closed to 2010 the Vesteraalen area and Nordland VI off the scenic Lofoten islands -- home to Norway's richest cod stocks and wild bird populations and whose jagged mountains are a top tourist attraction.

The Socialist Left Party, a junior partner in government, had wanted a halt to all oil and gas activity in the Barents Sea, saying it would threaten the fragile ecosystems.

Socialist Environment Minister Helen Bjoernoy said the plan was a compromise acceptable to all three parties in government.

Samantha Smith, head of the WWF environmental group's Arctic Programme, said Oslo had missed a chance to declare large tracts off limits To the oil industry rather than merely until 2010.

"That may be a long time in politics but it's not long for nature," she told Reuters. "The government says it is in the global forefront with this plan. The WWF disagrees. A groundbreaking plan would have been permanent protection."

The Norwegian Oil Industry Association (OLF) said that the management plan would hinder economic development in the north. And the Fellesforbundet union criticised it for stifling jobs.

In the licencing round, Norway's Statoil got stakes in five licences and three operatorships, and Norwegian Norsk Hydro got two licences, both with operatorships, energy officials said.

Britain's BG Group was awarded the most: five operatorships and participation in eight licences. The other firms getting operatorships were France's Total, Shell and Canadian Talisman.

Six licences were awarded in the Barents Sea and seven in the Norwegian Sea.

 


Story by John Acher and Alister Doyle

 


REUTERS NEWS SERVICE