NORWAY: December 14, 2007


OSLO - Favourable winds were set to keep an oil slick 10 km long and 5 km wide from reaching the Norwegian shore although rough seas hampered a clean-up operation, energy group StatoilHydro said on Thursday.


The accident has stirred debate about the risks of opening up new areas of Norwegian waters for oil and gas exploration, especially in the Arctic, where spills would have bigger impact.

Norway's second biggest ever spill of some 25,000 barrels of oil occurred on Wednesday during loading onto a tanker at StatoilHydro's Statfjord field. The spillage is about a tenth of the 1989 Exxon Valdez tanker disaster off Alaska.

"We are treating the Statfjord spill with the greatest concern," StatoilHydro Chief Executive Helge Lund said in a statement. "Our first priority is to do everything we can to minimise the environmental impact."

Lund said StatoilHydro has initiated an internal inquiry to find the cause of the incident.

StatoilHydro said observations from aircraft showed that the oil slick was "thin". The energy company said its calculations suggested the slick would dissolve at sea.

"Under the prevailing weather conditions...the likelihood of the slick reaching the coast is now considerably reduced," StatoilHydro said in a statement.

It was some 200 km (124 miles) from shore and moving north-east, roughly parallel to the coastline. Overnight, wind and currents have pushed the slick to the nearby Snorre field.

StatoilHydro said the incident would not impact its oil production or export levels.


ARCTIC RISK?

Environmentalists said the spill was a warning against exploration in the far north Norwegian and Barents Seas, where frigid waters and harsh Arctic conditions would make any spill harder to naturally dissolve or to clean up.

"This should be the final nail in the coffin of exploration in the north," Guro Haugen, head of climate and energy at environmental group Bellona, told the daily Dagsavisen.

Maren Esmark, an official at the World Wide Fund for Nature in Norway, said exploration areas should be pushed further away from coastlines to prevent similar accidents affecting shores. "This spring there will be a licence round for the North Sea where some blocks may be too close to the coast," she told Reuters, adding that drilling should be banned within 70 or 100 km from the coast, up from the present 50 km zone in the Arctic.

Norway is considering opening up wide swathes of its Arctic waters for oil activity after 2009. Exploration in such places is key for Norway to sustain its oil production boom as output from mature North Sea fields declines, according to the oil industry lobby which has pushed for more acreage.

Weather permitting, StatoilHydro wants to implement mechanical clean-up measures and has four vessels near the slick with oil containment equipment.

The weather has remained unchanged, with near gale conditions and waves of between four and five metres. The group said conditions may improve by early Friday morning.

"A weather window lasting between 24 and 36 hours is forecast, enabling the possible use of booms (to recover oil)," StatoilHydro said, adding that a final decision will be made later on Thursday.

Shares in StatoilHydro were down 0.7 percent to 164.3 crowns at 1524 GMT, outperforming a 1.1 percent drop in the DJ Stoxx Oil and Gas index. (Editing by Anthony Barker)


Story by Wojciech Moskwa


REUTERS NEWS SERVICE