Norway invited firms on Tuesday to drill for oil and gas further inside the Arctic Circle, putting the government at loggerheads with opposition parties as it seeks to open up new fields at a time of declining production.
Launching a new licensing round, Oslo said it would offer 57 blocks in the previously unexplored eastern part of the Barents Sea, which had been free of ice since 2004.
“When the ice has moved, and satellites show it has moved further north, then we have to take care of nature in this area. What we are doing will ensure that,” Prime Minister Erna Solberg told NRK public radio on Tuesday.
The government said it planned to award the blocks in the new zone, where Norway settled a 40-year border dispute with Russia in 2010, in the first half of 2016.
The sector lies 60-70 kilometres (40-45 miles) to the north of areas currently accessible to the oil industry. It is being opened up on the basis of a new 1984-2013 benchmark for the spread of sea ice, which supersedes measurements collated between 1967 and 1989.
The government also awarded 54 blocks in mature areas to 43 companies, with Statoil gaining the right to operate eight, Lundin Petroleum six and Total five.
Oil Minister Tord Lien said that, despite industry cutbacks expected this year, the government would carry on awarding large numbers of new licences.
NOT A DONE DEAL
Norway’s oil directorate said last week its oil industry would shrink this year and might decline faster thereafter unless crude prices recovered.
Statoil Chief Executive Eldar Saetre said current market conditions would not determine whether the firm bid for any of the eastern Barents Sea blocks. “We are not going to apply current oil prices as the basis for long-term decisions,” he told Reuters.
But the government may struggle to win parliamentary approval for that licensing round.
Two small opposition parties – the Liberals and Christian Democrats – which have helped pass legislation since a deal in 2012 including that oil and gas exploration would not take place near ice, said they did not support the northward extension in its current form.
They fear risks of oil spills, which are harder to clear up when mixed into ice.
Norway is one of several oil-producing nations with access to Arctic waters that have gradually moved further north as existing wells have started to run dry.
But it has been more active in the Arctic than most, with its energy firms, led by Statoil, having started drilling there decades ago as its waters, warmed by the Gulf Stream, are relatively ice free.
Arctic ice has shrunk significantly over the same period, in a trend scientists link to climate change.
The Norwegian Polar Institute, which said last year some blocks in the eastern Barents Sea should be off limits, supported the government’s overall evaluation, its head Jan-Gunnar Winther said.
Truls Gulowsen of Greenpeace urged Oslo to take the maximum extent of ice as a guide, but said the debate about staying clear of ice set a good example for other Arctic states.