Norway makes compromise on heated Arctic oil exploration issue

Dec 15, 2003 01:00 AM

Norway's oil minister offered a compromise in a heated debate about Arctic oil exploration that will protect the ecologically important Lofoten islands, but reopened the prospect of drilling farther north in the Barents Sea. A moratorium on oil drilling in the area has been in place since 2001, pending environmental impact studies, but the industry is pushing for exploration rights as supplies elsewhere dwindle. Oil Minister Einar Steensnaes said the Lofoten ban may be reviewed after a management plan for Arctic oil activity is completed, likely in 2006, or new technology makes operations safer.
"This is now a petroleum free area, for all practical purposes, until there are new considerations," he said.

Outside the building, a few dozen protesters gathered, holding banners and chanting against any oil development in the Arctic. Oil companies want new areas to explore because Norway, the world's third-largest oil exporter, either has to find more oil or watch as production from existing fields starts to decline, costing billions of kroner in lost income and jobs.
Oil companies have already drilled 61 exploration wells in the Arctic Barents Sea over the years, with only one important find, the Snoehvit natural gas field currently being developed, Steensnaes said. He said the decision to permit year-round drilling in the Barents means that companies with existing exploration licenses can resume work.
"The government has decided to allow for further all-year petroleum activity in the Barents Sea south, except for certain especially valuable areas," he said.

Any development would be under strict conditions, including zero emission of pollutants into the water. Environmental groups say the Lofotens and Barents, are so rich in fish and have such a delicate, cold weather ecology that they must be totally protected.
Samantha Smith, director of the World Wildlife Fund's Arctic Program, called the decision gratifying and lacking. She said it protects Lofoten as a biologically diverse and important cultural areas because "for the time, some things are more valuable than revenue from oil and gas." However, she said the decision on Barents drilling should have waited for the new management plan.

The Norwegian Oil Industry Association also expressed mixed feelings, saying it was a disappointment that the area off the Lofotens was not opened for drilling.
"The continental shelf off northern Norway is believed to contain a large share of the oil and natural gas resources that are so far not discovered," said the association's managing director Finn Roar Aamodt. "It is important to map new resources, and we are satisfied that the authorities are preparing to allow companies to resume drilling in the Barents Sea next year."

Source: AP WorldStream via Comtex
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