Norway Opens Arctic Lease Sale

Bear Island
Birds on Bear Island.

By The Maritime Executive 2017-06-21 19:25:50

Norway's Ministry of Petroleum and Energy has announced its 24th offshore licensing round consisting of 102 blocks, nine in the Norwegian Sea and 93 in the Barents Sea. 

The 93 blocks proposed in the Barents Sea exceed the previous record of 72 blocks offered in Norway's 22nd round, and production licenses are expected to be awarded in the first half of 2018.

Minister of Petroleum and Energy, Terje Søviknes, said the licensing round is an important contribution to the value creation on the Norwegian continental shelf. “Profitable petroleum activity is important to maintain our welfare and the further development of our society.”

However, Norwegian environmental organization Nature and Youth says the government has defied all environmental objections. “This is madness,” said Ingrid Skjoldvær, Head of Nature and Youth. “More oil drilling in the Arctic is incompatible with the goals of the Paris climate goals. Minister Terje Søviknes gives full speed for drilling in pristine areas of the Arctic and doesn’t care at all about the future of us that are young today.”

Nature and Youth argues that some of the blocks are near Bjørnøya (Bear Island), the southernmost island in the Svalbard archipelago. The island is a nature reserve and hosts one of the largest bird-breeding colonies in the northern hemisphere. Norway's Environment Agency had called for the removal of about 20 nearby blocks.

Last year, Nature and Youth together with Greenpeace filed a lawsuit against Norway over Arctic drilling. The court case is set to start on November 14.

Norway is the largest holder of crude oil and natural gas reserves in Europe, and it provides much of the petroleum liquids and natural gas consumed on the continent. Earlier this month, the Norwegian Petroleum Directorate released its 2017 Resource report, stating that since 1990, total resources, including the estimate for undiscovered resources, have increased by more than 40 percent. 

“We have been producing oil and gas in Norway for nearly 50 years, and we are still not halfway done. Vast volumes of oil and gas have been discovered on the Norwegian shelf that are still waiting to be produced. We want companies with the ability and willingness to utilise new knowledge and advanced technology. This will yield profitable production for many decades in the future,” says Ingrid Sølvberg, Director of development and operations in the Norwegian Petroleum Directorate.

“The authorities expect that all resources that contribute to values for society will be produced, not just the ‘easy barrels’. This requires us to maintain strong expert communities and develop and apply new technology,” Sølvberg says.

“The Norwegian shelf has been a laboratory for testing new technology. We now need to become leaders with regard to using the technologies that have been developed. We have a strong offshore technology environment in Norway. Let’s make sure this is also maintained in the future.”