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The Norwegian government has suffered a major setback in its bid to expand the country’s oil and gas production after the country’s Supreme Court ruled that three permits issued by the government to develop new offshore oil and gas fields are invalid because their environmental impact was not sufficiently assessed.
Last year, Greenpeace Nordic and Natur og Ungdom filed a lawsuit with the Oslo District Court, seeking a temporary injunction for the three projects—Equinor ASA’s (NYSE:EQNR) Breidablikk and Aker BP’s (OTCQX:AKRBF) Yggdrasil and Tyrving in the North Sea–citing a failure by the companies and the Norwegian government to consider the full impact of the future use of all the extracted fossil fuels on the global climate. The two fields hold combined reserves of some 875 million barrels of oil equivalent.
"The court's conclusion is that the decisions on the plan for the development and operation of petroleum deposits for Breidablikk, Yggdrasil and Tyrving are invalid," said the ruling by Judge Lena Skjold Rafoss.
"An impact assessment ensures that dissenting voices are heard and considered, and that the decision-making basis is verifiable and available to the public," it added.
According to the court, future emissions should have been assessed as part of the approval process, in-line with its decision in the famous Norwegian Arctic Oil case of 2020.
The Norwegian government won the case against environmental groups that wanted the courts to block the government from issuing licenses to oil and gas companies to explore the south and southeast areas of the Barents Sea for petroleum.
The latest ruling, however, makes it clear that the verdict applies to these three recently approved fields only "and not to other activity on the Norwegian continental shelf". Still, it could set a precedent for new fields.
"This is a full and complete victory for the climate over Norway," Greenpeace Norway head Frode Pleym told Reuters.
By Alex Kimani for Oilprice.com
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Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com.