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Norway Plans Record Number Of Arctic Oil Exploration Blocks


Norway’s government announced initial plans on Monday to open a record number of oil exploration blocks in the Barents Sea, sparking renewed criticism from environmental groups.

Norway’s Ministry of Petroleum and Energy is proposing 102 blocks in the 24th licensing round, of which nine blocks are in the Norwegian Sea, and a record-high 93 blocks – in the Barents Sea. A considerable number of the blocks proposed in the Barents Sea are located north of the northernmost oil discovery in Norway.

Norway will announce the final blocks in the second quarter after a public consultation with local communities, environmental groups and regulators.

Norway – in contrast to other oil-rich countries – does not sell licenses, but rather awards them to the best applicant and reimburses 78 percent of drilling costs, Reuters recalls.

According to the Norwegian Petroleum Directorate, the Barents Sea holds half of the undiscovered resources in the Norwegian Continental Shelf.

Local environmental group Bellona has described the plans for nominating so many blocks as “total madness”, Reuters reports.

“It’s as if the environment isn’t an issue for the government. This is on a collision course with the Paris Agreement [on climate change], the EU parliament and all Norwegian environmental management,” according to Bellona head Frederic Hauge, as quoted by Reuters.

In addition, the environmental group warns that Arctic drilling may cost Norway’s government billions of kroner if drillers do not strike oil.

Related: Why Is Big Oil Backing The Paris Climate Agreement?

The plans for nominating so many Arctic exploration blocks come as Greenpeace is suing Norway over the previous, 23rd, licensing round, for oil companies to drill in the Arctic Barents Sea. The plaintiffs -- Nature and Youth and Greenpeace Nordic -- argue “that Norway thereby violates the Paris Agreement and the people’s constitutional right to a healthy and safe environment for future generations”.

The latest Arctic push by the Norwegian government also comes at a time in which the relatively stable and higher oil prices encouraged Statoil and Lundin to allocate more funds to Arctic drilling, especially since the price rise has been accompanied by a major discovery for Lundin and a likely future major discovery for Statoil.

By Tsvetana Paraskova for Oilprice.com

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