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Norway Paves Way for Big Expansion of Arctic Oil Exploration Amid 'Challenging' Developments

© AFP 2023 / OYVING HAGEN / SCANPIX NORWAY / Statfjord-A offshore oil platform
Statfjord-A offshore oil platform - Sputnik International
Norway is western Europe’s biggest oil producer and has built the world’s biggest sovereign wealth fund worth over $1 trillion on the back of its oil wealth. In the words of Norwegian Energy Minister Tina Bru new discoveries are needed to uphold employment and value creation.

The Norwegian government is paving the way for a major expansion of oil exploration in the Arctic, triggering opposition parties and environmental groups.

Norwegian Energy Minister Tina Bru has announced plans to auction up to 136 new oil exploration blocks in a major licensing round, of which 11 are in the Norwegian Sea and 125 in the Barents Sea. According to her, the expansion is needed to protect jobs and generate wealth, national broadcaster NRK said.

"We need new discoveries to uphold employment and value creation", Bru said in a statement, citing "challenging" developments in recent months. "Regular access to new exploration areas is crucial to maintaining activity on the Norwegian continental shelf", Bru said.

The licensing round had previously been postponed pending a new management plan for the Barents Sea, and a long-running debate about the "ice edge", or how far north the oil industry should be allowed to drill for oil and gas. The management plan and the new edge of ice were finally adopted by the Norwegian parliament earlier in June, following a tug-of-war and a compromise between the majority parties.

However, the Socialist Left, which fought for a stricter definition of the ice edge than the majority of parties, is deeply concerned over the development.

"The climate crisis implies that we must leave much of the already discovered oil and gas behind. Therefore it's insane to start new oil activities in the marine areas that are the source of our food", the party's spokesman Lars Haltbrekken said.

Greenpeace was also critical of the proposal. The environmental organisation argued the government is "blanketing the Barents Sea with new oil licenses" and "doesn't give a damn about climate science".

"This is a great mockery of future generations and the millions of young people who strike for the climate. The world must cut greenhouse gas emissions in ten years. Norway cannot continue to dishing out new oil licenses to the fossil industry", Frode Pleym, the leader of Greenpeace Norway, said.

By contrast, Aker BP CEO Karl Johnny Hersvik was pleased about the new licensing. At the same time, he stressed that hopes for the Barents Sea have been high, yet had largely failed to materialise. Hersvik was none the wiser as to why the yields have been so poor.

Norway is one of the world's leading exporters of energy resources, covering about 2 percent of the global oil demand and 3 percent of the natural gas demand. Nearly all oil and gas produced on the Norwegian shelf is exported. Combined, they amount to about half of the total value of Norwegian exports of goods, being the most important commodities in the Norwegian economy. Norway's extraction of natural resources has allowed it to build the world’s biggest sovereign wealth fund worth over $1 trillion.

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