Norway to open Arctic Waters for oil and gas exploration

Norway to open Arctic Waters for oil and gas exploration

The government of Norway has opened a completely new area of Arctic waters for the development of oil and gas.

Officials awarded the first new oil and gas licences in more than two decades, aiming to precipitate long-term drilling activity as low oil prices push producers to cut exploration expenses.

“Today we are opening a new chapter in the history of the Norwegian petroleum industry,” said Tord Lien, Norway’s minister of petroleum and energy. “The industry’s interest in new acreage shows that the Norwegian continental shelf (NCS) remains attractive. The potential is huge.”

As the region’s largest oil producer, it has offered 10 drilling licences to 13 firms including Norway’s Statoil SA (STO:STLO) and US majors ConocoPhillips (NYSE:COP) and Chevron (NYSE:CVX). The new licences are comprised of three sections of the southeast section of the Arctic Barents Sea, a space previously disputed with Russia.

Norwegian officials explained they hope new activity in the Arctic waters will secure stable offshore drilling. The expansion could also help offset falling production from maturing North Sea fields.

Norway’s oil output has been cut in half since 2000, resulting in lower government profit. According to Statistics Norway, the country’s oil workforce dropped by 11 per cent or 25,000 jobs between 2013 and 2015 as a result of the market’s downturn.