Oil & Gas News

Norway faces backlash from campaigners for ‘reckless’ pursuit of Arctic oil and gas

The Norwegian government is calling on energy giants to ramp up oil and gas exploration projects in remote regions like the Arctic Barents Sea, defying a sense of palpable frustration among climate campaigners as the Nordic country seeks to shore up its position as Europe’s largest gas supplier.

NORWAY- JULY 19: A view of fiords as they melt due to climate change near Svalbard Islands, in the Arctic Ocean in Norway on July 19, 2022. Turkish scientists shed light on the unknown future of the world by monitoring global climate change, following the sea ice and glaciers that provide the world's heat balance and decreasing every year within the scope of the 2nd National Arctic Scientific Research Expedition. Approximately 1.5 million square kilometers of sea ice has melted in the arctic region, which i

A view of fjords as they melt due to climate change near Svalbard Islands, in the Arctic Ocean in Norway on July 19, 2022. Anadolu Agency | Anadolu Agency | Getty Images

The rethink in strategy comes as Norway strives to keep up with the growing demand for its energy exports in the wake of Russia’s full-scale invasion of Ukraine.

Norway last year overtook Russia as Europe’s biggest natural gas supplier and says it is now seeking to maintain Europe’s energy security by exploring the Barents Sea for further resources.

Speaking in the town of Hammerfest late last month, Norway’s Petroleum and Energy Minister Terje Aasland reportedly said that the industry should “leave no stone unturned” in their pursuit for fresh hydrocarbon discoveries in the Barents Sea.

Aasland even described this policy as the oil and gas industry’s “social responsibility,” according to Bloomberg, saying undiscovered resources could help to maintain the country’s future production levels.

Norway oil and gas giant Equinor and Vår Energi, one of the country’s largest exploration and production companies, confirmed to CNBC that the minister recently issued this call.

A spokesperson for Norway’s petroleum and energy ministry, meanwhile, said that the message to energy giants was “to explore all economic oil and gas resources within the available areas, including in the Barents Sea.”

Norway has pumped oil and gas from its continental shelf, a relatively shallow section of seabed off its coast, for more than 50 years and it currently has several oil and gas fields either in production or under development.

oil pumps, oil and gas minerals adIt is estimated that roughly two-thirds of the country’s undiscovered oil resources lie off the country’s northern coast in the Arctic’s Barents Sea. And yet, the desire among energy companies to explore the Barents Sea for oil and gas has been relatively subdued in recent years, in part due to high costs and limited opportunities to export gas to markets.

At the start of the year, however, Norway said it planned to offer energy firms a record number of oil and gas exploration blocks in the Arctic.

Environmental campaigners at Friends of the Earth Norway, WWF-Norway and Greenpeace Norway have described the country’s lobbying for continued oil and gas expansion as “embarrassing,” “extremely reckless” and “a middle finger to the Paris Agreement.”

“Oil drilling in the Arctic is like pouring gasoline on a fire,” Frode Pleym, head of Greenpeace Norway, told CNBC via email.

“Both Norway and the oil corporations need to stop cynically exploiting Russia’s war in Ukraine,” Pleym said. “The aggressive and greedy oil policy of Norway does not only consolidate Oslo’s position as a top energy supplier to Europe, it locks a whole continent into future dependency on fossil fuels. The alternative to oil and gas is not more oil and gas, it is more energy efficiency and renewable energy.”

The burning of fossil fuels, such as coal, oil, and gas, is the chief driver of the climate crisis.

We want to explore more

Norway has been one of the world’s top crude producers for the past half-century thanks to its gigantic North Sea petroleum deposits — the spoils of which have been used to provide a robust safety net for current and future generations.

Oil and gas companies believe the Barents Sea can play an important role in ensuring the long-term market access for gas, noting the development of the resources in this area should fit within the EU’s Arctic policy.

A spokesperson for Equinor told CNBC that the company hoped to see “new attractive acreage in the Barents Sea.” They added, “we want to explore for more and we think we will find more.”

Responding to the environmental concerns of Arctic oil and gas drilling, a spokesperson at Equinor said, “We have a long track record of offshore operations in harsh environments with high standards on safety, security, and sustainability.”

“We know the Barents region well and work together with the authorities to plan and execute our operations in a sustainable way with as little as possible impact on the environment.”

A LNG ship is pictured at the island Melkoya where Norwegian energy giant Equinor has built a facility for receiving and processing natural gas from the Snøhvit field in the Barents Sea.

A LNG ship is pictured at the island Melkoya where Norwegian energy giant Equinor has built a facility for receiving and processing natural gas from the Snøhvit field in the Barents Sea. Fredrik Varfjell | Afp | Getty Images

The Norwegian Petroleum Directorate, the government agency responsible for the regulation of petroleum resources, recently lamented the lack of exploration in the Barents Sea, saying its calculations show that such activity “is profitable in all ocean areas.”

Separately, a mid-April study from gas infrastructure operator Gassco said building a pipeline to transport gas produced in the Arctic Barents Sea could be worth re-examining due to the country stepping up its gas exports to Europe.

A spokesperson for Vår Energi described the Barents Sea as a strategic hub for oil and gas drilling, one that provides a “manageable, ice-free” part of the Arctic with weather and climate conditions like other parts of the Norwegian Continental Shelf.

It is for this reason, Vår Energi says, that the Barents Sea should not be compared to other Arctic regions characterized by harsher conditions, adding that the company abides by strict environmental regulations.

Climate campaign groups refute this logic, warning that any oil spill in this area would spell disaster to the rich but acutely vulnerable ecosystems and marine life.

A strong basis to lead on climate policy

“Russia’s war against Ukraine does not justify a further push for Arctic oil and gas, as it can take around 15 years to go from exploration to production,” Truls Gulowsen, leader of Friends of the Earth Norway, told CNBC.

“Norway is making a huge profit off energy prices in Europe and few countries have such a strong basis to lead on climate policy,” Gulowsen said.

Ragnhild Waagaard, climate, and energy lead in WWF-Norway said it is understandable governments want to address the energy crisis and high energy costs causing real hardship for many people but warned that doubling down on fossil fuels will not help.

“Countries should rapidly boost their uptake of renewable energy, increase energy efficiency and reduce demand for energy. The choices we make now, and the way governments respond to the evolving energy crisis, will determine whether we succeed or fail,” Waagaard said.

Get the Weekly Newsletter Thousands of Mineral Rights Owners and Investors Rely On.
To Top
Lease or Sell Your Minerals Rights in Oklahoma or Texas ➡️(405) 492-6277

Have your oil & gas questions answered by industry experts.