Norway may turn its back on offshore oil exploration

Norway may turn its back on offshore oil exploration

Western Europe’s biggest oil producer is, seemingly, falling out of love with oil.

To the dismay of the nation’s powerful oil industry and its worker unions, Norway’s opposition Labour Party has decided to withdraw its support for oil exploration offshore of the sensitive Lofoten Islands in Norway’s Arctic, creating a solid majority in parliament to keep the area off limits for drilling.

The dramatic shift by Norway’s biggest party is a significant blow to the support the oil industry has enjoyed, and could signal that the Scandinavian nation is coming closer to the end of an era that made it one of the world’s most affluent.

Oil companies led by state-controlled Equinor, the biggest Norwegian producer, have said that gaining access to Lofoten is key if the country wants to maintain production as resources are being depleted.

Estimates suggest that there could be 1bn-to-3bn barrels off the archipelago, which is also considered a natural wonder.

“The whole industry is surprised and disappointed,” said Karl Eirik Schjott-Pedersen, head of the Norwegian Oil and Gas Association. “It doesn’t provide the predictability we depend on.”

Yet, Labour’s decision wasn’t a big surprise. Norwegians are starting to question their biggest export and source of wealth amid growing concerns over climate change. Even some oil executives had already given up on Lofoten, which has been kept off limits for years, thanks to political compromises.

However, the battle will now likely move on to whether drilling should continue in the Barents Sea.

The oil industry also fears that Labour now could be willing — or forced — to compromise on other issues the next time it takes the reins of government, such as petroleum taxes and an attractive exploration refund for companies that aren’t profitable.

Labour leader Jonas Gahr Store said his party will continue to be a supporter of the oil industry and to back the existing tax system.

Yet, Mr Gahr last week also said he wants oil companies in Norway to commit to a deadline for making operations completely emissions free, an ambition the country’s top oil lobbyist called “very demanding”.

Norway’s biggest oil union, Industry Energy, a long-time ally of Labour, lashed out at the party’s new stance on Lofoten, which was adopted less than two years after an internal party compromise on the issue.

“It creates imbalances in the policy discussions for an industry that’s dependent on a long-term perspective and we can’t accept that,” said Frode Alfheim, the union’s leader.

- Bloomberg

More on this topic

Oil at $60 after tumultOil at $60 after tumult

Barryroe drilling 'may be pushed into 2020' due to approval and funding delaysBarryroe drilling 'may be pushed into 2020' due to approval and funding delays

Irish oil firm agrees €14m Egypt purchase and seals BP supply dealIrish oil firm agrees €14m Egypt purchase and seals BP supply deal

Oil price and shares of Big Oil rise as UK-Iran tension simmers over tanker seizures Oil price and shares of Big Oil rise as UK-Iran tension simmers over tanker seizures

More in this Section

Government to consider legal right for workers to switch off outside working hoursGovernment to consider legal right for workers to switch off outside working hours

Trump’s desire to acquire Greenland is not ‘crazy’Trump’s desire to acquire Greenland is not ‘crazy’

Consumer confidence flashes red for TrumpConsumer confidence flashes red for Trump

Apple €13bn tax appeal hearing next monthApple €13bn tax appeal hearing next month


Lifestyle

Incarcerated in Auschwitz and other Nazi death camps Zuzana Ruzickova somehow survived and went on to create the complete recordings of her beloved Bach, writes James Lawless.Book review: Nazi horrors replaced by brutal Soviets for piano player

The Menu was delighted to make recent mention of a new UCC postgraduate diploma in Irish food culture and is equally pleased to announce availability of two new bursaries for same.The Menu: Food news with Joe McNamee

Milky skincare ingredients keep skin fresh and often suit the whole family, it’s moo-vellous, writes Rachel Marie Walsh.Product watch: Milky skincare ingredients for the whole family

George Orwell’s classic novel foretold a lot, but the manner in which we’ve handed over our personal data to faceless corporatocracies is doubleplus-ungood, says Suzanne Harrington.How we sleepwalked into George Orwell’s nightmarish vision

More From The Irish Examiner