EU, Norway Eye Arctic Oil, Gas Deposits

August 31, 2006

EU and Norway’s energy officials met in Brussels on August 30 to examine ways of strengthening a bilateral energy dialogue launched in 2002. Short-term issues include increasing Liquefied Natural Gas (LNG) deliveries to Europe as well as the planned opening in October 2006 of the "Britpipe" linking Sleipner in Norway to Easington, UK. By 2015-2020, natural gas deliveries from Norway are expected to grow from 85 billion cubic meters to 120 bcm, EU officials said. However, talks on longer-term exploitation of the expected huge oil and gas reserves in the Arctic will probably attract most attention. The region is believed to hold 25 percent of the earth's hydrocarbons, according to the US Geological Survey. And as international demand for fossil fuels continues to rise, the High North is attracting growing interest from big oil and gas companies. But a territorial row between Norway and Russia in the so-called "disputed zone" of the Barents Sea has so far prevented further exploration, let alone commercial exploitation of these resources. According to euractiv.com, natural gas deposits in the Arctic, such as the Shtokman and Snøvit gas fields could provide as much as 50 bcm of gas per year, covering 7-9 percent of the EU's entire gas consumption by 2020. Other problems include the high costs of deep offshore drilling and environmental concerns such as the oil and gas industry's coexistence with fisheries. The 2005 EU-Norway energy dialogue confirmed interest from both sides to strengthen cooperation on energy efficiency, renewables, and security of energy supply, including exploration and production activities in the Arctic area. (Source: www.euractiv.com)

EU, Norway Eye Arctic Oil, Gas Deposits

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