Addressing Arctic energy plans, IEA Executive Director Maria van der Hoeven said Norway has the experience to lead developments offshore, but tapping into frontier territory in Arctic waters carries heavy risks.
Norway has started a new licensing round for energy companies looking to tap into the Norwegian waters of the North, Norwegian and Barents seas.
The IEA Executive Director spoke to delegates at the Barents Sea Conference in Hammerfest.
The Arctic waters of the Barents Sea hold significant oil and gas reserves. While Norway has one of the most advanced offshore drilling programmes in the world, van der Hoeven warned that there is a wide range of ecological to economic risks.
“And overarching all of these challenges is the fundamental question of whether or not such resources need to be exploited at all, given the global energy transition that is seeing a call for reduction in the use of fossil fuels and a move to low-carbon economy,” she said.
The Norwegian government drew record interest to offshore territory when it handed out 54 licenses for operations in the North, Norwegian and Barents seas during the latest auction in January. Norwegian Energy Minister Tord Lien said on April 21newly available territory means new potential for the country.
“This is good resource management, and will be important for the activity-level and the value-creation, especially in the northern region,” he said.
Earlier in April, the ONS Foundation in Norway canceled an event scheduled for August because of low oil prices anda lack of exhibitors. For van der Hoeven, this was evidence of the complex series of risks present in Arctic exploration.
“The resulting lower gas and oil prices are making investment in the infrastructure necessary to bring Arctic production to market much more difficult,” she said. “This is a very different situation than it was just one year ago, and we must be realistic – projects currently at the planning stage may find themselves stalled.”
Meanwhile, Moscow has also stressed the importance of increased Russian presence in the Arctic. Russia already has been increasing its military presence in the Arctic andsabre-rattling between Russia and NATO has been going on for months.
Russia initiated an historic agreement with Norway just four years ago thatdefined territorial rights in the Arctic.
http://www.neurope.eu/article/low-oil-prices-chill-exploration-off-norway/