Norway Arctic oil rush abates after exploration letdown

Bloomberg

Oil exploration in Norway’s Arctic seems to have lost some of its appeal after a disappointing drilling campaign. Only 11 companies applied for exploration licenses in the latest round — the nation’s 24th — which focused heavily on the Barents Sea, the Petroleum and Energy Ministry said in a statement on
its website. That’s down from 26 in the previous offering and the low-est level since at least 2002, according to records available on the
government’s website.
The drop in applicants follows dismal results in the busiest-ever exploration campaign this year in the Barents, which is thought to hold most of Norway’s undiscovered oil and gas. The declining interest is a blow to the Norwegian government, which included a record 93 Barents Sea blocks in an effort to boost activity. Western Europe’s biggest oil and gas producer is betting on Arctic resources to arrest a forecast decline in production from the middle of the next decade.
“The diversity of operators in these areas is very limited,” Anders Holte, an analyst at Danske Bank A/B, said by email. “The results from this year’s exploration by Lundin and Statoil probably didn’t make things better.”
Norwegians are already fiercely debating the future of Arctic drilling, weighing both moral and financial arguments amid efforts to curb climate change. The first oil project in the Barents, Eni SpA’s Goliat, has come under heavy scrutiny for delays, cost overruns and safety incidents. In an unprecedented court case, environmental organizations sued the government over the 23rd licensing round.
The proposal last month by Norway’s sovereign wealth fund, the world’s largest, to get rid of all of its holdings in oil and gas companies only added to the questions about the long-term role of fossil fuels in the Nordic nation.