ByCarola Hoyos in London, ft.com
Published: June 8 2010 15:09 | Last updated: June 8 2010 15:09
Norway will not allow any deepwater oil and gas drilling in new areas until the investigation into the explosion and spill in the US Gulf of Mexico is complete, Terje Riis-Johansen, the Nordic country’s energy minister, has said.
“We are now working on the 21st licensing round. It will be conducted in light of what we have experienced in the Gulf of Mexico,” Mr Riis-Johansen said in a statement.
“It is not appropriate for me to allow drilling in any new licences in deepwater areas until we have good knowledge of what has happened with the Deepwater Horizon [the Gulf rig that exploded on April 20] and what this means for our regulations,” he added.
It is the first such decision outside the US, which put in place a seven-month moratorium on deepwater drilling in the wake of the Deepwater Horizon explosion, which killed 11 people and has caused the biggest ever oil spill in US coastal waters.
Norway’s oil industry is eager for access to the estimated 1.3bn barrels of oil beneath the Lofoten islands of northern Norway to offset declining output from mature North Sea fields. Norwegian oil production has fallen by 50 per cent from its peak a decade ago.
But the government of Jens Stoltenberg, prime minister, is deeply divided over whether to open Lofoten, with pro-oil elements of his Labour party pitted against environmental opposition from others in the centre-left coalition. The Gulf of Mexico spill has bolstered the argument of those who want to protect Lofoten and its important cod spawning grounds from drilling.
The UK’s department of energy on Tuesday announced it would increase inspections and consider tightening other regulation in light of the US spill.
The moratorium in the US will cut production in the country’s most important region for new oil by 100,000-300,000 barrels a day, the International Energy Agency said on Tuesday.
In a report to be published this week, the rich countries’ energy watchdog will reveal that were the moratorium to last one year, oil output in 2015 would be cut by 100,000 barrels a day. If the moratorium continued for two years, that loss would rise to 300,000 barrels a day, slashing 2015 production from the Gulf of Mexico by about 20-25 per cent.
Additional reporting by Andrew Ward in Stockholm
Special thanks to Richard Charter