World's Energy

03-04-2009 - (Reuters) - The Norwegian industry has listed three areas off the scenic Lofoten and Vesteraalen islands as the most interesting oil and gas exploration areas off Norway's Arctic coast in a new report to the government. The oil industry has long hungered for the areas of Nordland VI, Nordland VII and Troms II, and the Norwegian Oil Industry Federation (OLF) and its partners in the KonKraft group said opening them to drilling could contribute significantly to slowing a long-term decline in Norwegian petroleum production. Nordland VII and Troms II have never been open to petroleum activity. Parts of Nordland VI have earlier been explored, but the area is now out of bounds to drilling under a 2006 government management plan for the Barents Sea and Lofoten. The Labour-led government says it will not decide whether to open the areas until 2010, after September 2009 elections. The Socialist Left Party, a junior partner in the government, is bitterly opposed to opening more of the Arctic to drilling. Environmental protection campaigners say the Arctic areas should stay off limits and are vulnerable to oil spills because of rich fish stocks and bird populations. "Forecasts indicate that Norwegian petroleum production will fall markedly over the next decade," OLF chief Per Terje Vold said in a statement with the new report entitled "Oil Activity in the North." Non-OPEC Norway is the world's fourth biggest oil exporter and Western Europe's biggest gas producer. "Access to new and attractive exploration acreage would slow this decline, sustain government revenues to the benefit of the community, keep 250,000 people in work and open opportunities for 1,000-2,000 new jobs," Vold said. KonKraft -- linking the OLF, the Federation of Norwegian Industries, the Norwegian Association of Shipowners and Trade Union Federation LO -- has earlier estimated that Nordland VI, VII and Troms II may contain 3.4 billion barrels of oil equivalent (boe). That would be about five times the size of a field like Norne in the Norwegian Sea. In 2003, the Norwegian Petroleum Directorate (NPD) estimated the areas' resources at around 1.5 billion boe, but in more recent resources reports the NPD has not given estimates for Nordland VI, Nordland VII and Troms II due to uncertainties. "StatoilHydro has in various fora given an estimate for this area of 2 billion barrels of oil equivalents," the new KonKraft report said. The KonKraft group said its resource figure was based on average estimates obtained in interviews "with a number of companies that are assumed to have reasonably good knowledge of the Norwegian shelf." The group said its estimate of the economic spinoff effects of developing the offshore areas, including its job estimates, was based on fields with just over 2 billion boe of resources.