Norway plans to expand Arctic oil and gas drilling in new licensing round

By Terje Solsvik

OSLO, March 17 (Reuters) - Norway will offer new licenses to drill for oil and gas in its oceans, including previously unexplored acreage in the Arctic, the government said on Thursday, welcome news to Western nations keen to reduce their dependence on Russia.

"Access to new, attractive exploration acreage is a pillar in the government's policy for further development of the petroleum industry," Minister of Energy and Petroleum Terje Aasland said in a statement.

"New discoveries are crucial for ensuring jobs, value creation and production," he said.

Environmental campaigners strongly oppose to Norway's oil and gas drilling, especially in the Arctic's fragile ecosystem, arguing it contributes to global warming, but a broad majority in parliament said exploration will continue.

The energy ministry said it had added stakes in 31 exploration blocks in the Arctic Barents Sea that oil firms can apply for in the latest round, on top of other acreage in the Barents Sea as well as the North Sea and the Norwegian Sea.

The blocks are adjacent to mature areas that have been drilled in the past and have relatively well-known geology or existing infrastructure, allowing companies to develop new discoveries quickly.

Norway is Europe's second largest petroleum producer after Russia, pumping around 4 million barrels of oil equivalent per day, and is forecast to increase its output by some 9% by 2024.

The pre-defined areas have been expanded gradually over the years and now cover much of the acreage opened for petroleum business off Norway, including large swathes of the Norwegian section of the Barents Sea.

In last year's round Norway awarded stakes in 53 licenses to 28 companies, with Equinor EQNR.OL , Aker BP AKRBP.OL , Lundin Energy LUNE.ST and Eni's ENI.MI Norwegian subsidiary Vaar VAR.OL winning the most.

The energy ministry said it plans to announce awards for this year's round in January 2023.
Reporting by Terje Solsvik; Editing by Gwladys Fouche and Lisa Shumaker

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