Russia seeks closer energy ties with Norway

Mon Apr 26, 2010 12:20pm EDT

* Medvedev positive on resolving disputed Barents Sea border

* President pushes for development of Shtokman gas project

* Environmentalists concerned about opening Arctic for oil



(Recasts with quotes, adds colour and details)

By Denis Dyomkin and Wojciech Moskwa

OSLO, April 26 (Reuters) - Russian President Dmitry Medvedev pledged on Monday closer cooperation on energy issues with Norway and to end a decades-old dispute over their Barents Sea border which has prevented access to oil and gas resources.

The Arctic maritime border dispute has meant that Europe's two top energy suppliers have not tapped deposits in an area which is half the size of Germany and tantalisingly located between proven oil and gas deposits off Norway and Russia.

"We count upon further deepening of strategic partnership between Russia and Norway in energy," Medvedev told a business audience in the Norwegian capital.

Earlier, Medvedev told a Norwegian newspaper that it was "absolutely possible" to reach a deal on the Barents Sea border off Europe's northern tip, although both sides have played down the prospects for an accord during this trip. [ID:nLDE63L0XP]

A Kremlin aide told reporters that only some 7,000 sq km out of a total of 560,000 sq km in the "southern part" of the zone remained to be agreed upon. In 2007 the two sides decided on the border across a fjord inlet at the southern tip of the region.

The Barents Sea dispute is part of a wider global debate about territorial claims in the Arctic, a region increasingly accessible to industry due to global warming and new technology.

The race for the Arctic, symbolised in a Russian submarine planting a flag on the North Pole seabed in 2007, threatens to raise international tensions and worries greens that environmental issues could take a back seat to energy interests.



SHTOKMAN PUSH

The so-called Barents Sea gray zone is located between the huge Shtokman gas discovery on the Russian side, a reservoir which holds enough gas to meet global demand for a year, and two oil and gas fields off Norway.

Norway's energy champion Statoil (STL.OL), as well as fellow minority partner Total (TOTF.PA) of France, are helping develop the Gazprom-run (GAZP.MM) Shtokman project due to supply gas to Europe and liquefied natural gas (LNG) to the United States.

"We are glad to see Statoil among our partners in Shtokman (and) we plan to cooperate with them on other big projects," Medvedev said, mentioning the development of Prirazlomnoye oil field. He also sought Norwegian expertise in energy efficiency.

Earlier, Medvedev told a Norwegian newspaper that the Shtokman project could begin in 2010 or 2011.

The exploitation of shale gas resources in the United States in past years has lowered energy prices and limited need for LNG imports, putting a question mark over the need to rapidly start the technically challenging and costly Shtokman project.

Norway's Prime Minister Jens Stoltenberg said the two sides were close to agreeing a regional cooperation deal for their 180 km (112 mile) land border region, including visa-free travel for local residents and less red tape for business.

A small group of environmentalists picketed Medvedev's arrival at the Royal Castle, where he was greeted by Norwegian head of state King Harald V. They waved a banner about what they saw as poor environmental norms in Russia's Kola Peninsula.

"Accelerating oil and gas exploration is raising the prospects of Exxon Valdez scenarios -- spills in highly susceptible environments in the absence of clean-up rules and infrastructure," the World Wildlife Fund said in a statement on Monday, referring to the 1989 oil tanker spill in Alaska. (Additional reporting by Gwladys Fouche and Richard Solem in Oslo, Writing by Wojciech Moskwa; Editing by Myra MacDonald)



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