Norway agency wants to halt oil industry's march north

OSLO, March 28 Fri Mar 28, 2014 3:43am EDT

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OSLO, March 28 (Reuters) - Norway should not award oil and gas exploration blocks further north in the Arctic Barents Sea and should withdraw more than a dozen blocks from the current licencing round, the Norwegian Environment Agency said on Friday.

The agency, which advises the government but cannot block its decisions, said more rigorous assessment of ice conditions was needed, including consideration of years when the polar ice cap might expand further.

"It is necessary to have a thorough scientific process to set a limit to the ice edge, which also covers the more extreme years," Ellen Hambro, the agency's director said in a statement. "The northernmost blocks nominated in the southern Barents Sea ... are located in areas where there may be ice."

"Before such a limit is set, no blocks further north in the Barents Sea south should be awarded," she added

Speaking to business daily Dagens Naeringsliv, however, she expressed doubt that the government would take their position into account.

"I don't believe that this recommendation will change anything. We have been doing oil business in the Barents sea for 30 years, so moving slightly north is not really new," she told the paper.

Norway proposed last month to award 61 blocks in its new areas licencing round, including 54 in the Barents Sea, as the energy sector moves northward in search of new finds as the polar ice cap retreats.

The maximum ice, usually reached in March, has stayed well clear of the proposed blocks in recent years and this year's top ice extent will be among the lowest of record with the Barents ice particularly low, the National Snow and Ice Data Center said.

Norway's Statoil has been moving northward rapidly with an extensive exploration campaign in the area. Austria's OMV made the northernmost discovery last year and Italy's ENI plans to start up Norway's first Barents oil project this year.

Greenpeace, which calls Statoil an "Arctic aggressor", said this year's exploration plans were its most dangerous foray yet, threatening Bear Island, a wildlife sanctuary and occasionally home to polar bears. (Reporting by Balazs Koranyi and Camilla Knudsen, editing by William Hardy)

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