Norway says oil price helps renewables push

By Camilla Bergsli

OSLO (Reuters) - High oil prices make life difficult in poorer countries but at the same time also help fuel development of renewable energy sources, Norway's Energy and Petroleum Minister Aaslaug Haga told Reuters on Thursday.

"There are several dilemmas regarding the high oil price," Haga said in an interview. "It makes it difficult for the poor countries. At the same time renewable energy will be developed faster, which is good."

Norway is the world's fifth-largest exporter of oil and the second-biggest supplier of natural gas to Europe.

The wealthy North Sea state has broadly benefited from oil prices surging above $130 per barrel and its $400 billion annual economy has so far felt little impact from higher energy prices.

Haga repeated her party's view against opening up large new swathes of Norway's Arctic seas for oil and gas exploration, as demanded by the oil lobby led by StatoilHydro.

Norway's next parliament after the 2009 election is due to decide on whether more Norwegian Sea and Barents Sea areas should be opened for oil activities, including the waters around the picturesque Lofoten islands.

The debate pits the oil industry against environmentalists, with the present centre-left government somewhere in the middle.

"In the future we may have technology which make it reasonable to produce oil around Lofoten," Haga said, adding that Norway had to get used to gradually declining oil output.

"Oil production will decline going forward. It has already declined. But gas production will rise," said Haga.

Output from many North Sea oilfields is on the decline after nearly four decades of exploitation, forcing Norway to tilt towards production of still abundant natural gas.

(Writing by Wojciech Moskwa; editing by James Jukwey)