Norway cuts seismic study in Arctic seas

By Wojciech Moskwa

OSLO, June 27 (Reuters) - Norway scaled down on Friday a seismic survey of undeveloped offshore seas near the Lofoten islands in the Arctic, a study needed before a decision on whether to allow oil and gas activities in the pristine region.

Problems with seismic equipment have delayed the start of the project, deemed as fundamental by Norway's oil industry but which also faces serious political and environmental obstacles.

The offshore industry has lobbied hard on opening up the area, saying that the longevity of Norway's oil and gas boom hinged on access to new potentially resource-rich areas, especially as output from North Sea oilfields declines.

The Norwegian Petroleum Directorate's (NPD) 2008 seismic programme -- its biggest ever in the region which also has large fishing interests -- was scheduled to run from mid-June to the end of July and cover 700 square kilometres of seas.

But the scans have not yet started because of a shipyard delay of a vessel owned by Bergen Oilfield Services (BOS) and an engine room-fire of a Petroleum Geo-Services (PGS.OL) vessel.

"We are sticking to the plan, we won't prolong it," NPD spokeswoman Eldbjoerg Vaage said, adding that it was not yet clear when the Lofoten area seismic studies will begin.

She said various factors were behind the decision not to extend the time horizon of the seismic scans, including a more active fishing season from the start of August.

The centre-left government has postponed a final decision on whether to open the area -- off Norway's Northwest coast where the Barents and Norwegian Seas meet -- for oil and gas exploration until after the next parliamentary election in late 2009, pressured by fishing lobbies and environment concerns.

Smaller parties in the government have also built their election platform on popular opposition to opening up the region, which may put them on a collision course with the Labour party which has usually accommodated oil industry demands.

The NPD, responsible for managing the development of oil and gas activities on the Norwegian shelf, planned extensive 2D (two-dimensional) and some more complex 3D seismic scans.

Seismic vessels use sound waves to map the ocean floor and indicate which areas may have deposits of oil or gas, which can later be confirmed by more expensive and invasive drilling.

The fishing industry has claimed that seismic scans impact fish and the NPD is also researching that issue, it has said.

The area off the picturesque Lofoten islands and just north of it, Nordland VII and Troms II, has been increasingly interesting for oil and gas companies with the development of new deep-water and sea-bed exploration technology, soaring energy prices and limited availability of acreage worldwide.