June 8, 2010 / 3:53 PM / 9 years ago

WRAPUP 1-Norway, UK to reduce offshore drilling risks

* Norway signals no new deepwater blocks until BP probe

* Britain ups North Sea inspections following U.S. spill

(Adds details, quotes)

By Wojciech Moskwa and Gerard Wynn

OSLO/LONDON, June 8 (Reuters) - Oil and gas producers Norway and Britain on Tuesday moved to reduce the risks of their offshore drilling in the wake of BP’s (BP.L) well blowout and oil spill in the Gulf of Mexico.

Norway, the world’s No. 5 oil exporter, said it was “not appropriate” to open new deep-water areas for drilling until an investigation sheds light on BP’s leak, while Britain said it was increasing inspections on North Sea platforms.

The United States has imposed a six-month moratorium on new drilling permits in Mexico Gulf waters more than 500 feet deep.

The Norwegian freeze does not affect current production but signals a push to slow expansion of exploration to new offshore areas, especially in the Norwegian Sea and the Barents Sea.

“We are now working on the 21st licensing round. It will be conducted in light of what we have experienced in the Gulf of Mexico,” Oil and Energy Minister Terje Riis-Johansen said.

“It is not appropriate for me to allow drilling in any new licenses in deep-water areas until we have good knowledge of what has happened with the Deepwater Horizon (rig operated by BP) and what this means for our regulations,” he added.

Asked by Reuters if this meant that the licensing round, due for completion around mid-2010, would be delayed, a ministry spokeswoman said: “The round will take place as planned and the government will decide which areas to open for activities before the summer break (in July).”

Norwegian oil and gas producer Statoil STL.OL declined to comment on whether the freeze was justified, but said that it was important to have a “good progress” in maturing new licensing acreage in Norway.

“It is positive that the ministry indicates that the time schedule for the next licensing round is maintained,” Statoil Spokesman Gisle Johanson told Reuters.

Norway needs to tap new resources to avoid a sharp fall in output as its North Sea oilfields quickly mature.

But the Mexico Gulf spill has emboldened environmentalists to block any plans to open remote Arctic regions, such as the Lofoten archipellago in the Norwegian Sea and a newly delineated Norwegian-Russian border region of the Barents Sea.

NO BAN

Britain would allow continued deepsea oil activities, Energy Minister Charles Hendry said on Tuesday, as it focused on getting the most out of dwindling oil and gas reserves.

“At this stage it is not considered necessary to halt drilling to the West of Shetland,” a spokesperson for the energy minister said, referring to the last major area around the UK to be developed for oil and gas.

But the new coalition government would double annual inspections of offshore oil and gas drilling rigs in the wake of the Gulf of Mexico oil spill. [ID:nLDE656286] [ID:nN08211982]

Energy Secretary Chris Huhne said that an urgent review had been carried out into the UK’s ability to prevent and respond to spills following the explosion and fire on the Deepwater Horizon rig licensed to BP.

The review had decided the UK’s current system was “fit for purpose”, Huhne said in a statement, describing the UK regime as “already among the most robust in the world.”

That assessment result especially reflected the fact that most of Britain’s existing oil and gas activities were in much shallower water than BP’s Gulf of Mexico rig.

“But the Deepwater Horizon gives us pause for thought and, given the beginning of exploration in deeper waters west of Shetland, there is every reason to increase our vigilance.”

“The events unfolding in the Gulf of Mexico are devastating and will be enduring,” Huhne said. “What we are seeing will transform the regulation of deep water drilling worldwide.”

— Additional reporting by Chris Johnson and Tom Bergin in London and Gwladys Fouche in Oslo

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