March 30, 2020 / 9:35 AM / 2 months ago

Norway proposes new oil exploration blocks, but none in Barents Sea

OSLO (Reuters) - Norway on Monday offered oil firms the chance to bid for 36 new offshore exploration blocks in an annual licensing round in mature areas, but for the first time in a decade that did not include any new acreage in the Arctic Barents Sea.

The energy ministry, announcing the plan on Monday, said it was still important to plan for the future despite the challenging environment, which has seen oil prices slump.

However the proposed number of blocks on offer was down from 90 blocks proposed in the previous round a year ago, of which the government eventually awarded 69 blocks.

All the blocks are offered in the western part of the Norwegian Sea, with interested parties asked to submit comments in a public hearing by May 11, the oil and energy ministry said.

“In demanding times, it is important to plan for the future,” Norway’s Oil and Energy Minister Tina Bru said in a statement.

“Regular access to new exploration is crucial to further develop our largest industry and maintain activity on the Norwegian continental shelf.”

While no new blocks were proposed in the Barents Sea on Monday, the ministry told Reuters that Norway would consider including some in the 25th frontier areas licensing round scheduled to be announced later this year.

Frontier, or “numbered”, rounds focus on areas with greater geological uncertainty, but also with greater potential for larger discoveries.

Greenpeace, which has previously called on Norway to stop exploring for new petroleum resources, said there would be little demand given the recent slump in oil prices.

“It clearly shows that there is little appetite from the industry for drilling in the Barents Sea, up in the sensitive Arctic,” Frode Pleym, head of Greenpeace in Norway, told Reuters.

Norway introduced annual rounds for mature sites in 2003 to expand areas that have been already explored or had existing oil and gas infrastructure.

Greenpeace said the country should use the oil market crash to speed up its transition to renewable energy.

Oil prices fell sharply again on Monday, with North Sea oil hitting its lowest in 18 years at below $23 a barrel on heightened fears that the shutdown of much of the global economy due to the coronavirus could last months, hurting fuel demand. [O/R]

Reporting by Nerijus Adomaitis, editing by Gwladys Fouche, Susan Fenton and Jan Harvey

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