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OIL

Norway to create Arctic oil research centre

Norway's ministry of petroleum and energy said on Tuesday it would create a research centre focused on controversial oil and gas activities in the Arctic.

Norway to create Arctic oil research centre
Energy Minister Ola Borten Moe opens the Arctic Energy Agenda Roundtable in Trondheim on Tuesday (Photo: Ned Alley/Scanpix)

"The increased petroleum activity in northern areas will be strengthened through increased knowledge and new technology," Petroleum and Energy Minister Ola Borten Moe said in a statement.

"With the new centre, we move to create an environment of expertise in northern Norway. Our aim is that academia and businesses in the North cooperate to move forward the knowledge frontier linked to Arctic challenges," he added.

Norway is the world's seventh largest oil exporter and ranks second in terms of natural gas exports.

However, its production of the black gold has been steadily declining from a peak in 2001, leading industry players to demand the opening of new prospecting areas in the Arctic, something environmentalists oppose.

According to the US Geological Survey, the Arctic is believed to hold 13 percent of the planet's undiscovered oil reserves and 30 percent of its undiscovered natural gas.

But pumping up the chilled riches is technologically challenging in a region with such a harsh climate, and is also controversial due to fears that such activities will be detrimental to the area's fragile and valuable ecosystem.

The research at the centre is to focus both on developing better technologies for Arctic oil and gas exploration and production and on how to do so in the safest possible way for the environment, ministry spokesman Haakon Smith Isaksen told AFP.

The centre, which is expected to open in mid-2013, would be based in a still undetermined location in northern Norway and "the research will be conducted in cooperation with other research groups in Norway and abroad," the ministry said in a statement.

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ENERGY

Norwegian PM ‘sceptical’ on gas price cap

Norway, which has replaced Russia as Europe's leading supplier of natural gas, said Monday it was 'sceptical' about a gas price cap proposed by a majority of EU members.

Norwegian PM 'sceptical' on gas price cap

“We approach discussions in an open spirit, but we are sceptical of a maximum gas price”, Prime Minister Jonas Gahr Store said in a statement following a phone call with European Commission President Ursula von der Leyen.

“A maximum price does not change the fundamental issue that there is a gas shortage in Europe”, he said.

European energy ministers who met Friday in Brussels said they were in favour of a series of measures aimed at combatting soaring gas and electricity prices, with some calling for a cap on the price of gas imports in the EU.

While the European Commission has proposed a price ceiling on gas imported from Russia, several member states, including Italy, called for a price ceiling on all gas bought by EU states, including liquified natural gas (LNG).

Non-EU member Norway, which has benefitted from soaring prices following Russia’s invasion of Ukraine, has until now kept a low profile on the issue, preferring instead to leave it up to oil and gas companies to negotiate their own contracts.

The Scandinavian country recently replaced Russia as Europe’s leading gas supplier, due to plunging Russian deliveries and an eight percent increase of its own deliveries.

Last week, Norwegian Prime Minister Jonas Gahr Støre told the Financial Times that the country would potentially be open to a price cap and long-term gas agreement to help its European partners.

“I fully understand that Europe now has a profound debate about how energy markets work, how they can secure more affordable prices for citizens, families, industries, and how this shortfall of gas after Putin’s aggression can be handled,” Prime Minister of Norway, Jonas Gahr Støre, told the newspaper.

“Norway is not closing doors to any such discussion,” he added.

However, this weekend he reiterated that it is not the Norwegian government that can directly offer Europe a capped price on gas. He has also moved to clarify that he is open to assessing all the solutions that the EU puts forward, not just price caps and price agreements.

“I tell my European colleagues that it is not me who sells the gas. Licenses are given to companies that pay a high tax, and then they are the ones who sell it,” he told Norwegian newspaper VG this weekend.

READ MORE: What is Norway doing to help ease the European energy crisis?

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