Statoil writes off stake in Russian gas field

Norway's Stataoil announced on Tuesday that it had written off a 24 percent stake in a consortium developing the Arctic Shtokman gas field in Russia, while stating its continued interest in the project.

The initial agreement in which Russia's Gazprom held a controlling 51 percent stake and France's Total 25 percent in the consortium expired at the end of June with the three companies failing to agree on technical and financial plans to develop the massive gas field.

As it had stated it would do if the agreement lapsed, Statoil booked a charge of 2.1 billion kroner (286 million euros) which completely writes off the value of the stake, said spokesman Fredrik Norman.

"But we remain in discussions with Gazprom with the goal of continuing this project in a profitable way," he told AFP.

Some analysts nevertheless said the move may signal a possible disengagement by Statoil from the technologically complex and expensive project as the company has other projects which would provide higher returns.

Statoil and Total were reported to have been unhappy with cost overruns and delays that hit the Gazprom-led venture — a field discovered two decades ago but still untapped because of its forbidding environment in the Arctic.

Total has declined to comment on the future of Shtokman's development except to signal its continued interest.

Gazprom said the makeup of the consortium to develop the Barents Sea field it believes holds enough natural gas to supply the world for a year would not be decided before September.

Russian news reports said Royal Dutch Shell may join the project.

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NGOs take Norway to European Court over Arctic oil exploration

Two NGOs and six young climate activists have decided to take Norway to the European Court of Human Rights (ECHR) to demand the cancellation of oil permits in the Arctic, Greenpeace announced on Tuesday.

NGOs take Norway to European Court over Arctic oil exploration
Northern Norway. Photo by Vidar Nordli-Mathisen on Unsplash.

It’s the latest turn in a legal tussle between environmental organisations Greenpeace and Young Friends of the Earth Norway on one side and the Norwegian state on the other.

The organisations are demanding the government cancel 10 oil exploration licenses in the Barents Sea awarded in 2016, arguing it was unconstitutional.

Referring to the Paris Agreement, which seeks to limit global warming to less than two degrees Celsius above pre-industrial levels, the organisations claim that the oil licenses violated article 112 of Norway’s constitution, guaranteeing everyone the right to a healthy environment.”

The six activists, alongside Greenpeace Nordic and Young Friends of the Earth Norway, hope that the European Court of Human Rights will hear their case and find that Norway’s oil expansion is in breach of human rights,” Greenpeace said in a statement.

In December, Norway’s Supreme Court rejected the claim brought by the organisations, their third successive legal defeat.

READ MORE: Norway sees oil in its future despite IEA’s warnings 

While most of the judges on the court agreed that article 112 could be invoked if the state failed to meet its climate and environmental obligations– they did not think it was applicable in this case.

The court also held that the granting of oil permits was not contrary to the European Convention on Human Rights, in part because they did not represent “a real and immediate risk” to life and physical integrity.

“The young activists and the environmental organisations argue that this judgment was flawed, as it discounted the significance of their environmental constitutional rights and did not take into account an accurate assessment of the consequences of climate change for the coming generations,” Greenpeace said.

On Friday, the Norwegian government unveiled a white paper on the country’s energy future, which still includes oil exploration despite a warning from the International Energy Agency (IEA).

The IEA recently warned that all future fossil fuel projects must be scrapped if the world is to reach net-zero carbon emissions by 2050.

The Norwegian case is an example of a global trend in which climate activists are increasingly turning to courts to pursue their agenda.