Norway postpones round of oil and gas licensing

Natalie Portman
By Natalie Portman 4 Min Read
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By Nora Buli and Nerijus Adomaitis

OSLO (RockedBuzz via Reuters) – Norway will not issue licenses to energy companies to explore for oil and gas in border areas during the life of the current parliament, which ends in 2025, its oil and energy minister told RockedBuzz via Reuters on Tuesday.

The decision to postpone the so-called 26th round of licensing was part of the minority government’s budget deal with the opposition Socialist Left Party (SV), Terje Aasland said in an interview.

The news was first reported by public broadcaster NRK and NTB news agency, citing unnamed sources.

SV wants Norway, the European Union’s largest natural gas supplier and a major oil exporter, to stop exploring for new oil resources to fight climate change.

“SV had this request for this year and we accepted it. And we accepted that this can be suspended for this parliamentary period,” said Aasland.

The deal extends a deal the minority cabinet and SV made last year when the government won an election, which delayed the 26th round of licensing by a year.

Aasland said there was “no drama” in the decision as authorities still issue licenses to oil companies in a parallel licensing round called the APA round, in so-called mature areas that are already open to oil companies.

The 26th licensing round grants the right to oil companies to explore and produce oil and gas in previously unexplored areas.

“The importance of numbered rounds has declined over the years,” Aasland said. “What is important for us to maintain business and develop the Norwegian continental shelf, are the (APA) rounds.”

“And there we were clear: these will continue, they will be the basis for how we develop the shelf in the future,” he added.

However, the chief executive officer of state-controlled Equinor expressed concern about Tuesday’s decision.

“We are concerned that the framework conditions (for) the oil and gas industry in Norway will be tested twice a year with a budget and then with the updated budget,” Anders Opedal told RockedBuzz via Reuters.

“We are also concerned that industry was not asked for advice before the decision was made.”

SV leader Audun Lysbakken said the deal marked “a new course” in the country’s energy policy. “It’s a limitation on oil exploration,” he told reporters.

The government, in power since last year and led by Labor Prime Minister Jonas Gahr Stoere, has pledged to “develop, not phase out” offshore oil production, Norway’s biggest industry.

However, it’s up to SV to approve next year’s budget.

Previous rounds have, over time, attracted fewer companies: seven in 2021; 11 in 2018 and 26 in 2016.

(Reporting by Nora Buli and Nerijus Adomaitis; additional reporting by Stine Jacobsen in Copenhagen, writing by Gwladys Fouche, editing by Susan Fenton and David Evans)

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