Mikael HolterApril 8, 2019, 6:00 AM GMT+2
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Western Europe’s biggest petroleum producer is falling out of love with oil.
To the dismay of the nation’s powerful oil industry and its worker unions, the opposition Labor Party over the weekend decided to withdraw its support for oil exploration offshore the sensitive Lofoten islands in Norway’s Arctic, creating a solid majority in parliament to keep the area off limits for drilling.
The dramatic shift by Norway’s biggest party is a significant blow to the support the oil industry has enjoyed, and could signal that the Scandinavian nation is coming closer to the end of an era that made it one of the world’s most affluent.
Oil and gas account for more than half of Norway’s exports
Source: Statistics Norway
Note: 2018 figures
Oil companies led by state-controlled Equinor ASA, the biggest Norwegian producer, have said that gaining access to Lofoten is key if the country wants to maintain production as resources are being depleted. Estimates suggest that 1 billion to 3 billion barrels could be hiding off the archipelago, which is also considered a natural wonder.
“The whole industry is surprised and disappointed,” said Karl Eirik Schjott-Pedersen, head of the Norwegian Oil and Gas Association. “It doesn’t provide the predictability we depend on.”
Yet Labor’s decision wasn’t a big surprise. Norwegians are starting to question their biggest export and source of wealth amid growing concerns over climate change. Even some oil executives had already given up on Lofoten, which has been kept off limits for years thanks to political compromises.
But the battle will now likely move on to whether drilling should continue in the Barents Sea. The oil industry also fears that Labor now could be willing — or forced — to compromise on other issues the next time it takes the reins of government, such as petroleum taxes and an attractive exploration refund for companies that aren’t profitable.
Norway Is Walking Away From Billions of Barrels of Oil – Bloomberg
Mikael HolterApril 8, 2019, 6:00 AM GMT+2 LISTEN TO ARTICLE Want the lowdown on European markets? In your inbox before the open, every day. Sign up here. Western Europe’s biggest petroleum producer is falling out of love with oil. To the dismay of the nation’s powerful oil industry and its worker unions, the opposition Labor… [Read More]