Home business Norway runs away from billions of barrels of oil

Norway runs away from billions of barrels of oil

The largest oil producer in Western Europe fell out of love for oil.

To the great dismay of the powerful oil industry and its trade unions, the opposition party decided to withdraw its support for oil exploration for the sensitive Lofoten islands in the Norwegian Arctic during the weekend, creating a solid majority in parliament to keep the area out of play for drilling.

The dramatic shift by Norway's largest party is a major blow to the support that the oil industry has enjoyed, and could mean that the Scandinavian nation is nearing the end of an era that has made it one of the richest in the world made.

Oil companies led by Equinor, the state-controlled ASA, the largest Norwegian producer, have said that gaining access to Lofoten is the key if the country wants to maintain production if resources are used up. Estimates suggest that 1 billion to 3 billion barrels can hide from the archipelago, which is also considered a natural miracle.

"The entire industry is surprised and disappointed," says Karl Eirik Schjott-Pedersen, head of the Norwegian oil and gas association. "It does not offer the predictability on which we depend."

Read more: Big Oil & # 39; s Dream of $ 65 billion Hidden Norway Fades, Even Oil CEO & # 39; s Now Admitting Lofoten Should Be Left Alone Solberg & Coalition Is Pushing To sacrifice Norwegian Lofoten Oil

Yet Labor & # 39; s decision was not a big surprise. Norwegians are beginning to question their largest exports and source of wealth amid growing concerns about climate change. Even some oil managers had already given up Lofoten, who had been kept out of their reach for years due to political compromises.

But the battle is now likely to continue, whether drilling should take place in the Barents Sea. The oil industry is also concerned that Labor may now be willing – or forced – to compromise on other issues the next time it takes over from the government, such as oil tax and an attractive exploration refund for companies that are not profitable.

Angry Union

Norway's largest oil union, Industry Energy, a long-time Labor ally, lashed out at the party's new attitude at Lofoten, which was adopted less than two years after an internal party compromise on the issue.

"It creates imbalances in policy discussions for a sector that depends on a long-term perspective and we cannot accept that," said Frode Alfheim, the leader of the union, by telephone on Monday. "There are probably many people in the industry who wonder what Labor actually stands for."

Labor leader Jonas Gahr Store said Labor remains a proponent of the oil industry and supports the existing tax system.

Nevertheless, he also said last week that he wants oil companies in Norway to commit to a deadline for making operations completely emission-free, an ambition that the country's largest oil lobbyist & # 39; very demanding & # 39; called.

Alfheim from Industry Energy still expects Labor and other large parties to protect the conditions for oil companies and that stricter emission regulations can be a good thing for industry. But the Norwegian authorities should use both "stick and carrot", he added.

"There must be a balance," Alfheim said.

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