License to drill. In the highest North

“This is important for employment and value creation in the Norwegian oil and gas industry,” said Minister of Petroleum and Energy Tina Bru as she on Wednesday announced awards in the  country’s 25th Licensing Round.

A total of seven companies are offered stakes in four license areas, the Ministry informs.

Three of the license areas are in the Barents Sea, among them one in the northernmost part of the Arctic waters.

License area No 1134 stretches north of the 74th parallel and will be operated by Equinor in cooperation with Lundin and Petoro.

It is one of the northernmost license areas ever issued on the Norwegian shelf. From before, Equinor operates two other licenses at the same altitude, obtained in the 24th and 22nd Licensing Rounds.

In addition to Equinor, the licenses are awarded to Shell, Idemitsu Petroleum, INEOS E&P, Lundin Energy, OMV and Vår Energi.

The Norwegian government is under harsh attack from environmental organisations, as well as a growing number of foreign countries, for its continued drilling in Arctic waters.

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“Are there any adults home?” Greenpeace asked rhetorically when the Norwegian Government in early June announced its latest Awards in Predefined Areas (APA). The awards include 84 blocks on the Norwegian continental shelf, among them 70 in the the Barents Sea.

Frode Pleym, head of Greenpeace Norway, called the new awards “oil-black politics.”

“Yesterday it became clear that Norway will not reach its climate obligations. Today the government offers oil companies massive new exploration. Are there any adults at home?” he said in a statement.

Despite the Norwegian government’s continued faith in the future of oil, there is a significant declining interest among oil companies in the new licenses areas.

Only seven companies bid for licenses in the acreage offered as part of the 25th Round. That is significantly less than in the previous rounds. In 2019, a total of 11 companies took part in the 24th License Round, and in 2015 - 26 companies bid for licenses in the 23rd Round. In 2012 - as many as 36 companies applied for blocks as part of the 22nd License Round.

The Ministry of Petroleum and Energy has also made major cuts in the number of awards offered as part of the latest round. Originally, oil companies were offered as many as 136 blocks as part of the round. In the end, only 13 blocks were awarded.

Norway offers oil companies drilling acreage as part of regular licensing rounds, as well as so-called Awards in predefined areas (APA).