Norway may get new oil -- and lawsuits
Norway's first oil drilling in Arctic seas could lead to 22nd-century petroleum -- and 20th-century environmentalist lawsuits. The drilling began in early June off of mainland Norway's northernmost town of Hammerfest. It would have started two years ago but for a pollution scare following the 1977 blowout in the Ekofisk field off of southern Norway. Recently it was delayed two weeks while the rigs were given special inspections following the mysterious sinking of the hotel platform Alexander Kielland in March.
The new test wells are being drilled in two blocks in the north Norwegian Sea 300 miles north of the Arctic Circle. A test drill in one additional block in the Norwegian Sea 600 miles to the southwest joins the two Hammerfest blocks in this summer's inauguration of drilling in the northern 85 percent of Norway's continental shelf. Until now the petroleum exploration and exploitation that has revolutionized Norway's economy had been confined to the southern 15 percent below the 62nd parallel.
So far there has been no blockage of the new drilling by fishermen's boats as threatened. Fishermen and environmentalists have opposed the northern test because the Hammerfest area is one of Norway's richest fishing grounds -- and the local geology of high pressures and shallow gas pockets is one that is prone to blowouts.
Environmentalists have argued that preparations to contain any spill are inadequate, and that Norwegian clean-up equipment is defective -- given its poor showing in the Gulf of Mexico after the Ixtoc I blowout there last year. (The energy ministry's position is that its equipment is effective, but that the Mexicans lacked the specialized boats needed to manipulate the collecting booms.)
A lawsuit could still materialize, possibly on the basis of the legal preference accorded to fishermen and the survival of fishing in Norway. The goverment maintains that there is no violation of law, however, and it has offered fishermen a sweetener of a 35 million kroner ($7.2 million) compensation fund forany damages from the drilling. It has also strengthened restrictions on dumping.
Norway, the only industrialized democcracy with an energy surplus to export (in the form of hydroelectric power as well as oil and gas), hardly needs Arctic oil for current use. Its proven recoverable oil reserve are now estimated as 1. 6 billion tons of oil equivalent -- enough to last a century at Oslo's deliberately slow rate of exploitation. But Norway would be happy to insure its energy future for the century after next as well.
Norway's northern drilling is therefore designed not to tap the most likely pools of oil, but rather to determine the probable extent of hydrocarbons in this vast area -- and to bring new employment to the depressed north.
Under the policy of "Norwegianization" of oil outlined in this year's energy while paper the new drilling is entirely in the hands of Norwegian operators. A few foreign oil concerns are participating only as consultants.
Under the new policy the state-owned Norwegian share in the offshore oil exploitation is also increasing. In the most recent development bids the petroleum share of the state-owned Statoil was increased to 80 percent. Last year Statoil made an operating profit for the first time since its founding in 1972. It is expected to break even this year and is expected to achieve a net profit in 1981.
The financial success of Norwegian oil was underscored this past May, when the government, in an unusual move, suspended its planned borrowing in the middle of the fiscal year. A balance-of-payments surplus, rather than the projected deficit, is now expected this year as a result of rising oil prices. Revenues from producing fields this year are estimated at 22 billion kroner ($4. 5 billion), or double the projections at the time the budget was drawn up last fall.