oil vesselOn Wednesday 18 May, the Norwegian Government officially granted ten exploration licences to oil and gas companies to operate in the Barents Sea. Norwegian Petroleum and energy minister Tord Lien presided over an official ceremony marking the 23rd Licensing Round in Hammerstein.

Out of 26 companies that applied for licenses, thirteen have been offered participating interest, while five companies have been offered operatorships. The five operatorships went to Norwegian energy firms Statoil and Det Norske, Swedish petroleum firm Lundin, and British energy firms Centrica and Capricorn (Cairn Energy).

Russian Oil Major Lukoil was one of the firms offered a participating interest in one of the licensing areas. The Russian company was given a 20% stake in a licensing area (PL858) along the Norwegian maritime border with Russia. The granting of licenses to Lukoil to operate in Norwegian waters is an interesting development as Lukoil does not have approval to undertake offshore projects in Russia. “If a discovery is made [in the license area] it will be a paradox that Russian private capital appears welcome in Norway, but not in Russia,” said Daniel Fjærtoft from the business analyitics Sigra Group. Arild Moe, an expert on Russian petroleum resources from the Fridtjof Nansen Institute, added that “Lukoil’s participation can be seen as a signal about a desired commercial cooperation with Russian companies despite the current limitations on the Russian shelf because of the sanctions [against Russia over the crisis in Ukraine]” Citing cooperation with Russia in fisheries management as a good example to work form, Mayor of Kirkenes Rune Rafaelsen, who also took part the ceremony in 18 May ceremony in Hammerstein, remarked that “In a peace perspective, it is of significance for both countries” to develop such joint energy projects.

However, not everyone is happy. As the licensing blocks are located in areas further north and east in the Barents Sea than previous licensing blocks issued by the Norwegian government, the decision to grant licenses in these areas has drawn criticism from a number of environmental groups which have opposed expanding oil and gas activities in the Arctic. Two Norwegian law professors, Beate Sjåfjell and Anita Halvorssen, currently have a case being heard at the Norwegian Supreme Court in which they are trying to argue that oil and gas drilling in the Arctic is against the Norwegian Constitution.