Norway agrees to impact study towards oil & gas drilling in arctic waters

Noway's Labour Party announced it would conduct an environmental impact study to determine if it will open Arctic waters to oil and gas exploration around the Lofoten islands located just above the Arctic circle.

Reuters reports the go-ahead for an impact study in the previously off-limits area was announced April 21. Exploration in the environmentally-sensitive area has been prohibited due to the rich cod stock in the waters.  Environmental groups and the tourism industry have long opposed energy development in the area.

The Labour Party's vote for the study is a major step toward future exploration. However, another vote will be taken in 2015 to determine if drilling can actually begin, according to the article. Norway's oil production is expected to fall to a 25-year low in 2013 due to the maturation of North Sea fields. 

Waters off the islands are estimated to hold about 8 percent of Norway's oil and gas reserves with as many as 50 prospects holding approximately 1.27 billion barrels of oil. 

Norway is the world's seventh biggest oil exporter and the largest gas supplier in western Europe. 

To learn more about the gas market in Norway, visit PennEnergy's research area.

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