Norway Refuses to Drill for Billions in Oil in Arctic Region

Source: thehill.com

Politicians in Norway have signaled a shift on their support for oil exploration in the Arctic, delivering a major blow to the country's powerful oil industry.

The opposition Labor Party, the largest party in Norway's parliament and a longtime backer of the nation’s oil industry, has withdrawn its support for oil exploration off the Lofoten islands in the Arctic, Bloomberg reports.

The outlet noted that the party's decision over the weekend comes to the dismay of the country’s powerful oil industry, and signals a potential end to an era that helped transform the nation into one of the world’s most affluent.

The decision means that the country's parliament now has a solid majority opposed to drilling in the area.

The country’s largest oil producer, the state-controlled Equinor ASA, has said having access to the offshore area is crucial for the country to maintain its current level of production.

The Lofoten islands, which are also considered to be a natural wonder, are estimated to hold roughly 1 billion to 3 billion barrels of oil and natural gas, Bloomberg reported.

Karl Eirik Schjott-Pedersen, head of the Norwegian Oil and Gas Association, told the outlet that “the whole industry is surprised and disappointed.” 

“It does not provide the predictability we depend on,” he added.

The move comes days after the government announced plans to tighten restrictions on investing in coal for its $1 trillion sovereign wealth fund as it allows for more investments on renewable-energy infrastructure assets.