Norway Postpones 26th Licensing Round To 2025

Norway Postpones 26th Licensing Round To 2025
Norway has decided not to issue licenses for energy companies to explore oil and gas in frontier areas during the reign of the current parliament.

Norway has decided not to issue licenses for energy companies to explore oil and gas in frontier areas during the reign of the current parliament.

According to a Reuters report, the decision to postpone the 26th licensing round was part of the minority government's budget deal with the opposition Socialist Left Party (SV). The licensing round will be postponed until the reign of the current parliament ends in 2025.

The news was first reported by Norwegian public broadcaster NRK and news agency NTB, citing anonymous sources.

The news outlets reported that SV wants Norway, the biggest supplier of natural gas to the European Union and a major oil exporter, to stop exploring for new petroleum resources to fight climate change.

"SV has had this as a demand for this year and we went along with that. And have accepted that this can be held off for this parliamentary period," oil and energy minister Terje Aasland said.

In essence, this is an extension of an agreement that the minority cabinet and SV made last year when the government won the elections, which delayed the 26th licensing round by a year.

Aasland told Reuters that this is "no drama" as authorities will still issue licenses to oil companies in a parallel licensing around called the APA round, in so-called mature areas that are already open to oil companies.

The difference between the APA and the 26th licensing round is that the latter grants the right to oil companies to explore and produce oil and gas in areas not explored previously.

"The importance of the numbered rounds has decreased over the years. What is important for us for maintaining activity and developing the Norwegian Continental Shelf, are the [APA] rounds. And there we have been clear: these will continue, they will be the basis for how we develop the shelf going forward," Aasland said.

The CEO of state-controlled oil and gas energy major Equinor expressed concern at the decision. "We are worried that the framework conditions for the oil and gas industry in Norway are being challenged twice a year with a budget and then with the updated budget. We are also worried that the industry was not asked for advice before the decision was made," Anders Opedal told Reuters.

It is worth noting that the government, which is in power since last year, led by Labour Party Prime Minister Jonas Gahr Stoere, pledged to ‘develop, not phase out’ offshore petroleum production – Norway's biggest industry.

Also, previous rounds have attracted a fewer number of companies – 7 in 2021, 11 in 2018, and 26 in 2016.

To contact the author, email bojan.lepic@rigzone.com


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