Russia, Norway Sign Arctic Border Agreement

MOSCOW (Dow Jones Newswires), Sep. 15, 2010

Russian and Norwegian leaders signed an accord Wednesday delineating the two countries' maritime border, ending a 40-year dispute over a region believed to contain vast oil and gas reserves.

The agreement was signed by Russian President Dmitry Medvedev and Norwegian Prime Minister Jens Stoltenberg during a televised ceremony in Russia's northern city of Murmansk, a Barents Sea port.

"The establishment of clear borders of jurisdiction in the region where our interests intersect is doubtless very significant and a very
important step forward," Medvedev said.

The deal will allow both Norway and Russia to chart the maritime depths of the ocean with the aim of discovering potential oil and natural gas.

"I hope this accord will be able to strengthen the potential of our cooperation in the energy sphere," Medvedev said.

"Primarily it is of course (about) energy, because unregulated questions of territorial demarcation and the delineation of the maritime space have not allowed us to carry out major energy projects."

The deal regulates energy resources in the region, requiring the two countries to jointly develop oil and gas deposits that cross over the

The agreement will "effectively remove possible disagreements over the distribution of hydrocarbon resources," the Kremlin said in a
statement on its web site.

It also regulates fishing rights and "objectively narrows the likelihood of conflict situations in this sphere," the Kremlin said in a statement.

Since 1970 Norway has been in dispute with first the Soviet Union and then Russia over a 176,000-square-kilometer (67,950-square-mile) maritime area straddling their economic zones in the Barents Sea and the Arctic Ocean.

Medvedev and Stoltenberg struck the deal in Oslo in April, agreeing a compromise in which the contested zone was to be divided almost equally between the two countries.

Canada, Denmark, Norway, Russia and the United States are at odds over how to divvy up the Arctic seabed, thought to hold 90 billion barrels of oil and 30% of the world's undiscovered gas resources, according to the U.S. Geological Survey.

Russia would need to spend seven to 10 years on prospecting and studying the Arctic shelf before beginning development of oil and gas deposits, Natural Resources Minister Yury Trutnev said in Murmansk, the RIA Novosti news agency reported.

"The most optimistic time scale (to begin development) is 10-15 years," Trutnev said.

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