Date ArticleType
3/9/2018 Member News
Norway's Annual APA Round Faces Opposition

Norway's annual APA round faces opposition

Several government agencies in Norway speak out against awards in pre-defined areas licensing exercise, claiming marine habitats are under threat

Beate Schjolberg
9 Mar 2018 00:00 GMT

Norway’s plans to expand the number of offshore blocks that can be re-licensed every year are facing strong opposition from some of the state’s own environmental and research agencies because of potential harmful effects on marine habitats.

In January, the Petroleum & Energy Ministry proposed to add 47 blocks in the Norwegian Sea and 56 blocks in the Barents Sea to the awards in pre-defined areas (APA) round for 2018, giving interested parties until the end of February to comment.

The annual rounds aim to secure a high turnover of unlicensed and relinquished acreage in well-known areas that are already open for petroleum activity, to ensure that resources are brought on stream while ageing platforms, pipelines and other infrastructure are still in operation.

Originally meant to cover mature acreage, the APA rounds have in recent years been expanded to include frontier blocks near new discoveries to encourage exploration that can boost volumes and make new developments viable faster.

Of the proposed new APA blocks, 14 were part of last year’s ordinary licensing round of frontier acreage.

“We question the basis for changing the status of these areas from frontier to mature in less than a year,” the Norwegian Environment Agency, which is mandated to approve or reject drilling applications, said in a submitted comment to the Petroleum Ministry.

“It is important for the agency to point out that for parts of the proposed areas we have very limited knowledge of the environmental conditions.”

The environment agency was particularly concerned about risk to seabirds, as some species are endangered after seeing their numbers drop by between 75% and 99% over the past 35 years.

New information could lead to tougher restrictions on petroleum activity in blocks where seabirds migrate, the agency said.

The state Institute of Marine Research (IMR) urged the government to keep four of the proposed blocks in the Barents Sea off limits due to sponge habitats.

While no major fish species spawn in any of the proposed blocks, drilling in oil-bearing layers should be avoided in the March through August period because there are drift areas for juvenile fish downstream of the blocks, the IMR said.

The Directorate of Fisheries pointed to potential harmful effects of seismic activity on fish stocks, and advised against seismic surveys between mid-October and February in four of the Barents Sea blocks.

Fisheries organisations wanted stronger measures — 10 of the blocks in the Norwegian Sea and all the blocks in the Barents Sea should be kept out of the APA round, the Norwegian Fishermen's Association said.

“There is considerable fishing activity through large parts of the year with ocean-going line and trawl vessels in the entire proposed Barents Sea area. Awarding these blocks will consequently affect catch rates for these vessels,” the association said.

Another fishing organisation has joined forces with environmental groups Bellona, Greenpeace, WWF, Friends of the Earth and Nature & Youth in a joint statement calling for a halt to APA rounds altogether.

The APA system “does not heed advice based on environmental research and represents a risk to marine habitats that parliament’s management plans are meant to protect. The system undermines a holistic management of the marine environment, and will contribute to increased emissions of climate gases from the oil industry”, the environmental groups said.

The comments from the state agencies and environmental groups are similar to their comments to proposed APA expansions in recent years.

Despite the environmental warnings, the government has nearly doubled the Barents Sea APA area since 2015 as oil companies have stepped up exploration and development planning in Norway’s northernmost basin.

Seven oil companies and the Norwegian Oil & Gas Association welcomed the proposed APA expansion, along with labour unions keen to encourage more activity to make up for job losses in recent years.

“There are still parts of the industry that have not recovered from the challenging consequences of a lower oil price and activity volumes, with a large share of the rig and vessel fleet unemployed,” the Norwegian Confederation of Trade Unions said.

“Exploration and new discoveries are needed to fill the expected activity gap from the early 2020s. Access to exploration acreage is an important prerequisite for many suppliers and jobs.”

The government normally announces the APA round in the second quarter, with a September application deadline followed by awards in January the following year.