Norway’s Labor Seeks to Soothe Oil Industry Amid Lofoten Shift

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Norway’s Labor Seeks to Soothe Oil Industry Amid Lofoten Shift


Category: Energy

Norway’s oil industry has nothing to fear from a return to power of the Labor Party in elections later this year, according to the deputy leader of the biggest opposition group.

A new government led by Labor, which polls show is the likely outcome from September’s election, would continue to ensure stable and predictable terms for the oil industry, including access to new offshore blocks in the Arctic, deputy leader Trond Giske said in an interview Thursday as the party kicked off its congress in Oslo.

“We’ve actually been the main architect of Norwegian petroleum policy for about 50 years, and it will remain firm with our government,” he said. “We need steady exploration activity for a steady development pace.”

Giske’s comments come as the party earlier this year signaled a more restrictive position on exploration off the environmentally sensitive Lofoten islands. Under the leadership of Jonas Gahr Store, Labor has also joined forces with other opposition parties to force oil companies to power platforms using hydro power from shore. That’s more expensive than powering them directly with offshore gas.

Norway has been hard hit by the slump in crude prices that started in 2014, cutting state income from oil production and reducing the offshore industry’s workforce by about 50,000 people.

The proposal on Lofoten, backed by the party’s leadership, would delay a so-called impact study of oil and gas activity in two areas in the Norwegian Sea, while approving it in a third. Such a study is the first step for opening new areas to exploration and production.

A majority of regional Labor groups has backed the proposal and the party expects congress delegates to approve the measure over the weekend, Giske said in an interview after he addressed a demonstration of oil workers on Thursday outside the congress venue in Oslo. Two unions with close ties to Labor, Fellesforbundet and Industry Energy, organized the gathering to voice “disappointment” with the proposal, saying the impact study of one area is an “absolute minimum.”

Opinion polls show Labor and support parties could get a majority in parliament in September, ousting Erna Solberg’s Conservative-led coalition after four years in power.

Source: Bloomberg