Greenpeace has submitted a complaint about the drilling of a new oil well in Norway, which is being developed in partnership with Statoil ASA and OAO Rosneft, the Russian oil company facing international sanctions due to events in Ukraine. Drilling will now be delayed on the Barents Sea prospect operated by Statoil until Norway’s Environmental Agency has reviewed the appeal and given formal go-ahead.
Environmental Risk Accusations
Greenpeace is arguing that the well represents a risk for an oil spill, saying that it is located in dangerously close proximity to important environmental resources such as the polar ice edge and Bear Island — an important nature reserve.
The Greenpeace accusation is backed up by environmental lobbying organisation Bellona. Both organisations have also accused Norway’s Environment Agency of allowing oil companies to begin their drilling operations before complaint deadlines have passed. Greenpeace has accused the Norwegian Agency of allowing this to occur in 156 out of 162 instances during the previous four years alone.
Erlend Tellness, a representative from Greenpeace, said that oil companies typically delayed handing in their applications to the Environmental Agency and placed their drilling rigs into position whilst awaiting the decision in a bid to apply pressure. The Environment Agency responded to the allegations, however, saying that it did not bow to oil company pressure. It issued a press release saying that there were no such instances where a conflict of interest had occurred or where democratic principles had been put aside.
The extent of the delays due to the Greenpeace complaint is yet to be ascertained. However, it is the fifth appeal that the environmental group have filed against Statoil for their Barents Sea drilling activity this year. Greenpeace activists also occupied an oil rig for two days in May as it travelled to drill a Norwegian well in the Hoop region.
A Delay in Operations
The Greenpeace complaint has already led to a delay in drilling. Although drilling has now finished on the top hole, further drilling activity on the deeper layers will wait until the conclusion of the complaint is heard. According to the Norwegian Environment Agency, the original plan was to begin further digging in the middle of September at the earliest.
The Well’s Ownership
Rosneft holds a 20pc license stake for area 713, which is the location of the Pingvin well, and Statoil operates the licence and has an ownership stake of 40pc. The remaining 40pc is owned by Edison International and North Energy ASA.
Rosneft faces international sanctions from Europe and the USA due to its state ownership and the Russian government’s part in the Ukrainian conflict. These sanctions are having a knock-on effect on the company’s work, which involves a mix of offshore and onshore exploration. Reuters have reported today that the company will be cutting jobs and production as well as selling ownership stakes within its Siberian fields, suggesting that the sanctions are now having an effect on the firm, which was once the fastest growing in the oil industry.Last updated on 11:20AM - 11/09/14