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Norway PM Views Barents Oil Leak as "Very Serious"
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NORWAY: April 14, 2005


OSLO - Norway's prime minister said on Wednesday that he took a "very serious" view of an oil spill at Statoil's exploration project in the Arctic Barents Sea but said he would not withdraw the company's drilling permit.


Statoil said late on Tuesday that 1.6 cubic metres of hydraulic oil was spilled from the Eirik Raude rig at its Guovca prospect, probably caused by a leak from a hydraulic hose. Statoil has halted drilling to investigate the problem.

The government requires that oil and gas activities in the Barents Sea have "zero emissions".

Prime Minister Kjell Magne Bondevik told parliament's weekly question time that the spill was "quite unacceptable" and said he had demanded a report from the state environmental protection agency.

But he said the government would not withdraw state-controlled Statoil's permit to drill in the Barents Sea, where petroleum activities resumed this year after the government ended a two-year ban in December 2003.

The opposition Socialist Left Party urged Bondevik to outlaw further drilling in the Barents Sea, saying the leak showed that oil companies were unable to keep promises of zero emissions.

"Today the...demands are among the strictest in the world," Environment Minister Knut Arild Hareide told parliament. "We set environmental demands and they have to be met. If they aren't it will have consequences."

It was the third Barents Sea leak reported this year from Ocean Rig's Eirik Raude rig.


POLICE?

Environmental group Bellona said it would report the leak to the police and called it "wholly unacceptable".

Many environmental groups strongly opposed the resumption of exploration in the Barents Sea, saying that is a key spawning ground for cod and other fish. And birds like puffins and cormorants nest along the coasts.

Statoil's exploration vice president for the Norwegian continental shelf Tim Dodson said in a statement: "We take a very serious view of the incident."

"We have stopped the drilling...so we will have a time-out now and look further into this before we continue," Statoil's spokesman Kristofer Hetland said.

The well spudded on April 2 is the second to be drilled in the Norwegian sector of the Barents Sea since the Arctic activity ban ended.

Last month, Norsk Hydro completed the first new Barents well since the ban ended, but it found only traces of oil and not producible amounts.

Oil firms are looking further north because finds further south in the North Sea and Norwegian Sea are getting scarce. Norway is the world's number three oil exporter behind Saudi Arabia and Russia, pumping about 3 million barrels per day.

Statoil has said it plans to drill two Barents wells this year, and Italy's Eni has also said it will drill an Arctic well at its Goliat prospect if it can secure a rig.

Statoil shares traded off 0.2 percent at 111.25 Norwegian crowns ($17.63) at 0930 GMT, underperforming a 0.3 percent rise by the Oslo benchmark index. Ocean Rig shares were down one percent at 41.3 crowns.


Story by John Acher


REUTERS NEWS SERVICE



© 2008 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Reuters.
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14 APR 2005
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Norway PM Views Barents Oil Leak as "Very Serious"

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