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OO RUEHWEB

DE RUEHNY #0396/01 0891316
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O 301316Z MAR 06
FM AMEMBASSY OSLO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3707
INFO RUEHCP/AMEMBASSY COPENHAGEN PRIORITY 2038
RUEHHE/AMEMBASSY HELSINKI PRIORITY 7773
RUEHLO/AMEMBASSY LONDON PRIORITY 1330
RUEHMO/AMEMBASSY MOSCOW PRIORITY 3874
RUEHOT/AMEMBASSY OTTAWA PRIORITY 3008
RUEHRK/AMEMBASSY REYKJAVIK PRIORITY 0664
RUEHSM/AMEMBASSY STOCKHOLM PRIORITY 2805
RUCNDT/USMISSION USUN NEW YORK PRIORITY 0148
RUEHBS/USEU BRUSSELS PRIORITY

C O N F I D E N T I A L OSLO 000396 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT FOR EUR/NB, OES/OA, L, AND EB/ESC/ 
 
E.O. 12958: DECL: 03/30/2016 
TAGS: PREL EPET ENRG UK NO
SUBJECT: NORWEGIAN CLAIMS IN HIGH NORTH EXPANDING? 
 
REF: A. 05 OSLO 1708 
     ¶B. OSLO 363 
     ¶C. EVANS-WEBSTER ET AL. E-MAIL 3/30 
 
Classified By: Pol/Econ Chief Mike Hammer for reasons 1.4 b and d 
 
¶1.  (C) Summary and action request.  Norway may soon lay 
claim to a large swath of Arctic resources around the 
Svalbard archipelago.  Already the source of international 
disputes over fishing rights, Svalbard's unique (and in some 
cases unclear) status internationally has the potential to 
create further political problems as countries in the region 
vie for the region's energy resources.  While in recent years 
the U.S. has maintained no official position on the Norwegian 
sovereignty beyond what is contained in the 1920 Treaty of 
Spitzbergen, other countries have defined positions which are 
at odds with Norwegian views.  As the region's resources feed 
into the future energy picture, we will need to develop an 
official position on the region if only because we are bound 
to be asked for our views, both officially and by the press. 
There are also potentially significant commercial 
implications. Action Request:  Post would appreciate 
Department guidance on the U.S. position on the 200 mile 
Svalbard Fisheries Protection Zone and the U.S. position 
regarding an extension of the Norwegian Exclusive Economic 
Zone into Svalbard based on United Nations Convention on the 
Law of the Sea (UNCLOS) continental shelf continuation 
provisions.  End Summary. 
 
LINGERING DISPUTE OVER FISHERIES AND NOW ENERGY RESOURCES 
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - 
 
¶2.  (SBU) Svalbard sits in an area where Norwegian, Russian, 
EU, and U.S. interests in energy security intersect.  Norway 
was granted sovereignty over the Svalbard archipelago and its 
territorial waters in the 1920 Spitzbergen Treaty.  In 1977, 
Norway extended its reach by unilaterally imposing a 200 mile 
Fisheries Protection Zone (FPZ) around the island chain 
(reftel A).  Norway's right to establish and enforce such an 
FPZ is contested by Russia, Spain, and Iceland.  If estimates 
of the region's energy wealth are accurate, the argument over 
who has access to the region's resources will no longer be 
about fish but fossil fuel.  In recent meetings, U.S. oil 
executives have shared with us their concerns (reftel B) that 
Svalbard could be the source of future political problems as 
Arctic nations' interests collide in the region. 
 
¶3.  (SBU) The Norwegian Petroleum Directorate (NPD) recently 
conducted an expedition to Svalbard to determine the extent 
of the continental shelf.  Prior NPD research indicated that 
significant hydrocarbon reserves may lie in and around the 
Svalbard archipelago.  Norwegians are preparing to send 
documentation of their claim to the UN Commission on the 
Limits of the Continental Shelf in July.  If Norway can prove 
that its continental shelf continues north through the 
Svalbard archipelago, it may extend its Exclusive Economic 
Zone under United Nations Convention on the Law of the Sea 
(UNCLOS) to a region stretching to the 85th parallel.  In 
2001, Russia attempted (unsuccessfully) to extend its Arctic 
claims under UNCLOS arguing that there was a northward 
continuation of the Russian continental shelf; now Norway 
seems poised to do the same. 
 
BRITS DISAGREE WITH NORWAY'S POSITION: AT STAKE, BEAUCOUP 
BUCKS 
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 
- 
 
¶4.  (C) The Ambassador recently attended a senior level 
meeting in Svalbard where the British Ambassador and 
Norwegian State Secretary Skogrand entered into a sharp 
exchange of views on the subject of Norwegian claims in the 
region.  The local UK Embassy informed us that the Norwegians 
and Brits held High North bi-lateral talks on 13 March in 
London, and following these discussions it appears the Brits 
felt it necessary to formally restate their position on 
Svalbard by issuing a diplomatic note laying out their 
position.  Briefly, the British believe that Svalbard 
generates its own Exclusive Economic Zone separate and 
exclusive from that generated by the Norwegian mainland. 
Since any extension of a Svalbard EEZ would sit on its own 
continental shelf, any EEZ there is subject to the 1920 
Spitzbergen Treaty's equal access, equal treatment and tax 
limitation provisions. The British dipnote asserts that 
Article 8 of the Spitzbergen treaty, which caps levies on 
mineral exports at one percent, would apply to petroleum 
exports (as opposed to a Norwegian claim that would apply 
their petroleum tax regime of 78 percent).  At our request, 
the British Embassy in Oslo provided us a copy of their 
diplomatic note and talking points to Norway (paragraphs 8-10 
below). 
 
U.S. POSITION UNCLEAR 
- - - - - - - - - - - 
 
¶5.  (C) The U.S. is a signatory to the 1920 Spitzbergen 
Treaty.  Ref C brings to light that the question of Svalbard 
sovereignty was reviewed at senior levels of the USG in 1976. 
 However, we are not aware if any action was taken 30 years 
ago, or in more recent years, to further define an official 
USG position regarding the Svalbard FPZ or Norwegian claims 
based on continental shelf extensions.  As our energy 
interests in the area grow, and as access rights to the 
region's resources become more contentious, we believe we may 
need to clarify the U.S. position on Svalbard, hence our 
action request for guidance. 
 
¶6.  (C) Comment:  We have been sensing over the past year 
that Norway has been more visibly asserting its sovereignty 
over Svalbard; including, hosting high-level foreign 
delegations in the archipelago, increasing Norwegian Coast 
Guard patrols and boardings, and conducting research on the 
extent of the continental shelf.  Since the Stoltenberg 
government took over in October 2005, it has made the high 
north its top priority and been quite explicit that there are 
significant Norwegian interests in the Arctic that must be 
protected.  While Norway has not/not stated that it will turn 
its FPZ into an EEZ, the Norwegians are clearly interested in 
doing so and may be looking for support for their claims. 
The Brits negative response to Norway (see UK dip note in 
paras 8-10 below) is drawing a line in the sand.  The USG 
should also develop a position on the issue as we are more 
frequently being asked for our views, including in the press, 
on issues relating to the status of the archipelago. 
 
¶7.  (C)  Comment cont. While the U.S. has no territorial 
claims on the Svalbard archipelago, the commercial 
implications for U.S. firms could be huge depending on the 
outcome of this issue.  As the British diplomatic note 
states, the Spitzbergen treaty under Article 8 specifies the 
tax regime which applies to the exploitation of minerals in 
Svalbard, i.e., a one percent cap on levies on mineral 
exports.  However, if Norway is successful in asserting its 
continental shelf claim, its domestic laws would apply, 
meaning that oil companies involved in extraction in this 
area would be taxed at the current rate of 78 percent.  End 
Comment. 
 
¶8.  (SBU) Text of the Diplomatic Note presented by the UK to 
the Norwegian MFA on March 23 (or thereabouts) 
 
Begin Text. 
 
Her Britannic Majesty's Embassy presents their compliments to 
the Royal Norwegian Ministry of Foreign Affairs and has the 
honour to refer to the Treaty concerning the Archipelago of 
Spitzbergen (Svalbard), done at Paris on 9 February 1920. 
 
In the light of recent activity by the Norwegian authorities 
in the area north of the northern coastline of Norway, the 
United Kingdom considers that it is timely to reiterate its 
position concerning the application of the Treaty of Paris to 
the maritime zones generated around Svalbard. 
 
The United Kingdom considers that the Svalbard archipelago, 
including Bear Island, generates its own maritime zones, 
separate from those generated by other Norwegian territory, 
in accordance with the United Nations Convention on the Law 
of the Sea.  It follows therefore that there is a continental 
shelf and an exclusive economic zone which pertain to 
Svalbard. 
 
Second, the United Kingdom considers that maritime zones 
generated by Svalbard are subject to the provisions of the 
Treaty of Paris, in particular Article 3, which requires that 
Svalbard should be open on a footing of equality to all 
parties to the Treaty of Paris, and Article 8, which inter 
alia specifies the tax regime which applies to the 
exploitation of minerals in Svalbard. 
 
The United Kingdom expects that the Norwegian authorities 
will fully comply with the obligations of Norway under the 
Treaty of Paris, as set out above. 
 
The British Embassy avails itself of this opportunity to 
renew to the Royal Norwegian Ministry of Foreign Affairs the 
assurances of its highest consideration. 
 
End text 
 
¶9.  (SBU) UK talking points accompanying their Diplomatic 
Note. 
 
Begin Text. 
 
The UK welcomes the new focus of the Norwegian Government on 
the High North / Barents region. We had positive wide-ranging 
bilateral talks in London on 13 March that identified many 
areas of common interest. 
 
These include energy security, sustainable resource 
management, environmental protection and climate change. Our 
interests in developing a relationship with Russia based on 
the rule of law and respect for international standards are 
also similar. 
 
However, you will know that one area where we, and many other 
countries, disagree with Norway is over its interpretation of 
the 1920 Svalbard Treaty. Over the past three decades we 
have, as a State Party to the Treaty, reserved our position 
on the question of Norway's assertion that Svalbard's 
continental shelf is an extension of the Norwegian shelf, and 
on the Fisheries Protection Zone unilaterally declared by 
Norway around Svalbard in 1977. 
 
An increasingly active policy by Norway in enforcing the 
Fisheries Protection Zone and in issuing hydrocarbon licences 
in the Barents Sea, together with challenges to Norway's 
activities by countries such as Iceland, Russia and Spain, 
has prompted the UK to review its own interests in the 
Svalbard archipelago. 
 
The Diplomatic Note sets down formally the UK's view that the 
Svalbard archipelago, including Bear Island, generates its 
own maritime zones, separate from those generated by other 
Norwegian territory, in accordance with the United Nations 
Convention on the Law of the Sea. It follows therefore that 
there is a continental shelf and an exclusive economic zone 
which pertain to Svalbard. We believe that, if this issue 
were ever to be referred to the International Court of 
Justice, our position would find strong support in 
international law. 
 
The United Kingdom considers that maritime zones generated by 
Svalbard are subject to the provisions of the 1920 Treaty, in 
particular Article 3, which requires that Svalbard should be 
open on a footing of equality to all parties to the Treaty of 
Paris, and Article 8, which inter alia specifies the tax 
regime which applies to the exploitation of minerals in 
Svalbard. 
 
We are aware of the need to ensure that resources are managed 
in a sustainable manner. The UK Marine Fisheries Agency is 
working closely with its Norwegian counterpart to counter the 
problem of illegal catching and landings and we expect UK 
fishing boats to comply with the relevant Norwegian 
legislation in so far as it is in accordance with the 
Svalbard Treaty. 
 
The UK would welcome a more detailed dialogue with Norway and 
other key State Parties to the Treaty in order to move the 
issues forward and to focus on building a sustainable, long 
term international approach to the Svalbard archipelago that 
ensures the fragile ecosystem of the region is fully 
protected, while ensuring that the rights of State Parties 
are respected. 
End text. 
 
¶10.  (SBU) UK Embassy press points regarding their Diplomatic 
Note. 
 
Begin text. 
 
Svalbard Diplomatic Note:  statement to be given to media on 
if-asked basis: 
 
There is an ongoing dialogue on the High North (Barents / 
Arctic region) between the UK and Norway - this was initiated 
by Norway.  As part of that dialogue the UK reiterated in a 
Diplomatic Note its long-standing interpretation of the 1920 
Svalbard Treaty.  This is: that the Svalbard archipelago, 
including Bear Island, generates its own maritime zones, 
separate from those generated by other Norwegian territory, 
in accordance with the United Nations Convention on the Law 
of the Sea.  Second, the United Kingdom considers that 
maritime zones generated by Svalbard are subject to the 
provisions of the Svalbard Treaty, in particular Article 3, 
which requires that Svalbard should be open on a footing of 
equality to all parties to the Treaty, and Article 8, which 
inter alia specifies the tax regime which applies to the 
exploitation of minerals in Svalbard.  We have since 1977 
reserved our position on the Fisheries Protection Zone 
unilaterally declared by Norway in 1977.  We are aware of the 
need to ensure that resources are managed in a sustainable 
manner.  The UK Marine Fisheries Agency is working closely 
with its Norwegian counterpart to counter the problem of 
illegal catching and landings and we expect UK fishing boats 
to comply with the relevant Norwegian legislation in the 
Fisheries Protection Zone insofar as it is in accordance with 
the Svalbard Treaty. 
 
There was no protest, as some media reports have suggested 
today. 
 
We do not wish to get drawn into commenting on what each 
other say.  We look forward to continuing dialogue with 
Norway. 
 
End text. 
 
Visit Oslo's Classified website: 
http://www.state.sgov.gov/p/eur/oslo/index.cf m 
 
WHITNEY