VZCZCXYZ0000
RR RUEHWEB

DE RUEHNY #0462/01 1001559
ZNR UUUUU ZZH
R 101559Z APR 06
FM AMEMBASSY OSLO
TO RUEHC/SECSTATE WASHDC 3774
INFO RUEHCP/AMEMBASSY COPENHAGEN 2054
RUEHHE/AMEMBASSY HELSINKI 7785
RUEHLO/AMEMBASSY LONDON 1336
RUEHMO/AMEMBASSY MOSCOW 3880
RUEHRK/AMEMBASSY REYKJAVIK 0678
RUEHSM/AMEMBASSY STOCKHOLM 2818
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC

UNCLAS OSLO 000462 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
STATE FOR EUR/NB RDALLAND, EB/ESC SGALLOGLY, 
RGARVERICK 
USDOC FOR 4212 MAC/EUR/OEURA 
USDOE FOR PI DPUMPHRY, ZHADDAD, LEKIMOFF; FE FOR 
EROSSI, JSLUTZ, GDEHORATIIS, JSWIFT 
NOT FOR INTERNET DISTRIBUTION 
 
E.O. 12958: N/A 
TAGS: PREL SENV EPET ENRG NO
SUBJECT: NORWAY LIMITS BARENTS DEVELOPMENT, FOR NOW 
 
¶1.  (SBU) SUMMARY.  The Barents Sea is home to one of 
Europe's most productive fisheries and some of the most 
significant offshore oil and gas reserves in the Arctic. 
With the March 31 announcement of its new Integrated 
Management Plan for the Barents region, the Norwegian 
government has settled, at least for now, the ongoing debate 
over how (or even if) the region's energy resources will be 
developed.  The plan, a compromise between pro- and 
anti-development factions within the government, will serve 
as the fundamental blueprint for Norway's High North 
development strategy.  It places a four-year hold on new 
petroleum development activity within 50 kilometers from the 
Norwegian coast and in areas close to permanent sea ice. 
During this four year hiatus Norway will study the geology 
and ecology of the coastal region, then revisit the 
development versus protection debate in 2010.  The limits on 
petroleum development were no surprise.  Though U.S. oil 
firms strongly favor opening to exploration some 
environmentally-sensitive areas the plan puts off limits, 
they are resigned to the near certainty that the governing 
center-left coalition will bar oil activity there for the 
remainder of its term.  The plan leaves it to the next 
government to make the hard choice on whether to open these 
potentially oil-rich waters, with their valuable fishing 
grounds and unspoiled scenery, to exploration.  The plan now 
goes to the Norwegian Parliament, which will review and act 
upon the recommendations this summer.  END SUMMARY 
 
LIMITS ON COASTAL ENERGY EXPLORATION, LOFOTEN AND BEAR ISLAND 
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¶2.  (U) Norway's new Integrated Management Plan for the 
Barents region limits energy development activities for the 
next four years in three areas: the Barents coast, the 
Lofoten peninsula, and Bear Island.  Along the Barents Sea 
coast, petroleum activity is barred in a 35-kilometer 
offshore zone extending from the Russian border south to Bodo 
-- essentially covering one-third of the north Norwegian 
coast.  The rationale for the 35 km zone is to allow 24 hours 
of drift time before any oil spill would hit the coast, 
giving authorities more time to respond.  From 35 to 50 km 
from the coast, no new petroleum activities are allowed 
except where concessions already have been granted. e.g. in 
the Goliat field (the second commercially-viable strike in 
the Barents after Snoehvit) and areas awarded in the 19th 
petroleum concession licensing round.  The 19th round 
licenses were announced at the same time as the management 
plan, and three of them fall partially within the 50 km zone. 
 (Note: Post will report septel on the 19th round.  END NOTE.) 
 
¶3.  (U) The plan bars nearly all petroleum activity in the 
sensitive fisheries and aviaries around the Lofoten 
peninsula.  In this area, no energy development is allowed in 
a zone extending 300 km from the coast between 67 to 69 
degrees north, encompassing the Nordland VI, Nordland VII and 
Troms II development areas.  Within Nordland VI, oil 
operations may continue in two blocks where licenses were 
previously awarded.  Seismic activity will be allowed in this 
area as well, but no impact assessments will be conducted in 
the zone.  In the Barents Sea, no energy development activity 
will be allowed in a 65 km zone around Bear Island or 
anywhere within 65 km of the edge of permanent sea ice. 
 
EXPANDED RESEARCH AND ENVIRONMENTAL MONITORING 
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¶4.  (SBU) The plan calls for stepped-up research on the 
geography and ecosystem in areas where petroleum activity is 
put on hold.  The Norwegian Petroleum Directorate will 
undertake broader mapping of the seabed in the area around 
Lofoten and will map the continental shelf north of Tromso. 
Results from these studies will be fed into the next 
iteration of the plan (due in 2010), when development goals 
will likely be revised based on scientific and geologic 
findings (and a new government will be in power). 
¶5.  (U) The nature reserve around Bear Island will be 
extended to the 12 nautical mile territorial sea limit.  To 
further protect the coastline from the potentially harmful 
effects of increased oil tanker and other sea traffic, Norway 
will seek International Maritime Organization (IMO) approval 
to establish defined sea lanes 30 nautical miles from the 
Norwegian coast.  Since Norway and Russia share Barents Sea 
resources, Russia's cooperation will be required to ensure 
sustainable fisheries management and environmentally sound 
energy development.  The Norwegians view the Management Plan 
as a starting point for their broader Barents 2020 Program, 
which seeks to forge closer cooperation with all countries 
(including Russia) that have interests in the Barents. 
 
COMMENT:  A COMPROMISE THAT THE RULING COALITION (AND OTHERS) 
CAN LIVE WITH 
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- - - - - - - - 
 
¶6.  (SBU) The Management Plan represents a compromise between 
those in the ruling coalition who understand that Norway must 
develop new oil and gas reserves to ensure its medium-term 
economic health and those who oppose oil activity in the 
Arctic at all costs.  In one sense, this is a false debate, 
as Norway's long years of producing petroleum offshore 
without a major environmental incident amply demonstrates 
that oil exploration and environmental protection are not 
mutually exclusive.  The industry must keep environmental 
considerations uppermost in mind, however, as any incident 
that damages fisheries or despoils scenic areas vital to the 
tourism industry could set back efforts to develop Barents 
energy resources for years. 
 
¶7.  (SBU) By delivering the plan on time, the Stoltenberg 
government showed that it is able to balance the competing 
political agendas that exist within its coalition to produce 
a consensus document.  Despite falling approval poll numbers 
and internal divisions, Stoltenberg demonstrated he has the 
political clout to force an agreement when it counts. 
Mindful of the economic stimulus energy development can 
bring, the pro-development Labor and Center parties can point 
to the plan to show remote northern communities that they 
care about creating jobs and spreading Norway's oil wealth. 
The anti-development and environmental forces in the 
Socialist Left Party can say they took a stand against 
developing the most sensitive areas of the coast, and won. 
The petroleum companies essentially got what they expected -- 
continued access to good acreage in the Norwegian and Barents 
Seas, which will keep them occupied until they take another 
run at opening up the potentially oil-rich waters in the 
Lofoten area in 2010.  Given the broad range of issues 
involved, no document could have pleased every constituency 
-- conservatives still say the plan places too many limits on 
development while the left says the restrictions are not 
strong enough -- but everyone can walk away with something. 
The plan will be reviewed in four years time and is sure to 
figure prominently in the 2010 elections. 
 
Visit Oslo's Classified website: 
http://www.state.sgov.gov/p/eur/oslo/index.cf m 
 
WEBSTER