Statoil rolls out huge new oil field

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NEWS ANALYSIS: The timing was ironic at best: Just as a new wave of climate concerns was literally washing over Norway this week, state oil company Statoil proudly promoted its huge new oil field Johan Sverdrup as the giant project heads for public hearing. Many argue that Norway’s oil and gas industry is a major contributor to the climate change that everyone is so worried about, but no one in power seems likely to turn off the pumps.

Norway's new Johan Sverdrup oil and gas field, located around 140 kilometers off Stavanger in the North Sea, represents a huge new source of wealth. Its environmental impact seems to be of secondary consideration. ILLUSTRATION: Statoil

Norway’s new Johan Sverdrup oil and gas field, located around 140 kilometers off Stavanger in the North Sea, represents a huge new source of wealth. Its environmental consequences remain an issue. ILLUSTRATION: Statoil

Last week’s flood waters had barely receded, or the cries abated over such likely climate-induced catastrophes, when news came that the Johan Sverdrup oil field is expected to generate a dizzying NOK 1,350 billion in new revenues to the state over the next 50 years. Statoil boasted that development of the promising oil and gas field just 140 kilometers west of Stavanger will generate around 51,000 jobs in its first phase alone.

And just as state meteorologists were releasing an admittedly scary mock weather forecast of what climate change will result in just 36 years from now, newspaper Dagens Næringsliv (DN) could report that Norway’s Oil & Energy Minister Tord Lien was claiming that the Johan Sverdrup field “will serve our grandchildren.” The contrast could hardly be greater to the quotes the same day coming from the leader of the environmentally oriented Liberal Party (Venstre), Trine Skei Grande, who watched the mock weather forecast in Parliament and repeated how climate change must be reversed “for the sake of our children and grandchildren.” Grande, however, seems more intent on raising fuel taxes and finding funding for alternative energy projects, than shutting down offshore oil rigs.

Norway’s dilemma rises again
The recent spate of oil and climate news, including release of the UN’s latest climate report that called on all nations to reduce their carbon emissions dramatically, clearly points up the dilemma Norway continues to face: It must balance its economic reliance on oil and gas production with its professed desire to also help halt climate change instead of adding to it, and that’s not easy. Norway is not among the world’s largest generators of carbon emissions but it does rank among the highest in carbon emissions on a per capita basis, because of its oil industry and small population. Politicians claim they feel a responsibility to seriously cut emissions at home, but the vast amount generated by Norway’s offshore oil platforms make it mighty hard to offset them even through the most draconian measures onshore. The only way to really cut Norway’s emissions is to let its oil and gas remain under the seabed.

And that, again, is unlikely to occur, simply because of the wealth they represent. At the same time, Statoil did its best to put a hugely positive spin on its plans for Johan Sverdrup, even billing it as an environmental project. That brought snorts of disgust from environmental organizations like Bellona: “No oil or gas project is good for the environment,” Bellona’s leader Fredric Hauge told Norwegian Broadcasting (NRK) on its national nightly newscast Monday.

Vigorous Statoil defense of ‘Johan Sverdrup’
Statoil was unrepentant. “Johan Sverdrup represents everything we stand for as an industry and our faith in the future,” claimed Arne Sigve Nylund, Statoil’s director of development and production on the Norwegian Continental Shelf. “This will be a gigantic project that will secure energy supplies, jobs and generate large ripple effects and value for Norwegian society, industry and the partnerships behind the development. This is a giant in our own backyard.”

Some media noted that Statoil's Arne Sigve Nylund promoted the oil field like a preacher at a revival meeting. PHOTO: Statoil

Some media noted that Statoil’s Arne Sigve Nylund promoted the oil field like a preacher at a revival meeting. PHOTO: Statoil

Newspaper DN, noting how Nylund seemed to take on the role of a preacher at a revival meeting when presenting more details about Johan Sverdrup, reported how oil companies in addition to Statoil are already competing over how ownership of the field shall be divvied up. They haven’t agreed on who will oversee development and operations. The field is spread over three different licenses with 10 oil companies holding uneven positions, and the oil reservoirs spread over the field seem to hold uneven amounts of resources as well.

All that must be sorted out as consequences of the project and how it will be powered go out to hearing. For now, Statoil and government officials seemed intent on celebrating what they see as a great new source of wealth for Norway, since Johan Sverdrup, discovered in 2010-2011 and formerly called the “Aldous Prospect,” represents the biggest discovery of oil and gas in Norwegian territory since the 1980s. Oil Minister Lien is eager to get the details of development plans on his table by February.

“These are the resources of the Norwegian people,” he declared. “That’s what we’ll be preoccupied with, that the Norwegian people get the biggest possible return on the resources that have been found.”

Meanwhile, one of his government colleagues was launching into state budget negotiations on Tuesday with other parties in parliament that are clamouring for more environmental-friendly programs and initiatives. Without their support, the minority government won’t get its budget passed in Parliament. The oil-versus-climate and environment dilemma rolls on, as Johan Sverdrup rolled out and flood victims in western Norway mopped up.

newsinenglish.no/Nina Berglund