Offshore Norway fears SV’s demands will create unpredictability for oil industry in revised national budget negotiations

In all budget proceedings since 2021, the Labor Party and the Center Party have allowed SV to create unpredictability for the oil and gas industry, Offshore Norway believes.

Now the industry organization fears that the same thing will happen again, behind the closed doors of the cabinet hall on the third floor of the Storting. It is precisely where SV meets the government parties these days for negotiations on a revised national budget.

– Now the governing parties must stand up for the oil and gas industry and say that enough is enough, says Torbjørn Giæver Eriksen, who is director of business policy and communications.

Offshore Norway believes it will be very unfortunate if SV wins with the following three demands:

• Remove particularly valuable and vulnerable areas from the so-called TFO rounds. These are mature and predefined parts of the Norwegian continental shelf, there the geology is known and the infrastructure well developed.
• Close the ice edge zone for oil operations
• Remove the exempt income in the oil tax package

Giæver Eriksen believes that predictable framework conditions have been one of the biggest on the Norwegian continental shelf competitive advantage. It is then important that good administrative practices are followed, he emphasizes.

– Here, SV is trying to take the update of the management plan in advance and change the definition of particularly valuable and vulnerable areassays Giæver Eriksen.

– Cut the process

Managing director Hildegunn T. Blindheim of Offshore Norway believes that it is untimely for framework conditions for the oil industry to be changed in the budget negotiations between SV and the governing parties. She believes this should be done in the work with the management plans, which are updated every four years, and which are based on updated research and new knowledge.

It is not until the spring of 2024 that the new management plan will be presented to the Storting, she insists. If SV were to get approval for changes in oil policy again, it would be to short-circuit this process, according to Offshore Norway.

– To bring this into budget negotiations now will be to cut the process and make decisions before the professional basis is in place. That would be completely wrong, says Blindheim.

– But do we know where the particularly vulnerable areas are?

– We know that in several of the areas that are now considered to be particularly vulnerable, there may be industrial activity. This is precisely what the professional forums are now working on, namely to bring out the knowledge so that one can find out where industrial activity must take account. But then we cannot advance the areas where there should be no industrial activity, she says.

Previous impact

Offshore Norway believes there is every reason to be concerned about the outcome of the negotiations on the revised budget, which are ongoing in the Storting.

The organization points out that as recently as last autumn, SV won with a demand to reduce the so-called free income and cancel the entire 26th round of concessions for the rest of this parliamentary term. This means that no new exploration licenses will be awarded until after the next election.

Also in the negotiations on the revised budget last year, there was a SV victory in the oil policy. The party then ensured that three of the 31 blocks in the so-called TFO area in last year’s concession round were withdrawn. Thus, there will be 28 blocks where oil exploration is opened. TFO stands for predefined areas.

SV described it as a provocation that the government recently extended the TFO allocations this year with a further 92 blocks on the Norwegian continental shelf.

– Dumbest and rudest

SV’s climate policy spokesperson Lars Haltbrekken hits back hard against Blindheim and Offshore Norway.

– It is one of the stupidest and rudest things I have heard in a very long time, says Haltbrekken.

– The ones who are trying to overthrow these processes are the oil companies who want to start drilling for oil in what the professional services say are vulnerable and valuable areas, says Haltbrekken.

– But shouldn’t SV wait until the management plan comes out before you make demands about which areas should not be searched for oil?

– Absolutely not. Now we know that there will be a proposal for a number of new vulnerable and valuable areas from environmental agencies. What the oil companies want is to start oil drilling as soon as possible – before it is defined, also by the Storting, as vulnerable and valuable areas. That would be a coup.

– You have to wait for the knowledge base, says Offshore Norway. Surely you can’t decide on your own which areas are vulnerable before the management plan is submitted?

– The knowledge base is here. The environmental agencies have come up with their proposals. Offshore Norway will pre-empt the management plan and start development, so that it is too late to stop it when the management plan arrives.

On 16 May, the professional forum and the so-called monitoring group delivered the professional basis to Climate and Environment Minister Espen Barth Eide (Ap). The ministry then submits the next management plan to the Storting for adoption in spring 2024.

– Offshore Norway believes SV has had a disproportionately large impact in previous budget negotiations?

– I agree that SV has achieved major and important breakthroughs in oil policy in recent years, and we will fight to ensure that we continue to achieve that. The environment is completely dependent on that, says Haltbrekken.