Norway moves Arctic ice edge north, oil firms on alert

OSLO (Reuters) - Norway's government invited firms to drill for oil and gas further inside the Arctic Circle on Tuesday, putting it at loggerheads with opposition parties as it seeks to open up new fields at a time of declining output.

Under a redefinition of risks of sea ice between 1984-2013 against a more southerly 1967-89 benchmark, the industry would gain access to acreage 60 to 70 kilometers (40-45 miles) north of already accessible areas.

"When the ice has moved, and satellites show it has moved further north, then we have to take care of nature in this area. What we are doing will ensure that," Prime Minister Erna Solberg told NRK public radio on Tuesday.

The proposal, which the minority government may struggle to get through parliament, is symptomatic of a gradual broader northwards move by oil-producing nations with access to Arctic waters as existing wells start to run dry.

Norway's has been more active in the Arctic than other nations, with its energy firms, led by Statoil, having started drilling there decades ago as its waters, warmed by the Gulf Stream, are relatively ice free.

Arctic ice has shrunk significantly over the same period, in a trend scientists link to climate change.

Two small opposition parties - the Liberals and Christian Democrats - which have helped pass legislation since a deal in 2012 including that oil and gas exploration would not take place near ice, said they did not support the plan.

They fear risks of oil spills, which are harder to clear up when mixed into ice.

"We don't agree with the new definition," Ola Elvestuen, of the Liberal Party and head of parliament's energy and environment committee, told Reuters.

The new area would cover the eastern part of the Barents Sea, where Norway settled a 40-year border dispute with Russia in 2010 and which has been free of ice since 2004.

The government launched a licensing round there on Tuesday, mindful of warnings from the oil directorate that the industry will shrink this year and may decline faster thereafter unless crude prices recover.

The Norwegian Polar Institute, which said last year some blocks in the area should be off limits, supported the government's overall evaluation, its head Jan-Gunnar Winther said.

Truls Gulowsen of Greenpeace urged Oslo to take the maximum extent of ice as a guide, but said the debate about staying clear of ice set a good example for other Arctic states.

(Additional reporting by Balazs Koranyi; Editing by David Holmes and John Stonestreet)

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