a) There are two reasons for this: (a) an estimated oil price of more than $80/barrel is required to make
the projects profitable in this challenging region. It is therefore possible that Equinor could experience
significant financial losses in the Barents Sea, especially if the fields need to be electrified.
b) If a major accident or oil or gas leakage should happen in this fragile and hostile region, the reputational,
environmental and financial consequences for Equinor would be enormous. As stated by the WWF,
the highly biodiverse Barents Sea is “one of Europe’s last large clean and relatively undisturbed marine
ecosystems”. A resent national poll shows that a majority of the Norwegian population wants to reduce
oil and gas exploration and production. So, production in the Barents Sea goes against majority of the
population’s opinion.
There have been intense debates in Norway on how far north in the Barents Sea the Norwegian
Government should open for exploration and production of oil and gas. The winter artic ice edge in the
Barents Sea fluctuates from year to year. Scientists have determined that in the edge between ice and
open sea there exists a very active, but fragile biodiversity that must be protected. Oil and gas exploration
in this region and further into the artic winter ice is considered exceedingly expensive and associated
with high environmental risks. When the Norwegian Parliament approved the first permits in this region
back in 2015, production cost estimates by the Ministry of Petroleum and Energy were not disclosed
to the Parliament, but later became known, creating a political scandal. These cost estimates showed
that an average oil price of $84/barrel is required to make projects in this region profitable. In addition,
electrification of these offshore production units, needed to meet Norway’s CO2 emission reduction
commitments by 2030, will be very expensive and needs to be included in the cost of the oil and gas
production. The electrification of the production rigs should be paid by the oil companies and not by the
Norwegian State, as the oil companies expect. Further, governmental reports have pointed out that the
emergency response capacity for this region is totally insufficient.
The Government has issued 147 oil and gas exploration and production permits to companies in this fragile
region. According to government records, Equinor has currently 7 production permits and 29 exploration
permits (with partners) in the Barents Sea. Electrification of the 7 platforms would require more than
600 MW (Ref. Rystad study) of added capacity from Finnmark, supplied from added onshore wind power,
expansion of the Norwegian north-south grid capacity and power importation from Sweden and Finland.
Therefore, there is strong reason to believe that the additional cost of electrification will make future
production of oil and gas in the Barents Sea even more unprofitable.
We are, therefore, of the opinion that Equinor should refrain from further exploration activities in the
Barents Sea. Equinor has currently approximately 10 years of proven and estimated oil and gas reserves in
the ice-free Norwegian Continental Shelf south of the Barents Sea.