Norway parliament orders restart to frontier oil and gas exploration licensing

OSLO (Reuters) -The Norwegian parliament on Tuesday ordered the Labour minority government to launch a new frontier areas oil and gas exploration licensing round, setting the stage for increased oil drilling.

Norway became Europe's largest supplier of natural gas following Russia's invasion of Ukraine in 2022, providing about 30% of all gas imports to the European Union.

The motion which was initially tabled by the opposition Conservatives, garnered majority support after it was backed by the opposition Centre Party, which quit the government in January.

The original proposal calling the government to launch a new licensing round in the first-half of this year was amended at the Centre Party's request to postpone it until the next year.

The Labour government, however, could start preparations for the launch this year.

The two former partners agreed in 2022 to postpone frontier area licensing rounds until the end of this year in exchange for a smaller opposition Socialist Left party backing a budget.

While Norway stopped awarding ocean blocks for oil and gas drilling in frontier areas, such as in the eastern part of the Barents Sea, it continued to conduct annual licensing rounds in more mature areas.

Last year, Norway exported a record amount of natural gas to Europe and volumes are expected to stay near this level in the coming years.

The output, however, is expected to fall sharply after 2030. Finding and developing more resources could slow down the expected decline.

The Conservatives said more exploration was needed for Norway to remain a stable energy supplier to Europe for a long time.

"If the European Union is to succeed in becoming more independent of Russian gas, Norway should continue to contribute," they said in the draft proposal.

(Reporting by Nerijus Adomaitis, editing by Terje Solsvik and Marguerita Choy)