Norwegian court annuls several North Sea oil and gas production permits

The Norwegian government is considering appealing a court ruling that annulled several permits for oil and gas production in the North Sea following a challenge by environmental groups. The country’s energy ministry said, however, that the ruling has no immediate impact on activities already under way. Norway is currently the largest supplier of natural gas to the European market, and any supply constraints, including even the prospect of them, could fuel price rises.

The Oslo District Court ruled last week that permits for the development of three oil and gas fields were invalid. These include the Breidablikk oil field, which has been operated by state-controlled Equinor since October last year. The ruling also covers the Tyrving and Yggdrasil projects, which are being developed by Aker BP, Norway’s second-largest oil and gas producer.

According to S&P Global, the case mainly concerned emissions associated with the consumption of oil and natural gas extracted from the fields, which the court said had not been specifically assessed. The ministry argued, however, that under Norwegian and European law it is not required to assess individual fields, but must consider the overall impact of the sector. The lawsuit challenging the permits was filed by the environmental groups Greenpeace and Nature and Youth.

“We disagree with the ruling and the decision on interim measures. The decision ... has no immediate impact on any activity under way. I would like to stress that this is not a legally binding decision and that it is too early to say what consequences the outcome of the final decision may have,” said Astrid Bergmålová, deputy minister at the Norwegian Ministry of Energy.

An Aker BP spokesperson said the company was not a party to the proceedings and described the ruling as “unenforceable”. Aker BP will therefore continue developing the projects in question in accordance with the permits granted, the spokesperson said.

The court ruling comes as Shell prepares to appeal a 2021 ruling by a Dutch court, according to S&P Global. The court ordered the company to accelerate its emissions cuts, reducing its emissions by nearly half by 2030. S&P Global reported that the court said Shell was required to consider not only its own emissions, but also those of its suppliers and customers.

Norway plans to expand production into Arctic areas

The Norwegian court’s ruling could also complicate the country’s plans to open new gas fields. Last week, the Norwegian government awarded a record number of licences for new drilling in the past five years, including in Arctic areas. While companies previously focused mainly on oil production in the Arctic, they are now also turning their attention more strongly to gas.