Norway plays down minister's oil cut comments

OSLO (Reuters) - Norway's finance ministry played down comments by Finance Minister Kristen Halvorsen in a Norwegian newspaper on Tuesday signaling that Norway's oil production may be cut for environmental reasons.

Top-selling tabloid VG quoted Halvorsen as saying that if new environmental taxes were put on oil production it could reduce the value of Norway's oil deposits, possibly to zero.

"One can imagine a situation in the future where oil, in the worst case, is prohibited and valued at zero," VG quoted Halvorsen as saying from Bali, Indonesia, where she is attending a U.N. conference on counteracting climate change.

Finance Ministry spokesman Runar Malkenes told Reuters that Halverson had been misquoted by VG.

"She has never said that oil should be forbidden," Malkenes said, but was not able to comment immediately on other quotes attributed to Halvorson in the VG article.

With political and regulatory stability unseen in much of the oil-rich world, Norway is the world's fifth-largest oil exporter, pumping roughly 2.4 million barrels per day. It is also western Europe's top exporter of natural gas.

VG said Halvorsen would like to discuss lowering oil and gas exploration offshore Norway if the centre-left government retains power in elections slated for late 2009.

Halvorsen is also leader of the Socialist Left (SV) party, which has been losing supporters to the more moderate Labor party of Prime Minister Jens Stoltenberg.

"We will have to make new forecasts for how much our oil and gas resources are worth with a new climate treaty because this will have impact on the Norwegian economy," Halverson told VG.

"If a (new) tax is put on oil, the oil will become worth less compared to, for instance, energy from renewable sources. The same will happen if the (carbon emissions) quota regime is tightened," she said.

VG quoted an excerpt from a Halvorsen speech in Bali as saying: "We feel that it is in our clear interest to battle climate change, even if this can have consequences for our income from oil exports."

When asked about this comment, she told VG: "As a nation we are more dependent on succeeding with stopping global climate change than succeeding by pumping up all the oil."

"It's very short-sighted as an oil nation to believe that one is an island in the world, while sea levels are rising due to climate change. You cannot disengage from the world."

(Reporting by Wojciech Moskwa and Terje Solsvik; editing by James Jukwey)