OSLO Norway's environmentally sensitive Lofoten archipelago will stay shut to oil exploration at least until elections next year, although a study shows drilling is unlikely to harm fisheries there, the oil minister said.
Oil companies, including Statoil, have been calling on the government to open new areas for petroleum exploration as mature fields in the North Sea become depleted.
"We should focus on the regions in the north that are already open for exploration, and have the existing industries learn to co-exist with the oil industry," Petroleum and Energy Minister Ola Borten Moe told a news conference on Friday.
He reiterated the government position that it would leave the decision on whether to explore Lofoten's waters to a future government as he presented a study commissioned by the ministry.
The Lofoten area is more attractive for the oil industry than the Barents Sea as it is close to the existing oil and gas transportation system.
The Norwegian Petroleum Directorate said in 2010 Lofoten and the surrounding areas could hold 1.3 billion barrels of oil equivalent in petroleum reserves.
The Nordic country is the world's eighth-biggest oil exporter and Europe's second-biggest piped gas supplier.
The general elections in September 2013 are likely to be a tight race between the current leadership and the conservative opposition.
The drilling in the Arctic waters of the Norwegian Sea have been the source of political controversy for years as environmentalists have resisted drilling to protect what they see as a highly vulnerable area.
Even the partners in the ruling coalition are not united on the issue.
The stretch of Norwegian Sea, roughly covering the coast between the cities of Tromsoe and Bodoe, is home to vast fishing resources.
The sea areas off Lofoten and Vesteraalen are the largest spawning sites for North Atlantic cod, Norwegian environmental group Bellona, which opposes the drilling in the area, said.
The minister said the study showed fisheries would not be hurt by petroleum activities, but added that Norway should not rush to open the area.
The head of the Norwegian Oil and Gas Association, an industry lobby, said it was disappointed at the government's hesitation to proceed.
"I am surprised over the minister's recommendations," said Gro Braekken, the head of the association.
"His assessment is that oil and gas activity outside Lofoten and Vesteraalen is safe, and hence it is wrong not to proceed to an (official) impact study right away."
(Additional reporting by Nerijus Adomaitis; Editing by Anthony Barker)