The Barents Sea Conflict: Russia and Norway Competing Over Fossil Fuel Riches in the Arctic

The Barents Sea Conflict: Who Gets the Hydrocarbon Reserves?

'The revolution of European modernity meant, above all, abolishing limits - ... Boundaries were transformed into movable frontiers, continually shifted forward.' (Schiavone, 2000)

'Precision in boundary delimitation, therefore, did not presume either rigidity or lack of ambiguity. Indeed, borders became zones of ambiguity despite the urge to define national-state boundaries precisely.' (Agnew, 2001)

What has become known as the Barents Sea conflict describes a dispute between Norway and Russia, officially started in 1974 over the delimitation of arctic sea boundaries in the Barents Sea. The disputed area spans 175,000 square kilometers and contains major fishing grounds as well as an estimated 30% of the World's Oil and Gas Resources - hydrocarbon reserves (Moe et. al., 2011).

Figure 1 clearly shows the concentration of hydrocarbon reserves in the Barents Sea, the absence of any gas or oil production in the area and the bordering nations of Russia and Norway, underlining their territorial claims.

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Past research has focused almost exclusively on negotiations of agreements regulating the fishing aspect in the disputed area. The hydrocarbon reserves have been ignored until now since the required technology for extraction of resources was either unavailable or the cost of extraction could not be justified in relation to the benefits obtained. However, with the recent sea-ice loss in the arctic, due to global warming, the Barents Sea has become subject of interest to maritime transport and mounting international pressure for explorational drilling to access petroleum deposits to take place. The conflict is historically characterised by both nations continuously presenting claims on the seabed, none of which are officially acknowledged or legally justified. The first known claims were presented by Norway in 1963 after which Russia followed suit in 1965. The Barents Sea conflict officially came to an end on 7th June 2011, the date on which the Barents Sea Treaty, signed on 15th September 2010, came into action.

Background Factors

Objectives. The International Energy Agency notes in its 'Oil & Gas - Security' report for Norway 2011 that 'Norwegian Continental Shelf oil production has been decreasing' since 2002. Production as of 2010 only accounted for 65% of the production in 2000 and 'is expected to have peaked' (IEA, 2011). The report outlines priorities for Norwegian authorities such as the need to 'allow for new upstream exploration in both Norwegian and Russian waters', since the Barents Sea treaty is now in place.

For Norway, who is in fact the 6th largest exporter of Oil in the world (CIA, 2012), the continuous access to hydrocarbon reserves is vital for economic survival. As such it appears that Norway's objectives in this negotiation are purely down to resource access.

Russia's motivations appear fairly similar; its nation has a growing demand for oil and petroleum products. Contrary to Norway, Russia is not a net exporter due to its low quality petroleum products, which are unable to compete in the European market.

Austvik (2007) points to one motivation which is often overlooked by academic researchers. Increasing commercial activity in the Barents Sea region, due to commercial shipping and oil exploration, would make it easier for Russian submarines to pass unnoticed in and out of the Barents Sea. Hence a conclusion of the conflict may benefit Russia in military terms. Traynor (2008a) states that first and foremost both nations' main objective is the 'access to, and control over, energy resources.' But can this conflict be down to purely resource related objectives? Kehl (2010) argues that 'many confounding factors influence the relationship between natural resources and conflict… scarcity alone is too simplistic an explanation.' Kehl points to observations by Collier and Hoeffler (2005) and Klare (2001), the former stating that 'economic grievances and primary commodity dependence' can be key to conflict, whereas the latter argues that 'unresolved territorial disputes and secessionist movements' are the primary cause. Austvik (2007) notes that for both countries access to petroleum resources involves security political dimensions.

We have to conclude that it is a mixture of ensuring economic stability and growth for their respective nations as well as political and economic bargaining power obtained by controlling resources, which motivates this negotiation. Hence a classical geopolitical negotiation issue.

Environment. The environment engulfing the negotiations has been changing drastically during the 40 year period in which the negotiations have been held. Other than changes in political motivations, the economic and social environment has experienced major changes. Meyer (2012) points to the rapidly increasing demand for oil in the 'BICS' countries (Brazil, India, China and Saudi Arabia) due to changes in consumption patterns and increasing industrialisation. He points to production interruption in the Middle East due to social unrest, and oil embargoes in countries such as Libya. All of this may reduce oil exports of the 'BICS' countries and hence 'Security-of-Supply' pressures are high up on European political agendas, which exerts pressure on net exporters to better serve the European market. Austvik (2007) lists a number of environmental factors influencing the ability and willingness to extract oil from the Barents Sea, namely 'international energy prices and policies, bilateral relations between Norway and Russia, as well as multilateral relations between these countries and the major powers in the world.'

Third Parties / Coalitions. Third parties have become increasingly involved as this conflict developed, with the EU requesting 'observer' status on the Arctic council in 2007 and 27 EU prime ministers and presidents ordering Russia to take follow-up action regarding the Barents Sea following an Arctic policy summit in 2006 (Traynor, 2008b).

The European interest in resolving this conflict is unparalleled. Obviously the EU is looking after its own countries' interests, and although Norway is not a member of the EU it is still part of the EEA and the EFTA. Europe is the main customer of Norway's oil, and the recent decline in Norwegian production capacity has prompted the EU to side with Norway in the Barents Sea conflict to increase future production levels. Countries such as Germany and the UK, being the largest buyers of Norwegian oil and hence strategically vulnerable to a further loss of Norway's energy production capacity have gone to the extent of offering military assistance to Norway (Austvik, 2007). This 'coalition' between Norway and the EU has put Russia into a difficult position and has arguably had significant effects on the power balance in this negotiation.

Additionally, the presence and influence of NGOs and environmental pressure groups, has been mounting in recent years, demanding a structured cooperation agreement between the two parties and the international community to oversee and regulate industrial activity in the Arctic.Continued on Next Page »

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