Norway and Russia have agreed on a historic deal that will see the two nations divide up their portions of the Barents Sea. The pact follows decades of debate about how the 68,000 square-mile Arctic region should be carved up.
The parliaments of both countries signed off on the agreement on Tuesday. It will come into force on 7th July, allowing fresh deals with oil and gas companies in both nations, which are keen to explore the relatively untapped area.
“The potential economic benefits are enormous,” said James Nixey, manager and researcher for the Russia and Eurasia Programme from Chatham House. “The significance of the deal is that it is widely recognised that the Arctic is a scene of future commerce and possibly future conflict,” he added in a BBC report.
In 2008, the US Geological Survey concluded that 13 percent of the world’s recoverable, yet still un-found, oil and 30 percent of its gas could be in the Arctic.
“The expectation is that it has the potential to hold significant volumes of oil and gas because the area to the east of it has proven to be gas prone and the area to the west of it has proven to be gas prone,” said Julian Lee, a senior energy analyst at the Centre for Global Energy Studies.
He cautioned, however, that with so much of the Arctic still to be explored, it is possible that the estimates are wrong. “There is always a tendency to talk these things up because that is how you attract investment, but it’s probably far too early to say there are significant volumes of anything there until somebody looks for it,” Mr Lee told the BBC.
The region, which has become much more accessible in recent years due to ice melt caused by global warming, has been split into two equally-sized areas. It is believed that shipping companies running goods between Asia, Norway and Russia will benefit from the shorter routes that are opening up due to the melt.