1920 treaty holds key to Arctic energy riches

LONGYEARBYEN, Norway, July 3: The earls, dukes and ambassadors representing World War One victors in Paris in 1920 believed they had solved a diplomatic headache when they signed a treaty giving Norway a remote group of Arctic islands.

That headache has now turned into a migraine.

Interpretation of the Svalbard treaty, which gave an Arctic archipelago the size of Ireland to Norway but gave others equal access to its resources, will decide future energy and fishing rights in the lucrative north Barents Sea.

The area holds the world's best stocks of cod, worth billions of dollars, and geologists say it could contain massive energy supplies comparable with the southern sector of the sea.

The two sectors could hold a combined total of up to 6.3 billion barrels of undiscovered oil equivalent, almost as much as Azerbaijan's total reserves.

Norway already has its own treaty interpretation: the rights are theirs.

''Norway's view is that a shelf goes from Norway up north and Svalbard is part of that shelf,'' Norwegian Prime Minister Jens Stoltenberg told a news conference in Svalbard's largest town, Longyearbyen, in June.

It's not the geology other nations dispute, it's the ownership.

Norway says the treaty's provision that all have equal rights to Svalbard's resources stops at the territorial boundary 19 km off the coast and does not apply to the sea and continental shelf up to 320 km offshore which by maritime law also belongs to the islands.

Others say the same conditions apply.

DIPLOMATIC LETTER

Britain made the point by writing a rare diplomatic letter to Norway's government this year, saying it would protect its interests, Russia has continually protested against Norway's claims and even Iceland, a Nordic ally, has clashed with Norway over fishing rights.

''The only problem with the treaty is that it does not talk about the open sea and the continental sea shelf,'' said Geir Ulfstein, a law professor at the University of Oslo and a respected expert on the Svalbard Treaty.

Norway and Russia already dispute rights to an area of the Barents Sea the size of the North Sea between their two east/west sectors.

At the end of next year Norway plans to open a gas field in the southern Barents Sea which will ship supplies to the United States, and Russia is drawing up plans to develop its Barents Sea Shtokman field which will be one of the biggest in the world. Global warming, widely blamed on human burning of fossil fuels, is partly driving interest in the Arctic by thawing formerly inaccessible regions.

Svalbard was an Arctic no-man's land, 1,000 km from the North Pole which for centuries attracted whalers and hunters from across Europe, Russia and North America. But by 1920 semi-permanent coal mines had opened up and there needed to be a recognised authority.

In Paris the powers of the era chose Norway -- then a poor, sparsely populated, rural country -- as Svalbard's sovereign power, but they spliced the treaty with caveats to allow them access to the coal reserves.

RICH AND RURAL

The development of North Sea oil in the 1970s transformed Norway from a poor rural nation, to very wealthy rural nation and it is now the world's third largest oil exporter and Western Europe's largest gas exporter.

Like its neighbour Russia, Norway is an energy superpower.

And Norway wants the sole rights to the northern sector of the Barents Sea to give its energy companies and fishermen preferential treatment, Ulfstein said.

"From the mid-1970s Norway decided to try and get a firmer grip on Svalbard," he said.

In 1977, it unilaterally sent its navy to patrol the sea to prevent overfishing, and this year it has quickened the pace further.

Norway's government faced down environmentalists and allowed oil exploration in the southern Barents Sea earlier this year, it has written a policy paper on extending its influence in the northern regions and plans to map the unknown sea shelf -- an act that one senior foreign office official told Reuters would be like planting a flag and claiming it.

Lawyers, experts and diplomats agree north Barents Sea oil and fishing rights are developing into a diplomatic flashpoint. They also agree that there is no clear answer.

REUTERS