Russia, Norway sign border deal for Arctic energy

Russia and Norway ended a 40-year dispute in signing an Arctic border treaty on Wednesday which opens the door to offshore oil and gas exploration.
President Dmitry Medvedev and Norway's Prime Minister Jens Stoltenberg presided over the signing in Murmansk, a Barents Sea port city near the Norwegian border north of the Arctic Circle.
The disputed territory covered 175,000 square km, an area about half the size of Germany, mainly in the Barents Sea between proven petroleum reserves on the Russian and Norwegian sides.
"It took us 40 years to get to this treaty," said Medvedev, who struck a preliminary deal with Stoltenberg back in April. The Russian president said the deal would open up new opportunities for oil and gas exploration and fishing.
Any oil and gas fields straddling the border would have to be developed jointly, according to a statement issued by the Kremlin.
Canada, Russia, Norway, the United States and Denmark — the only nations with Arctic coastlines — are racing to file territorial claims over oil, gas and precious metal reserves that could become more accessible as the Arctic ice cap shrinks.
International law states that the five have a 320 km economic zone north of their borders, but Russia is claiming a larger slice based on its contention that the seabed under the Arctic is a continuation of its continental shelf.
Chris Weafer, chief economist at Moscow investment bank Uralsib, said ending the dispute was part of a broader Russian push to win diplomatic points and attract investment by projecting itself as a fair player on the international stage.
Moscow is "keen to project this new softer and pragmatic approach as it looks to improve Russia's image and investment credentials internationally," Weafer said in a note to investors.
He also said the move made it more likely that Norway would back Russia's Arctic claim.
Much of the disputed zone is located between Gazprom's huge Shtokman field on the Russian side, a reservoir holding enough gas to meet the world's entire consumption for a year, and two oil and gas fields off the Norwegian coast in which Norway's Statoil has stakes.
Communist-era scans of the long-disputed zone reportedly indicate that oil and gas deposits are generally bigger and more numerous in the eastern Barents Sea, which belongs to Russia.
Norway's oil production is declining as its core North Sea oil fields are gradually depleted. No major fields have been found off Norway since the late 1990s.