Norway Won't Ask Statoil To Ditch Oil Sands

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Statoil, Norway's largest oil company, will not face the specter of having to abandon projects in the oil sands region of Western Canada after Norway's government said it will not ask the company to do so. The Norwegian is state is Statoil's majority owner, controlling two thirds of the firm.

Statoil (STO) has come under heavy scrutiny at home for its oil sands exposure. While Norway is a major non-OPEC oil producer, its citizens are known for being environmentally friendly and the environmental impact of extracting crude in the oil sands has been one of the primary hurdles companies have had to deal with in the oil sands.

Faced with declining production at aging North Sea fields, Statoil is looking to tap other resources to at least steady its crude output. As such, the company has become a major operator in the oil sands region.

Environmental groups Greenpeace and the World Wide Fund For Nature (WWF) have for several years campaigned for Statoil to pull out of its Kai Koh Dehseh project in Alberta since the company purchased the project in 2007, according to Reuters. Canada's oil sands are the second-largest oil reserves in the world behind Saudi Arabia.