Norway reviews offshore drilling costs

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OSLO, Norway, Aug. 17 (UPI) -- The Norwegian government said drilling rig costs on the country's continental shelf are higher than for other North Sea littoral states.

An Oslo report stated that drilling on the Norwegian continental shelf is 40 percent higher than for the United Kingdom.

Gro Braekken, director general of the Norwegian Oil Industry Association, said the report serves as a warning to the country's energy sector.

"These conditions have been known for a long time and studied by several earlier inquiries," she said in a statement. "If we're going to make progress, it's important that the measures identified by this report are taken seriously and implemented."

The report said one of the main reasons for the discrepancy was because of costs associated with modifications needed for rigs moving into Norwegian waters to meet government regulations.

"Increasing rig availability at lower cost is crucial for getting the maximum out of the petroleum resources on the NCS," said Braekken. "We're talking about billions of kroner in value creation."

A July labor strike in Norway halted about 15 percent of the oil production on the country's continental shelf.