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Russia and Norway have agreed a deal to divide up their shares of the Barents
Sea.
The deal follows decades of negotiations between the two sides over how to
divide the region.
The accord will allow companies to explore for oil and gas in the 68,000 square
mile area.
The agreement has been approved by the two countries' parliaments and will be
implemented on 7 July this year.
Russian Foreign Minister Sergey Lavrov and his Norwegian counterpart Jona Gahr
Stoere ratified the deal during a ceremony in Oslo on Tuesday.
It splits the disputed part of the Barents Sea into two equally sized areas.
The region has become more accessible recently as global warming has caused the
ice to melt.
Start Quote
There is always a tendency to talk these things up
End Quote Julian Lee Centre for Global Energy Studies
Analysts say the melting ice could open up new, shorter, shipping routes
between Russia and Norway and Asia.
Oil and gas reserves
State oil companies from both countries have expressed an interest in
exploiting reserves in the region.
Russian owned Gazprom is already working with Norway's Statoil on the Shtokman
field, 310 miles off the Russian coast.
"The potential economic benefits are enormous," said James Nixey, manager and
research fellow for the Russia and Eurasia Programme from Chatham House on a
visit to Norway.
"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.
It will allow significant exploration of the region for the first time.
The US Geological Survey estimated in 2008 that the Arctic was likely to hold
30% of the world's recoverable, but yet to be discovered, gas and 13% of its
oil.
"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.
However, with so much of the Arctic unexplored the estimates are unreliable.
"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
added.