Russia and Norway agreed on the course of their Arctic maritime border today, after four decades of talks, paving the way for the disputed area to be opened for oil and gas exploration.
Until now, Europe's two top energy suppliers have not been able to tap into a remote and inhospitable region of the Barents Sea that lies between other proven oil and gas deposits.
In a surprise announcement, visiting Russian President Dmitry Medvedev said the Arctic neighbours had agreed to "close the question" of the demarcation of their sea border off Europe's northern tip, and were preparing final documents.
"I hope more projects in the energy sphere will arise ... This would be quite a practical result," Medvedev told a joint news conference with Norwegian Prime Minister Jens Stoltenberg.
Stoltenberg said: "This is a historic day. We have reached a breakthrough in the most important outstanding issue between Norway and the Russian Federation."
The preliminary deal envisages splitting roughly in half an area of the Barents Sea and Arctic Ocean covering some 175,000 sq km (68,000 square miles). A final accord is due later this year, Stoltenberg said.
Much of the disputed zone is located between Gazprom's huge Shtokman gas discovery on the Russian side, a reservoir that alone holds enough gas to meet the world's entire consumption for a year, and two oil and gas fields off Norway in which Norway's Statoil has stakes.
The two countries also agreed to boost cooperation on fisheries and on management of oil and gas resources.
"The two delegations recommend the adoption of detailed rules and procedures ensuring efficient and responsible management of their hydrocarbon resources in cases where any single oil or gas deposits should extend across the delimitation line," the Norwegian government said in a statement.
EXPLORATION FAST-TRACK?
Norwegian Oil Minister Terje Riis-Johansen said the deal would make it possible to map out the region's resources and enable oil and gas activities in the new Norwegian sector.
"This means that we can define parts of this area as our own, we can search the sea bottom and map out the resources, and we can foresee activities in this area that we could not do before," he told the state broadcaster NRK.
The Norwegian oil industry lobby group OLF said exploration could start in 2012 or 2013.
Norway's oil production is declining as its core North Sea oilfields are gradually depleted. No major fields have been found off Norway since the late 1990s.
"It's obviously very positive that this has now been agreed and that the jurisdiction now seems to have been resolved," said Statoil spokesman Ola Morten Aanestad.
"To the degree that this gives us a chance to search for oil and gas in the area, we'd obviously be very interested in that."
The Barents Sea dispute is part of a wider global debate about territorial claims in the Arctic, a region increasingly accessible to industry due to global warming and new technology.