Norway is blocking the sale of the last piece of private property in an embattled Arctic archipelago dominated by Russian settlements

The quiet archipelago of Svalbard has ice-capped mountains and rows of little homes as far as the eye can see. It is also at the center of geopolitical tensions between Norway and Russia. 

The Søre Fagerfjord property, the last known private property in Svalbard, located southwest of Norway near the North Pole, was put on the market in May for €300 million ($326 million). 

However, Oslo’s government is blocking its sale as Svalbard draws interest from Russia and China because of its strategic location in the Arctic Circle.   

“The owners of Søre Fagerfjord have said for a long time that they want to sell the property,” Norway’s trade and industry minister Cecilie Myrseth said in a statement on Monday. Talks of the property’s sale go back to 2018, according to Agence France-Presse. 

The property itself has “no value” as it is, which raises questions about potential buyers willing to pay astronomical sums to buy it, Myrseth said, explaining the pushback. Søre Fagerfjord is located in an area subject to strict restrictions, including bans on cars or other motor vehicles, building constructions and oil drilling. 

“It must be assumed that it is because they imagine that it is possible to challenge Norwegian legislation and protection in a way that could disturb the stability of the area and potentially harm national security interests,” she added. 

Last week, the ministry made a fresh offer worth 20 million kroner ($1.9 million), a fraction of the original asking price compared to the previous property sale of €33.5 million ($36 million today), the AFP reported.     

The property’s sale will require state consent. 

Norwegian media reported that a Russian-born Norwegian woman is the primary owner of AS Kulspids, the group that controls Søre Fagerfjord. The country’s intelligence services have flagged national security concerns over the possible sale of property in such regions, given the number of Russian settlements already operating in the area.

View of Longyearbyen, the northern-most settlement in the world located in Svalbard.


Svalbard’s unique case

Although Svalbard is in Norwegian territory, and its government controls 99.5% of its land, there’s a sizable Russian presence in the archipelago, thanks to a treaty dating back to 1920 that allows its signatories—including Russia and China—to exploit natural resources in the region. 

Søre Fagerfjord was put up for sale at a time when Russia and China have been increasing their activity in the “high north,” given its vast natural resources and political importance. The Arctic region’s importance continues to grow amid the political standoff between much of the Western world and Russia, which has more military bases in the region than even NATO. 

China declared itself a “near-Arctic” state to gain a foothold in the area and has invested billions into energy projects in recent years.   

Experts have predicted that the Arctic could be a source of power conflicts as countries close in on the hard-to-access region that offers untapped commercial opportunities and access to natural resources. 

Svalbard is critical to the simmering Arctic politics as its location allows access to and from Russia’s Northern Fleet, where its nuclear submarines are present, the Center for Strategic and International Studies said in a September report. As climate change results in ice caps melting, the water around Svalbard will also become easier to navigate. 

These challenges give Norway even more reason to protect Svalbard’s sovereignty—and Søre Fagerfjord is just one part of it.

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