OSLO, 5 April 2005 — Norway and Britain signed a treaty in Oslo yesterday to develop oil fields that straddle their North Sea boundary in hopes of eventually boosting supplies to help meet world thirst for oil.

Demand has pushed oil prices to record levels, prompting Norwegian Oil Minister Thorhild Widvey to say she now worries that the cost could be harmful to the world economy. “We are concerned that prices go too high,” Widvey said at the treaty signing. “I hope the price will go down a little.”

The new treaty, which was finalized in February, was signed by Widvey and British Energy Minister Mike O’Brien in hopes of producing more oil, especially from smaller fields in the border zone. Neither Norway nor Britain are members of the Organization of Petroleum Exporting Countries, but O’Brien said he and others were talking with the organization about what to do about oil prices.

Norway, the world’s third largest oil exporter after Saudi Arabia and Russia, is already producing at full capacity and expects its oil production to decline as major fields age. It has been stressing development of smaller fields as a way to maintain capacity, currently about 3.2 million barrels of oil per day.

Britain also produces oil and natural gas from offshore fields. Some fields already in production, such as Statfjord, Frigg and Murchison, and others that could be developed are beneath waters claimed by both nations.

The new framework treaty includes projects not already outlined in other agreements, and cover such things as building joint oil and natural gas pipelines, jointly developing median-line fields and using infrastructure on one side of the border to develop resources in the other country’s waters.

Widvey said she and O’Brien expect to approve two joint cross-border projects, the smaller Enoch and Blane fields, within the next few months. “This is encouraging since both fields have remained undeveloped for years. Now, the treaty has facilitated these projects,” she said.

The countries also hope the treaty will stimulate other small field developments, potentially increasing future supplies, although the projects could still take years to complete. Many of those fields are in the border areas between the countries, and experts earlier told Dow Jones Newswires that the treaty could unlock roughly $3.75 billion worth of future production.