Norway has the experience to lead developments offshore, but tapping into frontier territory in arctic waters carries heavy risks, the director of the IEA said.

Maria van der Hoeven, executive director of the International Energy Agency, spoke to delegates at the Barents Sea Conference in Hammerfest, Norway. Her address coincided with the start of a new Norwegian licensing round for energy companies looking to tap into the Norwegian waters of the North, Norwegian and Barents seas.

The arctic waters of the Barents Sea hold significant oil and gas reserves, but exploiting those reserves comes with significant risk. While Norway has one of the most advanced offshore drilling programs in the world, van der Hoeven said concerns run the gamut from ecological to economic risks.

"And overarching all of these challenges is the fundamental question of whether or not such resources need to be exploited at all, given the global energy transition that is seeing a call for reduction in the use of fossil fuels and a move to low-carbon economy," she said.

The Norwegian government drew record interest to offshore territory when it handed out 54 licenses for operations in the North, Norwegian and Barents seas during the latest auction in January. Norwegian Energy Minister Tord Lien said Tuesday newly available territory means new potential for the country.

"This is good resource management, and will be important for the activity-level and the value-creation, especially in the northern region," he said.

Total Norwegian natural gas production in March was slightly less than the previous month, but higher than January's level. Oil production was about a half percent less year-on-year, but 1.5 percent above government expectations.

Earlier this month, the ONS Foundation in Norway canceled an event scheduled for August because of low oil prices and a lack of exhibitors. For van der Hoeven, this was evidence of the complex series of risks present in arctic exploration.

"The resulting lower gas and oil prices are making investment in the infrastructure necessary to bring Arctic production to market much more difficult," she said. "This is a very different situation than it was just one year ago, and we must be realistic – projects currently at the planning stage may find themselves stalled."