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Oil means revival for town in Norway's northern reaches

Thanks to the first offshore field being developed in the Barents Sea, Hammerfest, once a dying city, is seeing a new prosperity.

December 26, 2006|Doug Mellgren | The Associated Press

HAMMERFEST, NORWAY — The sprawling fish processing plant that once dominated the downtown waterfront of this Arctic town is gone, with workers racing in the polar darkness to build its replacement, a sparkling cultural center.

It's a sign of new prosperity since the arrival of "The Oil" -- as Norwegians call the petroleum industry -- to the northern fringe of Europe.

Hammerfest, a town of about 9,400 people roughly 1,100 miles north of the Arctic Circle, is enjoying an energy boom as the base for oil-rich Norway's latest petroleum drive: the first offshore field being developed in the Barents Sea.

On the outskirts of town, a natural gas liquefaction plant is under construction by a workforce of more than 3,000.

"Before, Hammerfest was a tired city. You could see it on the buildings," said Arvid Jensen, of the local Petroarctic consulting group. "Now, over the past three years, they have fixed up all three schools. Everyone has become positive, and young people are coming back."

State-controlled oil company Statoil picked Hammerfest as the base for its Snoehvit offshore natural gas field, the largest industrial investment ever in northern Norway.

It has been a welcome boost for Hammerfest, the first European town to get electric streetlights. Like many towns on Europe's northern fringe, Hammerfest had been locked in a downward spiral of lost jobs and declining population.

Mayor Alf Jakobsen compared the revival to the reconstruction of Hammerfest, then a picturesque fishing village, after fleeing Nazi troops burned it to the ground at the end of World War II.

"Hammerfest was on a steep downward curve. Snoehvit was the rescue of Hammerfest," Jakobsen said.

Hammerfest has always been a bit optimistic. It claims to be the world's "northernmost town" -- although other towns, such as Barrow, Alaska, are farther north. The town shield shows a polar bear, probably last sighted here during the Ice Age.

It was also renowned for summer traffic jams of wild reindeer, which the city has countered with a 12-mile-long fence around the town center.

Polar night has come to Hammerfest, and people here will next see the sun in January. But construction on the cultural center and other building projects continues unabated under the glare of floodlights.

There is a downside to the oil boom. The influx of workers has pushed housing prices up 30% since Snoehvit construction started in 2002, making it tough for young families to buy homes.

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