Norway blocked oil drilling in ecologically sensitive Arctic waters Friday over fears of a disaster similar to the BP PLC oil spill in the Gulf of Mexico.

The country's government decided to prohibit an environmental impact assessment in the area, which would have served as the first step in preparing for exploration.

"The chances for such an accident are small, but the consequences would be enormous," said Environment Minister Erik Solheim, describing the country's concerns about potential spills.

The oil industry criticized the decision, which they said could block them from an area that could contain as much as 3.4 billion barrels of oil.

"We are very dissatisfied," said Gro Brækken, managing director of the Norwegian Oil Industry Association. She called the region "the most interesting area and where production can be started at the fastest pace."

The government plans to open for oil activities in waters farther north (Bjoern Amland, AP/San Francisco Chronicle, March 11). -- PK