* Norway government seeking to offset production decline
* Draft law to allow drilling in waters vulnerable to ice
* Environmentalists see risks
By Environment Correspondent Alister Doyle
OSLO, June 14 Norway is set to permit offshore oil and gas exploration in Arctic waters vulnerable to sea ice, angering some opposition politicians and environmentalists who say ice sharply raises risks of accidents.
Norway's centre-left government, seeking new resources to offset a decline in production to a 25-year low, has often said it will not allow drilling in ice-covered seas. But the exact definition has been unclear.
A draft law, agreed by parliament's energy and environment committee this week, will allow drilling in an offshore border zone with Russia the size of Switzerland, part of which was covered by sea ice in a chill 2003 winter.
"This is another step towards the North Pole. We should stay out of these sensitive areas," said Kjell Ingolf Ropstad, of the opposition Christian Democrats and the only member of the committee who voted against the plan.
The draft is likely to be adopted by parliament on June 19. Ropstad told Reuters ice could easily reappear in a freak winter even though climate change means a long-term thawing trend.
In January, the Norwegian oil safety regulator said that even fields that are developed in areas that are ice-free have a statistical risk of a freeze and that oil companies should take that into account.
The new plan sets a variable limit for drilling in the new area, saying that oil and gas exploration must be at least 50 kms (35 miles) from the observed edge of the ice, which recedes towards the pole in summer and expands south in winter.
Ropstad and environmentalists want to ban drilling from any area that was covered by ice at its maximum winter extent in the past decade or so to avoid surprises like the chill 2003 winter. Ice also touched the northern fringe of the new area in 2011.
An official at the Oil and Energy Ministry said that the rules did not mark a change in policy, merely a clarification.
Environmentalists disagreed, saying a fixed limit had always been implied, including by past official maps. Foreign Minister Espen Barth Eide recently said it was "definitely not Norwegian policy to drill in ice-covered areas."
"This is a break with 40 years of Norwegian oil policy," said Nils Harley Boison of the WWF conservation group. He said that ice was a threat to drilling installations and any spills on ice were virtually impossible to clean up.
Ice conditions can quickly change and mean that a 50-km buffer zone is too small, he said.
U.S. estimates show the Arctic may hold 13 percent of the world's undiscovered oil and 30 percent of its gas.
Other members of Norway's energy and environment committee said that a proper definition of the ice edge would be part of a wider environmental assessment in 2015.
The Socialist Left Party, a member of the three-party government that has opposed Arctic drilling, said it agreed to open the south-east Barents Sea only as part of a government compromise that kept other areas off limits. (Editing by Keiron Henderson)