Address at Russian–Norwegian Oil and Gas Conference

 

State Secretary Bård Glad Pedersen

 

  • Thank you for this opportunity to speak here at the closing of INTSOK’s 12th annual Russian–Norwegian Oil and Gas Conference.
  • I have been told that you have had an interesting and fruitful day discussing how to responsibly drill and develop oil and gas fields in the Arctic.
  • I would like to underline how the Government see this initiative as a cornerstone in Norway’s Arctic policy, and in our relations with Russia.

    The Arctic is at the very top of Norway’s international agenda.

    • The Prime Minister was here in Tromsø this morning to underline this fact and to outline the Government’s priorities.  
    • Developments here are important not only for northern Norway, but for Norway as a whole, for Norway’s position in the world, as well as from a global perspective.
    • Fish, oil, gas, minerals, tourist destinations and centres of knowledge are all to be found here in the north.
    • The task of the Government is to ensure that we are able to grasp the opportunities nature and natural resources provide. And the key is knowledge.

    Our aim must be to ensure that the Arctic becomes one of the most innovative and knowledge-based regions of growth in the world. 

    • And this is possible. In our northernmost county, Finnmark, the offshore supply industry achieved an annual growth rate of 37 % between 2004 and 2011.
    • Our aim is a results-oriented Arctic policy that fosters the development of clusters with knowledge-based enterprises in the north.
    • The energy industry will be a key component in this.

    Successful offshore oil and gas activities generate positive effects for the region.

    • The on-going activities have already generated extensive ripple effects, including commercial opportunities for suppliers of goods and services to the industry.
    • The challenge for regional businesses is to develop their competence and capacity to be able to compete for contracts. And the oil and gas companies have a role in enabling this.

    To this end, education and competence building are key.

    • Young people educating themselves to meet the needs of the petroleum and energy industry in the northern regions will have a wide range of opportunities for the future.
    • We want our young people to see the highly attractive and long-term employment opportunities offered by the petroleum sector.
    • Northern Norway is a land of opportunities in oil and gas.

    The defining issue with regard to the future development of the Arctic is climate change.  

    • It determines access to resources and transport routes.
    • And a melting Arctic has global implications:
    • It increases global warming, accelerates sea level rise and could change weather patterns throughout the northern hemisphere.
    • The only responsible way to approach Arctic climate change is to try to limit it by effectively reducing greenhouse gas emissions.

    The challenge we face is how we can meet the climate challenges, while at the same time providing a growing global population with the energy needed to support development and a path out of poverty for all.

    • Oil and gas will remain important for decades to come. The International Energy Agency has shown us this.
    • With large fields across the globe nearing the end of production, no one should underestimate the challenge of finding and producing the oil and natural gas that is needed, also under a two-degree scenario.
    • CO2-efficient production of oil and gas from the Arctic can be part of the solution.

    Russia is the most important Arctic state in terms of territory, resources and activities.

    • For example, the Russian part of the Arctic is home to seven million people, whereas the three northernmost counties of Norway have 468 000 inhabitants.
    • Russia has jurisdiction over half of the Arctic coastline.

    Russia is our neighbour in the north.

    • We are sharing opportunities and challenges in the north together with Russia, and we are addressing many of them together.
    • We have been doing so through our broad bilateral relationship with Russia and through two decades of Barents cooperation.
    • We enjoy close cooperation with Russia, and we also have an open dialogue on issues where we disagree.
    • The Foreign Minister was in Moscow yesterday. There, he had meetings with his colleague Foreign Minister Lavrov and other important Russian friends, including representatives of the energy industry.

    Until 25 years ago, the border between our countries was a barrier. We want to turn it into a bridge – and to continue and intensify our cross-border cooperation.

    • Relations between Norway and Russia have been strengthened through the treaty on maritime delimitation in the Barents Sea and the Arctic Ocean.
    • Our common goal is sustainable management of the Arctic resources and responsible cooperation in the region.
    • The treaty creates new opportunities for petroleum activities and cooperation in the Barents Sea.

    This is a new chapter in our cooperation – and in our energy dialogue.

    • It takes time to develop a new petroleum region.
    • Thirty-two years have passed since acreage in the Barents Sea was first opened for petroleum activities.
    • Thirty years have gone by since the discovery of the Snøhvit gas field, which entered into production in 2007.
    • The Goliat oil field was the second significant Norwegian discovery in the Barents Sea.
    • It was made in the year 2000 – nearly twenty years after the Snøhvit discovery. We expect production to start this year.
    • In recent years we have had discoveries clearly demonstrating the great potential for the future.
    • Wells have been responsibly drilled for 30 years. But this is still a petroleum region with great exploration potential.

    According to the Petro Foresight 2030 report, investments and operating costs offshore northern Norway will in 2030 be on par with investments and operating costs in the North Sea.

    • By 2040, northern Norway may have overtaken southwestern Norway as a petroleum region.
    • The new discoveries in the Barents Sea, including promising oil discoveries in new areas, such as the Wisting field are encouraging.
    • This year, we expect record levels of exploration activities.
    • In June last year, the Norwegian Government awarded 24 production licences in the 22nd licensing round on the Norwegian continental shelf – 20 in the Barents Sea and four in the Norwegian Sea.
    • Also two Russian companies, Rosneft and Lukoil, were awarded licences in the Barents Sea.
    • Last summer the Norwegian parliament decided to open the Barents Sea South-East.

    This includes previously disputed areas, and will require even closer dialogue between our countries.

    • The delimitation agreement between Norway and Russia in the Barents Sea includes provisions for cooperation between Norway and Russia in case an oil or gas discovery is made that could extend across the delimitation line.
    • We have to cooperate to find practical solutions to challenges that may arise, as we have in the past.

    One of the keys to continued responsible development of the resources in the north is improved maritime safety and emergency preparedness and response.

    • The Agreement on Cooperation on Marine Oil Pollution Preparedness and Response in the Arctic was signed by the eight Arctic states in Kiruna last May. This was only the second legally binding instrument negotiated among the Arctic Council member states.
    • This important work is continuing in the Task Force on Arctic Marine Oil Pollution Prevention, which met in Oslo last week.
    • Norway and Russia are leading the Task Force together. Hopefully we will be able present the results of its work at the next Ministerial meeting in 2015.

    In order to develop potential resources on both sides of the delimitation line in a cost-effective manner, industry competition will be key.

    • The challenges relating to costs and technology are substantial. This is a region in which no company or country can achieve it alone.
    • Cooperation is one of the keys to unlocking the region’s potential. Norway and Russia are natural partners in this endeavour. 
    • Russian companies already have licences on the Norwegian continental shelf.
    •  Statoil and Rosneft have a cooperation agreement in Russia, and Norwegian companies are providing technological solutions for the Russian oil and gas industry.
    • As much as a quarter of the technology in the Prirazlomnoye platform is Norwegian in origin.

    The highest standards on health, safety and environment must be met to ensure sustainable development of the resources in the Arctic.

    • Finding technology that can withstand the severe climate conditions and meet the challenges of ice cover and long distances, as well as high environmental standards, is one of the main challenges when seeking to fully exploit the region’s potential as a future energy supply base.
    • The Norwegian oil and gas industry has world-class offshore technology, but as its activities move closer to the Arctic, it is encountering new challenges that require new and improved technology.
    • The Russian industry has equally long and valuable experience of contending with and managing severe climate conditions mainly onshore in the Arctic.
    • This knowledge meets in the Barents sea.

    In our relations with Russia, developing and sharing knowledge are key.

    • As this conference has shown, the RU-NO Barents Project, which was launched by INTSOK in 2012 with the support of the Norwegian Government and the Norwegian and Russian oil and gas industry, is helping to address these challenges.
    • The RU-NO project adds industrial weight to Norwegian–Russian energy cooperation and has become a key part of our energy dialogue.
    • The Ministry of Foreign Affairs, as the coordinating Ministry for Norway’s Arctic policy, seeks to be a partner for industrial actors through initiatives such as this.

    Our close relations, high level of competence and industrial opportunities form an excellent basis for future cooperation.

    • Thank you.

     

     

     

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