Oil minister keen on more production

Ola Borten Moe has been called “the perfect minister” by some players in the oil industry, not least because of his bullishness on their business and his desire to boost Norway’s oil and gas production. After handing out dozens of new exploration licenses this week, he’s eyeing even more expansion and claims that’s not necessarily bad for the environment.

Ola Borten Moe

Ola Borten Moe seems generally well-liked within the oil industry, but he has angered environmentalists. He doesn't see that as a problem, even though his party tries to maintain an environmental profile. PHOTO: Views and News

 

“Norway will continue to produce substantial amounts of oil and gas for decades, and even generations, to come,” Moe said during a meeting with members of the Foreign Press Association in Oslo on Thursday. Moe made it clear he’s all in favour of more exploration, as evidenced by this week’s record large licensing round, and hopes it will lead to more production.


After several major new discoveries off the Norwegian coast during the past year, Moe has reason to be optimistic but he’s not satisfied. “We need to continue to develop existing fields and we need to discover more fields,” Moe said. “My ambition is to keep Norwegian production at least at the same levels where we are now. We are pursuing strategies to keep production up.”


The way Moe sees it, the world needs more oil and gas because a substantial percentage of the world’s energy will still come from fossil fuels. And that means the world needs Norway’s oil and gas, because it’s produced in what he thinks are the world’s most environmentally friendly circumstances, with heavy involvement from state oil company Statoil.


“There are no doubts that the Norwegian Continental Shelf (NCS) is the cleanest and most efficient globally,” Moe said. “We need to maintain our ambitions for production, and we need to open new acreage.”


Moe’s bullishness on the oil industry has provoked both environmental groups, fellow government ministers including Erik Solheim, who’s in charge of environmental issues, and even his own party leader, Liv Signe Navarsete of the small Center Party, in recent months. Navarsete is known for sporting green jackets and she has been skeptical about proposals to allow oil exploration off scenic Lofoten. Moe has seemed to favour it, but that thorny issue has been carefully tucked away and won’t be dealt with by the current government or Parliament. It will instead be an issue during next year’s election campaign and be acted upon after the election in the fall of 2013, according to Moe.


The Norwegian oil minister commented on a wide range of subjects, among them:

Plans for a new pipeline to the Barents: Moe said a new report on the pipeline project from Gassco, which operates Norway’s transport system for gas, is “important” but doesn’t offer any clear answers on whether it would be economically feasible. “We need more answers before deciding to spend billions on infrastructure,” Moe said. He added later that no state money would be involved, so a pipeline needs investors and a final decision is thus up to commercial players. Norway’s Statoil is key among them.


Gas supplies to Europe: May be enhanced by a pipeline, but again, Moe and industry players want a better idea of how much gas Europe wants and needs. “Last year, Europe became more and more clear that they look at gas and Norwegian gas as a substantial answer (to their needs), and for energy security,” Moe said, adding later that “I would like my European colleagues to give me and the Norwegian industry very clear signals” on prospective gas demand. He said Norway currently provides 20 percent of Europe’s gas, and noted it can be a good alternative to nuclear power after the closure of many such plants, as in Germany.


Northern (Arctic) areas: Last year’s agreement with Russia regarding borders in the Barents opens new possibilities for exploration, and he’s keen on developing oil, gas and offshore supplier industry all over northern Norway. He could report no progress on the long-awaited Stockman project, calling it “a question for the Russian authorities” and the companies involved. He also called the area around Jan Mayen “very interesting” and said his ministry will send its report on whether to open up for drilling around Jan Mayen “soon.” Then he hopes to “go quickly and ambitiously forward.”


More on Lofoten: Moe doesn’t think the new discoveries announced in recent months reduce the need for oil exploration off Lofoten, more music to the ears of an oil industry keen to start drilling. He said the issue was also “an open question” within his own party, but nothing is imminent. His ministry will “spend most of this year” working on the assessment of exploration in the waters off Lofoten and Vesterålen. After that, “it’s a political process” with no decision due until after the elections in September 2013.


Environmental issues: Moe doesn’t think it’s difficult to reconcile Norway’s role as a major oil and gas producer and its efforts to maintain a credible environmental profile. “It fits very well,” he claimed, citing the “clean” continental shelf and new technology. He claimed Norway will meet or surpass its emission goals, that a test center for carbon capture at the Mongstad plant will open this spring and that steps are being taken constantly for cleaner emissions. “I think I have a good relationship with the environmental movement,” Moe said. “We don’t agree on all issues all the time, and we play different roles.” He thinks the level of debate is healthy.


Relations with China: In a deep freeze since the Norwegian Nobel Committee awarded the Nobel Peace Prize to Chinese dissident Liu Xiaobo, Moe shook his head when asked if he knew of any new meetings planned with Chinese officials. “My ministry and the entire government hopes relations will improve,” he said, but noted “we accept that things are as they are.” Norway is involved in development of new shipping lanes in the Arctic, above Russia, and any such transport routes “would literally bring us closer.”


Statoil’s involvement in tar/oil sands in Alberta, Canada: “That’s really up to Statoil, and something they decided to do for commercial reasons,” Moe said. He won’t interfere, even though the state has a major stake in Statoil and the project has faced strong opposition in Norway. “We expect them (Statoil) to contribute wherever they operate,” said Moe, claiming that emissions from the controversial oil sands project “are no higher than emissions from Venezuela, and no one is complaining about that.”

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