Minister, Ladies and Gentlemen,
It is a pleasure to participate at this important conference. I am especially pleased to be here today with my good colleague, Brian Wilson. Last time we met publicly was at a conference in London in November last year. Already at that time it was clear to both Brian and myself that, as North Sea neighbours, there was much to be gained from closer co-operation across the median line. We have a long history of good relations, but we both feel that some more emphasis on maximising value creation for both countries should be our common focus. From the meeting in London grew the seeds of an idea for a study and a joint Workgroup to carry it out.

We gave the Workgroup a challenging task:
To enhance commercial co-operation between the UK and Norway on all oil and gas industry aspects’

Not only a challenge in task, but also a challenging time frame - a report back for ONS. And here we are…So congratulations to the Team and all the other persons involved for meeting the time challenge!

A summary flyer of the report with its 14 recommendations is found on your seats.

I now pass the word to you, Brian.

Wilson's speech:
I agree with Brian that we share a common interest in developing optimally our oil and gas reserves. I am also glad we are committed to ensure that the petroleum activities take place safely in a sound environmental framework.

I can guarantee that I will do my very best to ensure that our resources are exploited to the full, without interference from real or perceived barriers. I encourage both countries' officials and companies to manage any problems with a pragmatic attitude. I am confident that we will.

Norwegian co-operation aims
As I will talk to you about later this afternoon, we have large resources on the Norwegian continental shelf (NCS) that can ensure that there will be oil and gas production on the NCS in a 100 years perspective. This long-term scenario can only be achieved through substantial efforts from the authorities and the industry giving sustained improvements in technology and environmental protection. Without such efforts we will end up in the decline scenario. In such a situation, Norway’s petroleum sector would stagnate over the next 10-20 years.

On the British side, and in some areas on the NCS, the oil and gas industry is maturing with spare processing and transportation capacity, which gives us an opportunity to develop resources at a lower cost across the border.

The two countries are in different stages in their oil and gas era, but still co-operational gains can be achieved. For Norway, increased co-operation with the UK can help us achieve the long-term scenario I mentioned. Along the median line alone, there are, on the Norwegian side, some 31 potential developments and 7 discoveries not currently commercial. Increased co-operation and innovative thinking will help maximising the economic recovery of these hydrocarbon resources.

Likewise, we have large gas resources that we want to supply competitive markets, and the UK is a promising market for new Norwegian gas. As you are all probably aware of, Norwegian producers have recently entered into long-term contracts with British buyers, and I see the potential for even substantially larger volume of gas going westwards.

About the report/challenges:
I am really impressed by the work done and by the way the various parts of the industry and the governmental officials have worked together.

The recommendations to the UK and Norwegian Governments and industry sectors alike are broad in scope and challenging. I understand that the process of follow up and implementation is already under way.

I agree that we need an adequate joint UK - Norwegian framework to ensure that viable cross-border projects are fully developed. In particular, cost efficient and flexible gas transportation is vital for producers on the NCS in deciding which markets to supply, and an appropriate treaty needs to be in place within the timeframe necessary for major upcoming decisions. Also, the right framework could be crucial in facilitating field developments across and along the median line. The amended Frigg/Vesterled treaty and the framework treaty for interconnecting pipelines show that we have created the appropriate framework successfully before.

I am glad this work has led the industry to set up consultation groups to assist the two governments in reaching a good agreement and create guidelines for existing treaties.

A large share of the value creation identified in the report is related to cost savings, but the rest is clearly values coming from field developments that would not have been developed or substantially delayed. These developments and increased co-operation with the UK in general represent great opportunities for the Norwegian supply industry.

There is already significant trade between the UK and Norway in the supply sector. This contrasts with the widely held perception that both nations advocated towards the other in the 80s and 90s of protectionism. I am glad this report contributes to burying that debate. The report asserts that there are no formal or political barriers that restrict market entry. Furthermore, data illustrates that reciprocal trade amounts up to 1.5 billion dollars per annum. This equates to around 1/3 >of total exports in the sector from both the UK and Norway and represents a significant success rate.

Further, it is interesting that evidence from other provinces suggests that operators do not differentiate between Norwegian and UK suppliers; they are merely interested in North Sea technology.

When it comes to technology, I would like to emphasise that it is through improvement in technology we can maximise the value of our hydrocarbon resources and solve the environmental challenges we are facing. I recommend that discussions on how we effectively can promote further technology development and how to do even better in environmental protection should be a part of the focus areas in the Implementation Group.

Conclusion:
In conclusion, the UK-Norway North Sea co-operation Workgroup has shown that sharing of experience and partnership will be even more important in the future. I am therefore glad that KonKraft together with OLF and PILOT will follow up this process and ensure an effective implementation of the Workgroup's recommendations working closely with the existing industry groups.

Brian and myself initiated this joint process 9 months ago, and I am impressed by how much it has delivered already! I am sure you agree, Brian, when I say that we will make sure that it fulfils its potential!