Ladies and Gentlemen,
The Norwegian Continental Shelf is a laboratory for development of new solutions and technologies and is consequently a unique basis also for internationalization.

In order to be competitive on the international market it is of overriding importance that the cluster is in the technological forefront. This requires joint efforts from private companies, institutions and the authorities.

An International Industry – One Market
The oil and gas industry is extremely international and consequently there is in principle no difference between the international and the Norwegian market – it is all one market. Thus, it is obvious for you that if the supply industry wants to maintain its position on the Norwegian Continental Shelf it needs to also be competitive on the international market.

The fact that this industry is international entails that companies operating elsewhere in the world supply the Norwegian Continental Shelf with new solutions and ideas. Active participation by the international oil and gas industries in Norway has always been important in this respect.

Corporate Social Responsibility, a subject that was thoroughly discussed at last year's INTSOK conference, is also worth revisiting. I will get back to this issue.

The Governments involvement regarding internationalization and R&D must be seen in relation to each other. This annual conference on internationalization, innovation and R&D in the petroleum sector does also recognize this. It will cover three very important and connected issues.

Tree Important Issues
The goal is to commercialize advanced technology and skills that have been developed on the basis of experience from the Norwegian Continental Shelf. To succeed it is important to continuously renew both technology and skills - OG21, Demo 2000 and the Research Council's oil & gas program are important tools in this respect. However, it is not enough to have the product if you're not able to sell it. To meet this challenge we have INTSOK, which increasingly is recognized as the vehicle for providing market information, improving co-operation among its 86 partners and communicating the capabilities of the Norwegian supply industry to key clients in overseas markets.

KonKraft is another good example of cooperation and communication in the oil and gas industry. This process is managed by Topplederforum where the authorities and representatives from the whole cluster jointly works in order to:

• Strengthen the competitiveness of the Norwegian Continental Shelf
• Secure the competitiveness of the Norwegian supply industry at the home market and abroad.

Norwegian Oil & Gas "World-Class" Clusters
The Norwegian oil and gas "world class clusters" have proven to be competitive in several supply chains of the petroleum industry. I will not go into detail, but this overview of the Norwegian clusters made by INTSOK illustrates this.

Strong presence in local markets and emphasis placed on technology areas were we have an advantage provides a unique position that should enable the industry to reach the ambitious targets set by INTSOK for internationalization of the industry.

The Norwegian supply industry consists mainly of a large number of small and medium sized companies. Approximately 85% have a turnover of less than USD 30 million. As globalization expands, these companies face an increasing challenge in relation to the international players. INTSOK offers its partners a response to this challenge by combining forces and promoting Norwegian "world class clusters" to clients and business partners.

Three Challenges
The Norwegian oil and gas industry is faced with the following three challenges when seeking to internationalize:

• The market challenge
• The technology challenge
• The customer challenge

The Market Challenge
The first challenge is the market challenge. The international oil and gas market seen from a Norwegian point of view consists of:

• Mature markets
• Developing markets
• Markets under observation

Common for all three market categories is that INTSOK activities play an important role for companies wanting to enter these markets.

I would like to underline that the government is confident that Norwegian industries will be able to compete in these markets in the areas where we have competent clusters.

I have noted that that many other oil producing countries would like to look into the way the Norwegian authorities have played their role with regulations and licensing policies throughout the national petroleum history. Included in this model is also the strong and committed co-operation between the authorities and the industry, and between national and international industries. Norwegian authorities are open to sharing our experience with other countries.

The Technology Challenge
The Norwegian Continental Shelf is maturing and consequently we are facing several challenges relating to:

• Fewer discoveries and smaller fields
• Tail end production and EOR
• Environmental requirements
• Deep water and subsea production

All of these are related to the second challenge, which is the technology challenge. The Norwegian oil and gas cluster has a strong position in several areas. The common denominator and keyword for these areas is frontier technologies. Technology is the single most important factor for the Norwegian oil and gas industry in order to reduce costs, strengthening competitiveness and facing future challenges.

We definitely have advanced in the following areas:

• Offshore facilities and production systems like floating production, subsea installations and multiphase pipeline transport.
• Oil recovery from the Norwegian Continental Shelf fields is high and Increased Oil Recovery (IOR) is an advanced skill within the Norwegian petroleum industry.
• Skills and technology for marine operations are among the most advanced in the world.
• Environmental and security requirements have been very much focused on the Norwegian Continental Shelf. Technology and skills to meet these requirements are highly developed within the Norwegian industry, and this will undoubtedly become increasingly more important also in other areas of offshore petroleum production.

International Sales by Norwegian Oil & Gas Suppliers
Norwegian based supply industries are doing well. This is illustrated by the international sales by the Norwegian oil and gas suppliers during recent years. Sales have more than doubled – from 15.5 billion in 1995 to 35 billion in 2001. The goal of INTSOK is to reach 50 billion within 2005.

However, it will be difficult to reach this goal without further research and development. Thus, I would like to underline the activities of Demo 2000, OG 21 and the Norwegian Research Council as necessary preconditions for further developing a competitive industry.

Demo 2000
The Demo 2000 vision is that Norway should be a global testlab for development, testing and qualification of new technology. New technology can reduce the balance price per barrel by several dollars, hence make new developments possible. This improves the competitiveness of the supply industry, both at home and in the export market. DEMO 2000 has, because of its impressive results, also received international recognition. The government supports Demo 2000.

OG21
OG21, the national strategy for R&D, is established in order to meet the challenges linked to further development of the Norwegian Continental Shelf and strengthening of the international competitiveness of the Norwegian oil and gas industry.

The vision is that we will have:

• World class competence
• A leading global industry

In addition we want to be:

• The most innovative offshore province in the world

In order to realize this vision OG21 have identified nine technology targets with oil companies as lead parties to each of these based on its five focus areas:

• Environment
• Increased recovery
• Deep water
• Small fields
• Gas value chain

These areas cover the challenges at the Norwegian Continental Shelf as well as internationally.

The Research Councils oil and gas programme
In relation to OG21 we expect a coordinated R&D commitment from the oil and gas industry in joint effort with the supply industry and petroleum related institutes. The Research Council plays an important role in this process. In order to secure an overall and coordinated national R&D commitment in the oil and gas sector it is important that government supported programs, where the petroleum industry is involved, is seen in relation to each other.

The Customer Challenge
INTSOK partner companies have demanding customers with different criteria for selecting business partners and suppliers. The customers can be grouped in several categories.

Relationship-building activities with ministries and national oil companies were, during 2002, an integral part of the promotion of Norwegian competence and technology. This work will continue, and the Ministry and I am prepared to take active part in such activities also in 2003.

Corporate Social Responsibility
In the era of globalisation, multinational companies – not least in the oil and gas business - are playing major economic roles in most countries of the world. The energy industries have to act as responsible global citizens. More than ever before, governments, consumers, stakeholders and the general public are more alert, not only to environmental concerns, but also to human rights issues. The international oil and gas industry, therefore, not only has a moral obligation, but also an economic interest in promoting social progress and opposing human rights violations. This is also necessary to achieve increased acceptance in public and political perception.

The Norwegian government supports Statoil, Norsk Hydro and the Norwegian supply industry when they engage in business abroad. We do expect them to take political, social and environmental issues into account when doing so.

Conclusion
2002 is the year in which INTSOK celebrated its fifth anniversary. Together with OG21, Demo 2000 and the Research Council's oil & gas program we have created an excellent foundation for supplying the international market with Norwegian competence and technology on a competitive basis.

I look forward to the discussions on the important issues of this conference – internationalization and technology.

Thank you!

Foils (in pdf format)