Foils (pdf format)

Ladies and gentlemen,
It is a pleasure to welcome you all to this seminar in connection with the Norwegian State Visit to Singapore

Singapore has for a long time been a major business centre for the Norwegian oil and gas industry. Moreover, many of the multinational oil companies run their Asian operations from here. Singapore is about to become important as a regional gas hub for Southeast Asia. In order to be present in one of the world's most prolific business centres, the Norwegian oil and gas industry has been increasing its presence in Singapore over the past years. In this connection, Intsok, the Norwegian Oil and Gas partners, is playing an important role as facilitator.

The Petroleum sector inNorway(2003)
As an introduction, I would like to share with you some key figures about the Norwegian petroleum sector. This is the single most important industry in Norway as seen from these macro-economic indicators. Let me mention for instance that the sector made up 19 % of the Gross Domestic Product in 2003 and about 46 per cent of the total export value. I would like to bring to your attention that Norway has a potential for another 50 years of oil production, and gas for much longer.

The subject of my speech is Norway as an Innovator within Gas Technology and Gas Utilization. How to realize the potential of offshore gas is a prime concern to many petroleum producing countries. The gas business has up to now been local, national or regional, limited by the reach of pipelines and the absence of a global market. In the next decades the gas business will be transformed into a truly global business. To illustrate this I will share a few investment projections with you, made by the IEA in last years Investment Outlook.

Gas investment requirements 2001 – 2030.

• Cumulative investment in the natural gas supply chain over the projection period will be 3.1 trillion US dollars.
• North America alone will account for over a quarter of total investment in natural gas.
• By 2030, half of inter-regional gas trade is projected to be in the form of LNG.

No one claims that these figures will be precisely validated in thirty years time, but they definitely provide an indication about the potential for oil and gas companies, contractors and suppliers. This is why we are gathered here in Singapore today!

The main part of my remarks will concern Norway's role in the European and global gas markets, and in near future LNG markets. Then I will give an example of how the Norwegian supplier and contracting industry are ready to face the challenge that the future LNG potential represents.

The Norwegian Gas Sector.
Norway has the second largest gas resources in Europe, after Russia, and is a major supplier of gas to the European markets.

Today, there are about 50 fields producing gas on the Norwegian Continental Shelf (NCS). In order to transport gas from field to market, we have developed one of the world’s most extensive offshore pipeline transportation systems. The system consists of more than 3700 miles (6000 km) of offshore pipelines and two large gas processing plants, integrated into one network.

Europe is the main market for Norwegian gas. Today, Norwegian gas sales amount to 14 percent of the European gas consumption. Most of the gas from the NCS is sold on long term contracts. However, we expect that this share will decline as the gas markets in Europe continue to open up for competition and the short term markets for gas evolve further.

Norwegian Gas Resources
As only 13 percent of the total resources have been produced so far, Norway will remain an important long-term supplier of gas.

We usually divide the NCS into three areas, with different degrees of maturity. The southernmost area, the North Sea, is the most resource-rich and developed area. Most of our producing fields are situated here.

In the Norwegian Sea and the Barents Sea farther north only about 1 percent of the expected gas resources are produced. These areas have the largest potential for new discoveries. Two major gas fields are being developed in the Norwegian Sea and the Barents Sea, Ormen Lange (gas reserves 14 tcf) and Snøhvit (gas reserves 7 tcf).

Norwegian Gas Sales
Norwegian consumption of gas is very limited. About 99 percent our gas is therefore exported or used for gas injection.

Norway is today the third largest exporter of natural gas - behind Russia and Canada, but ahead of Algeria. We are also the third largest exporter of oil - behind Saudi Arabia and Russia, but ahead of Iran. Norwegian production of crude oil and liquids is about 3.3 milion barrels per day.

In 2003, Norwegian supplies of gas amounted to about 7 billion cubic feet (bcf) pr. day. Gas supplies will increase rapidly in the years to come. A gas sales level of more than 11 bcf/day within 2010 is regarded as a realistic development. In addition, there will be gas produced for injection in these fields. The development of the fields Ormen Lange and Snøhvit will be important contributions to the increased gas sales.

Due to the proximity to the European markets, gas field developments in Norway have been based on pipeline transportation. This has been the most cost-efficient way of bringing gas from the NCS to Europe, also for gas from the Norwegian Sea located relatively far from the European end users. The newest pipeline to be developed, Langeled, from the Ormen Lange development to the east coast of the UK, has a total pipeline length of approximately 745 miles (1,200 km). This will be the world's longest subsea gas pipeline.

Snøhvit LNG
For gas fields located offshore in the Barents Sea in the northern part of Norway, LNG is the best economic solution. The Snøhvit field is currently under development. This is the first field development in Norway based on an LNG solution and the northernmost LNG development in the world located at 71 degrees north. (Prudhoe Bay is located at 70 degrees north). The development of Snøhvit is based on a pipeline to a treatment plant onshore, from where gas will be transported by LNG carriers. The gas reserves in Snøhvit will allow production for more than 20 years.

The development of Snøhvit will provide a basis for further field developments based on LNG in the area, and Snøhvit is therefore important for further exploration activities in the Barents Sea. We hope that considerably more gas is to be found in this area. Norway will through our licensing policy award new acreages to make sure that the remaining gas potential is uncovered.

Gas production from Snøhvit is expected to be about 0,55 bcf/day. USA is a major market for Snøhvit gas (0,23 bcf/d), where the Norwegian company Statoil will be a main marketer of gas based on LNG. To gain access to the US market Statoil has acquired capacity at the Cove Point terminal in Maryland. We hope to become a significant supplier of LNG to the US.

Technology – Past, Present and Future
Technology development has been fundamental to the development of Norwegian petroleum resources. Through targeted R&D efforts we have managed to overcome the many technological challenges and barriers that exploitation of the resources on the NCS have represented.

The giant concrete platforms of the 1970ties and 1980ties have been followed by floating production and sub-sea systems. Already we see seabed separation and extended well stream transfer to onshore plants being developed.

Today, the Norwegian oil and gas industry consists of internationally competitive supply chains, covering most stages in the petroleum value chain from exploration via development to production and operation. Also the skills, experience and technology developed on the NCS are utilized by the international oil and gas industry all over the world.

Government principles for R&D
One of the major principles of the Norwegian Government has been to encourage links between the oil companies, supply industry and research institutions. Besides new technological solutions, this approach has brought several positive effects:

• R&D work through industrial co-operation has stimulated openness from oil companies towards the domestic industry.
• The oil companies have made their expertise available.
• Oil companies and suppliers have been working together to co-ordinate their R&D programs. Significant synergies have been obtained by developing technology in this manner.

I think this is a result of our ability and willingness to work in dynamic networks with international players. This has no doubt produced a strong petroleum cluster. Government funding has proven to be a catalyst in promoting co-operation between the various players.

Norwegian LNG Technology – AK
Combining experience and innovation from shipping and offshore industries has been instrumental in developing Norwegian LNG technologies.

The Aker Kværner group and LMG Marin are examples of Norwegian companies that have developed such expertise for the LNG value chain.

Recently, Aker Kværner has been awarded a contract to perform engineering, procurement and construction management services for ChevronTexaco’s proposed Port Pelican and Baja California offshore LNG terminals, located 8 miles off the coast of Tijuana.

The company has also been awarded a contract to perform front-end engineering and design (FEED) work for ExxonMobil, Qatar Petroleum and Edison's LNG terminal in the North Adriatic Sea, located approximately 10 miles from shore in waters almost 100 feet deep.

Also, the Kværner group developed LNG carriers with spherical tanks in the early 1970s. This design now dominates the market, accounting for about 50 percent of the world fleet. So actually, the tankers being built for transporting LNG from Snøhvit to Europe and the US is based on Norwegian design.

Norwegian LNG Technology – LMG Marine
LMG Marin will later on today present their innovative concept for construction of LNG terminals at shipyards.

I mention this to illustrate that the Norwegian competence within LNG technology is both broad and diversfied. I think this seminar will underscore my point,

Conclusion
To conclude, Norway is supplying large quantities of oil and gas and still holds a substantial resource potential. Hence, I would like to emphasize our ambition to maintain the attractiveness of the NCS in a global context.

The Government will contribute to this through stable, but also flexible, framework conditions, including important elements like the licensing policy and emphasis on R&D. Not least, we will pursue a policy of sustaining an effective and innovative petroleum cluster based in Norway.

More than ever, this implies focusing on co-operation with our international partners, both on the NCS and internationally.

I think this seminar provides a great opportunity to strenghten the co-operation between Norway and Singapore in the petroleum sector.

Thank you for your attention!