Your Majesty.

Distinguished guests.

Ladies and gentlemen.

First of all, I would like to congratulate the ONS Foundation for once again putting up a world class event.

Secondly, I want to express my gratitude for the opportunity to take part here myself. I have had the pleasure of attending ONS previously, in other capacities. It feels good to be back, to meet with old friends and to be able to observe the developments in the energy industry firsthand.

It goes without saying that any Norwegian Prime Minister will have to be concerned with energy. After all, the energy sector plays an important part of our daily life. It has shaped our industry and economy for some 100 years, - ever since the first development of modern hydropower by the turn of the last century.

Our rich energy resources have provided Norway with unique opportunities, as a basis for growth and as a source for development of technology, skills and competence.

Norway is a substantial supplier to the international energy markets. We rank as the world's 7th largest producer and 3rd largest exporter of petroleum. Together with Russia, we are the only net exporter of energy in Europe, and we hold the largest reserves of natural gas in Western Europe.

Thus, while we are a small country in most respects, the situation is quite different in the area of energy. This gives us a special role, but also special responsibilities.

2Common challenges for governments and industry

Yesterday I attended a meeting here in Stavanger, addressing the theme of world poverty. It gave me an opportunity to remind the audience that a hundred years ago Norway was a poor country itself. In fact, the 20th century is very much the story of how we worked our way out of poverty.

How did this happen? Obviously, access to natural resources was important. However, they did not create wealth by themselves. It was our collective ability to manage and develop them that made the difference. Fish. Timber. Hydro power. Oil and gas.

We had to build new skills. We welcomed foreign investments and new technology, while at the same time maintaining natural control and ownership over our resources. And we became more and more aware of the importance of fair distribution of wealth and power, developing democratic institutions and establishing social security through a strong welfare state.

Today, we are not only concerned with keeping a high level of value creation, but also with how to manage high revenues in a way which will benefit future generations. It will always be politically tempting to increase public spending in periods with large surpluses. However, we have learned from bitter experience that such a policy can cause great damage. And at the same time, we have to take our future need for public welfare into account in managing our petroleum wealth.

It has always been important for Norway to have a competitive and attractive environment for business. Foreign capital and know-how was needed to initiate the development of our hydro power potential. It was equally needed to develop our petroleum resources. Our experience is that foreign capital and knowledge can improve our own industry, and give valuable contributions to our economic development.

Being a wealthy nation gives us a particular responsibility to contribute to countries which strive for economic and social progress. That is why keeping a high level of Norway's developing aid is important to us.

However, the ultimate key to growth and social justice lies in the way in which every country manage their own resources. Obviously, the international oil and gas companies have a particular contribution to make in many of the countries where they operate.

The energy industry has taken important steps in defining its new role in a more integrated, competitive and transparent setting. It has stepped up its cost efficiency and value creation potential. It has moved forward on new technology and environmental issues. It has taken a clear stand on human rights and social responsibility.

It is interesting to note that just as foreign companies were vital to the development of our own petroleum industry, Norwegian companies can play an important role in the development of new resource areas in other parts of the world today. This way, we can use our capital and knowledge in order to spur value creation in countries where it is much needed.

This is an illustration of the enormous potential of the energy industry as such. Not only as simply a provider of energy, but also as an important contributor to social development in the various host countries.

That is why I am pleased to observe that more and more companies have taken the position that a stable, democratic environment is good for business, no matter which part of the world we are looking at. That social development is good for business. And that safeguarding the environment is decisive for the industry's own ability to prosper and evolve.

This way, governments and companies can work within the same framework, and share common goals. Even though their tasks and responsibilities are different.

This way, it is possible to make a difference in a world where so many changes are needed.

3Developing the NCS further

Over the last few years we have witnessed a tremendous development in technology, competitive climate and industrial restructuring.

This spring, my government presented a White Paper with a number of new measures to simplify procedures and encourage more efficient use of resources on part of both the companies and authorities. We will continue to adjust means in order to ensure the competitiveness of the NCS.

The Norwegian resource base is still quite comfortable. In particular, Norwegian natural gas will become an even more important source of energy for Europe. Obviously, the great changes taking place in the gas markets are challenging. However, they also open up new possibilities.

In my view, the vast gas infrastructure which has been developed from Norway to the rest of Europe is not only a means for transportation of energy. It is also a symbol of growing co-operation and interdependency between European countries.

The basis for this process is not only need for energy. At the very bottom lies increased mutual trust and confidence, and appreciation of the fact that Europe can only be developed by working together.

A few weeks back I had the pleasure of visiting Poland. During the visit we initiated negotiations on Norwegian gas exports through a new pipeline, connecting Poland directly to the existing infrastructure on the NCS.

Of course, these negotiations will be carried through on a commercial basis. However, such an agreement also has exciting political ramifications. It would be a powerful symbol of the way Europe is moving, and how new connections are constantly established between what used to be "the East" with what used to be "the West." It would be a contribution from the energy industry of tying Europe even more closely together.

Increased use of natural gas will help both Poland and the rest of Europe to improve its environment, but it will also be a driver for innovation and industrial development both upstream and downstream.

From a Norwegian point of view, all of this is highly welcome. Our main concern, however, is to maintain a regulatory and commercial framework which take the long-term character of the industry into account – not least when it comes to overall resource management.

4Norwegian oil and gas industry

Ever since exploration and production started on the Norwegian Shelf, we have had strong ambitions of developing a competitive oil and gas industry in this country.

Today, we can see that we have succeeded in many ways. Norwegian companies are high-standard, high-technology players. We believe that this part of our industry can be developed even further, both in Norway and outside the NCS.

Currently, we have a political debate on the future of the direct state involvement in the oil and gas industry. In particular, this debate is focused on the SDFI and Statoil.

Both Statoil and the SDFI were created as tools of their time. Statoil was established at a time where state-owned oil companies were the rule, not the exception. The SDFI has been an important instrument in ensuring value creation on behalf of the Norwegian society.

With the great changes taking place within the energy industry, it is appropriate to ask whether the current organisation of the state involvement is the right one.

The goal of direct state involvement in the oil industry is to ensure high returns for the society at large, both in financial and industrial terms.

We are proud of Statoil’s achievements. Today, Statoil stands out as one of our most important companies, and it competes on equal terms with the other oil companies on the NCS.

There is broad political support for Statoil’s ambitions of seeking growth opportunities internationally, so that experience and knowledge gained in Norway can be put to use elsewhere. We want Statoil to continue to be an engine for industrial development and growth.

At the same time, increased competition and economic integration increases demands for openness and transparency – both on part of companies and governments. In executing the role as owner of Statoil, the government must define clear goals and act in a way which is consistent with the goals of competitiveness and value creation. In particular, it is important to make clear distinctions between the states ownership role and its various other roles as regulator and ultimate resource owner.

Statoil's environment is one of intense competition and restructuring. I believe we can strengthen Statoil's opportunities by allowing private owners into the company. On the one hand, this would be a contribution to clarify the state ownership role and the goals of the company itself. But equally important, it would add new ownership resources and give Statoil access to capital markets in a new way. In addition, it would allow the state to share some of the risk, while at the same time increasing the level of measurement of the company’s performance.

However, I do believe that the state should continue to own the major part of Statoil, not least because of the great importance of the company to Norway.

The SDFI represents substantial value for the Norwegian society. It's portfolio of assets has been obtained by considerable public investments over the years. As a tool for ensuring high government take from the oil industry it has been successful.

Today, the SDFI is confronted with new challenges. It is affected by the growing maturity of the NCS, and of the changes in the market place. At the same time, the presence of the SDFI can influence the development of the NCS itself.

Our objective is clear: We want the best possible management of our common resources. That is why we ask whether the current model of caretaking is sufficient, or if we can achieve more by letting Statoil actively manage some of the assets as part of it's own resources.

In general, we need to consider whether both a restructuring and a more active management of the SDFI is necessary in order to ensure future value creation.

This is not a criticism of the way Statoil has undertaken the role as caretaker of the SDFI up to now. On the contrary, I think Statoil has done an excellent job within the current framework.

However, as the goal of high returns on behalf of the Norwegian society remains, we should be open minded when it comes to the means of achieving it.

5The need for corporate social responsibility.

Energy is key to development. Hydrocarbons are not evenly distributed throughout the globe. It is an unfortunate fact that the bulk of the world’s petroleum resources are concentrated in countries where political institutions, democracy and human rights are not firmly established.

Under favourable conditions, the petroleum industry and the revenues it generates could promote the political and economic development in these countries. I believe the Norwegian example makes the point.

The energy industry is placed at the very heart of economic, social and environmental progress. It is hard to think of other areas of industry with the same challenges and responsibilities.

It should go without saying that companies have a direct responsibility for the impact of their activities on their employees, on consumers, on the environment and on the communities within which they operate. As a consequence, they should take along the same high standards they use in their own country when they establish operations in new countries.

Corporate responsibility covers the whole range of a company’s interaction with society at large. From health, safety and environmental protection, to conditions of employment, industry and labour standards, social development and human rights.

Business corporations are not political entities. There is a difference of role and responsibility between a firm and a government. Never the less, companies do have responsibilities, and their actions do have consequences. Corporate social responsibility must mean that companies aim to do business in a sustainable and responsible way.

Petroleum investments are often of great economic importance to the host country, and they often involve intergovernmental agreements. They build bilateral contacts and relationships.

Today, corporate social responsibility implies both a deeper and wider engagement than previously. I am glad to see that more and more companies are willing to take on such responsibilities, and to consider their own work in a broader context. This way, new partnerships can be formed, mobilising private and public efforts to promote human rights and a healthy development in host countries which face great difficulties.

I firmly believe that we can turn the tide of poverty. And we must do so by having the public and private sector working together.

For instance, the UN family and private industry have created a global alliance to vaccinate every child. Six children die every minute from diseases they could easily have been vaccinated against. My government has pledged 1 billion kroner - or 125 million dollars - over five years to support this initiative. Because healthy children is key to a healthy future. And because preventing childhood disease is respecting human rights and human dignity.

For it’s part, the Norwegian government intends to continue to pursue a proactive human rights policy, both in international bodies and in direct co-operation with states on a bilateral basis. I trust the oil and gas companies will continue to do the same.

A businessman once said: "It is easy to make a buck. It is a lot more difficult to make a difference." The task, of course, is to make a buck while at the same time making a difference.

6Final remarks

Your Majesty.

Ladies and gentlemen.

I have been fascinated by the energy industry for many years. It is an important industry. It is an industry with the ability to change and develop. It is an industry which is truly capable of changing the world. Of making a difference.

In the development of the NCS, we have been engaged in a stimulating process of collective learning. It think it is fair to say that we have all benefited from this learning experience.

This does not mean that companies and the government are in total agreement on each and every issue. However, it does mean that we will continue the way forward on common ground. Sharing many of the same goals, but with different roles to play.

Businesses and governments need each other. We are both dependent on the other part doing it’s job properly. When we find the right balance, we are in the position to make progress and create better results.

That is why shaping the future is so much of a balancing act. It can be both difficult and demanding. However, our experience tells us that it can also be extremely rewarding.

In the final end, I believe that the energy industry will be shaped by meeting people's needs. The need for reliable energy. The need for social and economic progress. The need for fundamental political rights. And the need for a healthy environment, which we can safely pass on to our descendants.

Thank you very much for your attention.