Speech at the WPC - Norwegian Reception

Dear Ministers, Ladies and Gentlemen,
First of all let me express my warm welcome to you all. It is indeed a pleasure for me to host such a gathering of prominent guests and I am happy you could find time for this special occasion.

The WPC is considered to be an important and excellent Forum for Petroleum Science, Technology, Economics and Management. In fact, Norway has been a member of the WPC since 1975, only a few years after we produced our first oil.

Norway has taken an active part in the development of the WPC during the last 25 years, and was happy to host the 14 ^th> Congress in 1994 in Stavanger. It is important for the WPC to adapt to the changes of the petroleum industry and society in general, and thus remain in the forefront of development.

The Norwegian Government is therefore pleased to endorse the candidacy of Dr. Røren as President of the WPC for the next cycle. Dr. Røren is a person with excellent contacts with petroleum and service companies world-wide. He belongs to a very international company himself, and has a long record with the WPC.

Since I am speaking to an international audience of high standing, I would like to take this opportunity to say a few words on Norway's aspirations as an international player in the oil and gas sector:

First, let me stress that Norway recognises its responsibility as a global partner in the energy field. Even though we are a small nation, Norway is a major producer of energy. We export close to 100% of our crude production – 3 million barrels per day. This puts Norway in second place after Saudi Arabia among the world's leading net crude exporters. Thus, a key element in Norwegian Petroleum Policy is to contribute to stability in the oil market.

The abrupt fall in the oil price two years ago reminded us how vulnerable we are to the fluctuating oil price. Investments were dramatically curbed and the overall activity level suffered. Such volatility has a serious impact on the world economy and the management of the petroleum resources. This in turn affects the security of supply.

Stability in the oil market with prices at a reasonably high level should therefore be in the interest to producing as well as consuming countries. This is why Norway implemented unilateral production restraints in 1998. Since then the market situation has improved considerably.

Norway emphasises good relations to both consuming and producing countries. The consumer-producer dialogue that was started in 1991, as well as regular bilateral contacts, are considered important measures. In our opinion, exchange of views and information contributes to more stability in the energy markets.

For all petroleum provinces it is a challenge to make sure that the oil and gas sector remains attractive for investment and thereby prevent decline in the activity level and loss of key personnel and competence.

Active efforts by the companies and the authorities to bring costs down and adopt more efficient forms of organisation are vital. At the same time the environment must be safeguarded.

Without such efforts, the petroleum sector will not be able to meet increasing demands with regard to improved resource management and sustainable development. Eventually petroleum will lose out to alternative sources of energy.

The Norwegian Government is also preoccupied with the increasing importance of Norwegian involvement abroad.

In many respects, the Norwegian petroleum industry is facing a new era in that domestic investment is now probably past its peak. This reflects just as much a very high level of capital spending in 1998 as it does a future reduction. However, an expected decline in domestic investment will increase the significance of foreign involvement.

In the face of liberalised energy markets and the opening up of new and promising petroleum provinces, we do not only expect increased competition for investment, but also see a substantial market potential for petroleum related good and services.

While all majors and many other international companies are present in Norway, it is gratifying to see that both Norsk Hydro and Statoil are making their presence felt on the global scene. This is also the case for Norwegian contractors and service companies. Both foreign direct investments and exports have expanded sharply in the recent years, indicating that Norway's oil and gas industry has developed into an internationally competitive business.

This holds promise for the future, and I hope you will find this amply reflected at the WPC and the Exhibition. It is the ambition of this Government to contribute as a reliable, long term partner both on a government and industry level.

I am therefore very pleased that the Chief Executive Officer (CEO) of Statiol, Mr. Olav Fjell, is one of the plenary speakers at the Congress tomorrow (14 ^th> June). Likewise, I am proud of the active role played by Norsk Hydro in Canada – both in the upstream and downstream sector.

As for Canada, let me compliment our Canadian hosts for their hospitality and a wonderful show!

With these words, I once again wish you welcome. I hope you will enjoy the evening and look forward to future co-operation.

Thank you for your attention.