"Technology development and internationalisation"

Dear audience, ladies and gentlemen!
First I would like to thank you for inviting me to BP – it is a pleasure for me to be here during this event.

The need for energy is increasing every year. Norway is in a very lucky situation due to the fact that we have so rich natural resources. We develop our oil and gas resources and in addition we also have renewable resources like water, wind, waves and sun. It is important for us to go after each opportunity to develop these sources – and to do so within the frames and objectives we have set. To make this come through we have to use all our creativity and also all our technical knowledge.

Our Government is very positive to the BP solar panel initiative. I therefore want to congratulate BP with their second solar panel installation in Norway. My boss, Mr. Olav Akselsen opened your first installation last summer in Trondheim – I am pleased to have the same honour here today.

The solar panels are installed several places in this building. The average effect is estimated to 10 500 kilo watt hours, being approximately half the consumption in an average Norwegian house hold.

The cost of this installation is approximately 1,7 million kroner. I am pleased to see that an oil company invest money also in re-newables. I am pleased to push the button and start the energy production from these solar panels.

Now, let's move to today's main topic: Technology.

It is positive to see that technology companies, research institutes and Government representatives gather with large companies to discuss the future, both the challenges and the opportunities.

Looking two years back, the situation for the oil companies and the supply industry was totally different from today. The industry itself has contributed in a good way – and so has the Government. We have been in position close to 1,5 years, and during this time we have been working hard to make sure this important industry came back in a healty and a positive, forward-looking position.

I am therefore very pleased to see that the oil and gas industry is now doing very well.

But, ladies and gentlemen, this should no way be an excuse for not continuing the development and use of new technology. This area will be important as we continuously face new challenges, both on our continental shelf and internationally. Our Government therefore takes an active approach to these matters.

The main goals for our Government is:

• to enhance value creation on the Norwegian Continental Shelf
• and to maintain and further develop a sustainable petroleum industry based in Norway.

By constantly upgrading our technology we can better exploit our resources. Thus, we create a foundation for increased income for the companies and for Norway. This way we will still be able to upgrade the welfare for the people living in our country.

In my mind there is no doubt that the oil and gas industry has a good chance to capture a bigger share of the international market. To succeed in the international market, there is a need to develop new technology.

The challenge for our Government and also the industry is to make sure that technology developed in Norway can be commercialised for use in our export markets as well.

Norwegian technology today
Our domestic market is for sure a demanding one. Over the years the oil companies operating in the North Sea have been used to finding new solutions by stimulating research, not only in the technological mainstream, but also at the very edge of technology. The operators on our shelf have also shown a remarkable ability and willingness to make use of new technology.

Operating in a technology-driven domestic market has made the Norwegian supply industry worldwide leaders in several areas. The Norwegian subsea suppliers are examples of how the Norwegian industry has been a driving force in technology development on a global scale.

However, there is still much to play for:

• We have produced only 20 per cent of the petroleum resources
• and there is an international market potential for Norwegian petroleum related goods and services amounting to some 1600 billion NOK annually.

Therefore, I find it instrumental that our Government plays a role in catalysing technology development. The Ministry of Petroleum and Energy supports several initiatives stimulating the development and use of innovative technology as well as promoting exports to the international market.

I'm going to talk about four of these initiatives today – "Top-leader forum", OG21, Demo 2000 and Intsok.

"Top-leader forum"
A forum for top-executives was introduced in September last year. The Minister of Petroleum and Energy, Mr. Olav Akselsen, chairs the forum, which consists of approximately 20 top-executives from the oil-companies, supply industry, labour organisations and authorities.

The goal of the "Top-leader forum" is to:

• Strengthen the competitiveness of the Norwegian Continental Shelf in order to make sure that it will continue to be an attractive area for investments,
• and to strengthen the competitiveness of the Norwegian supply industry both in the domestic market and internationally.

Through this forum we link together all the main players in the petroleum sector. Thus, it contributes to strengthen the entire industry chain. The forum debates issues of strategic importance to the future of the petroleum industry. It has among other things launched projects and working processes relating to research and technology development, internationalisation and national competence building.

OG21
The Ministry of Petroleum and Energy has initiated a project to create a national strategy for a more co-ordinated and focused approach to research and development within the oil and gas sector. The project is called OG21 and focuses on two dimensions: value creation and competitiveness. This is to be achieved through enhanced cluster performance in dynamic technology networks. The work is carried out by representatives from oil companies, the supply industry and research institutes.

A strengthened research technology development on the Norwegian Continental Shelf will also have a positive impact on the environment. For instance, considerable environmental benefits are tied to the industrial use of natural gas from the Norwegian Continental Shelf. A third dimension in this programme is therefore a long term environmental focus.

Use of Gas
In this context, I would like to mention that our Government is very positive to increased use of natural gas in Norway because it provides additional opportunities for Norwegian industry as well as environmental benefits. There are three main areas for use of gas in Norway:

• For energy purposes,
• in the transportation sector
• and industrial use.

Natural gas can of course be used as fuel, for example for ferries, busses and supply boats. The transport sector provides a good example of how use of gas will have environmental benefits. Recently our Government entered into an agreement with one of the oil companies concerning use of LNG instead of diesel on two new supply boats. This is a good example of how our Government takes a leading approach to environmental protection in this area.

On these new boats the NOx emission will be reduced by approx. 80 % compared to conventional diesel engines, and it will be an important contribution to meet Norway's obligations in relation to the Gothenburg protocol.

Demo 2000
The Demo 2000 programme is a joint development program between oil companies, the supply and service industry, research communities and the authorities. The role of the programme is to bridge the gap between R&D projects and implementation, thus aiming towards three main goals:

• New field developments on the Norwegian Continental Shelf through new and cost effective technology,
• increased security of execution within budget and plan,
• and that new Norwegian industry products should contribute to the development of the international market.

In other words - Demo 2000 focuses on qualification and demonstration of new technological solutions. It is based on close collaboration between suppliers, research institutions and oil companies and involves prototype development and testing, deployment and pilots.

So far, development projects totalling close to USD 100 mill. have been launched within the most important technology areas of offshore exploration and production. One example is FMC Kongsberg Subsea AS, and concerns a riserless, subsea wireline intervention system (Light Well Intervention).

Several of the projects demonstrate considerable cost savings for platform- based development and field management.

Intsok
The goal of Intsok is to strengthen the long-term basis for value creation and employment in the Norwegian petroleum industry through focused international activities. The basis is the considerable competence and competitiveness that Norwegian oil industry has developed as a result of large and complicated projects on the Norwegian Continental Shelf.

The long-term goal of Intsok is to double the export value from the Norwegian oil and gas industry within 2005 – that is to reach about 50. billion NOK.

This goal is definitely realistic, but requires a constructive long-term co-operation between all players in the petroleum sector, including the government.

Intsok has almost 80 member companies, and represents approximately 90 percent of the value creation within the Norwegian oil and gas sector. By combining the competence that both the large and small member companies represents, Intsok do market the Norwegian oil and gas industry as a world class cluster.

The Norwegian supply industry is dominated by the three companies ABB, Aker Maritime and Kværner, but the industry also consists of a high number of small and medium sized companies, of which approximately 85 % have a turnover of less than USD 30 million. These companies also represent a large value creation potential. R&D efforts in these small and medium sized companies are therefore extremely important.

Intsok has gone through an active and eventful period since it was established in 1997. It has confirmed its role as the central institution in the task of strengthening the export of Norwegian oil and gas technology and competence.

Intsok has established several regional networks where partners can meet to exchange experiences and to discuss marketing strategies and new initiatives. Intsok also organise delegations and seminars to the most important markets and help receiving delegations to Norway. Altogether, this has increased the exposure of Norwegian products, technology and competence to the international market.

Conclusion
Ladies and gentlemen, Norway is still an attractive place for development and use of new technology. It is important to maintain and even strengthen this position. One mechanism is to ensure that new operators or licensees on the Norwegian Continental Shelf, is made aware of the desire to develop technology in Norway that later can be exported.

The Norwegian Continental Shelf is among the leading in the world when it comes to making use of innovative technology – there is nothing indicating that this technology should not also be developed in Norway.

There are many examples of international companies that choose to develop their technology in Norway. Among these are ABB, Siemens and FMC. The reason is mainly what characterises the Norwegian oil and gas market – stability, highly educated labour and the willingness to try out new technology. Faced with competition from other technology centres, like Houston, it is important to increase oil and gas related research in Norway.

The petroleum sector's ability to face the challenges both on the Norwegian Continental Shelf and internationally is dependent on a good and effective interplay between the industry, research institutions and the government. Such an interplay will also secure focus towards challenges and needs on one side and access to competence, ideas and technology on the other.

I have been looking at the list of participants and want to express how impressed I am so see the number of people and companies represented here today. I want to encourage all of you to continue contributing to the development of leading-edge technology in Norway. I will also take this opportunity to compliment BP for this positive initiative.

Ladies and gentlemen, I wish you all a useful and innovative day!
Thanks for listening!