Yours Excellencies, Ladies and Gentlemen,

Current oil and gas prices clearly signal a change in the perception and outlook for our petroleum industry. Today's high prices are to a large extent demand driven and there is still a huge uncovered need for energy among the world’s growing population. Access to energy is a precondition for economic and social development. In the transport sector there is no alternative to oil for the time being.

Consumption and production of energy cause serious harm to the environment. The evidence of climate change is clear and we have to take action now.

There is also a growing concern about energy security as the import share in major consuming countries is growing well beyond 50 % and reserves become more concentrated.

On the other hand, we know for a fact that our energy system will depend on oil and gas for very many years to come.

Our challenge is therefore to secure a stable and predictable flow of energy at affordable prices taking into account that today's actions and decisions are part of a sustainable development.

In addressing this challenge I think the most significant contribution we can make is to assure that our oil and gas resources are exploited and used in the most efficient and benign way possible.

Both producers and consumers have important roles to play in this quest. Representing a producer country I will not dwell on the demand side of the equation. But you are all aware that there are many policy options that can be pursued by consumers, and which could over time improve efficiency and reduce the environmental footprint of the fossil fuels.

The supply side is not static either. Producers have a common interest and obligation in assuring that sufficient supply will be available for the energy needs of the consumer.

I think the concentration of reserves highlights the importance of the investment and operating environment in producing countries. A stable, predictable and transparent investment and operating environment is significant for energy security. As such it will serve to diminish the scepticism that exists about oil exporter’s ability to expand production capacity in a timely manner to meet growing demand.

I will not be specific about which characteristics a transparent and efficient upstream system needs. Different system can work well, and it is my firm conviction that every oil producer has to find its own way.

Instead, I would like to illustrate the potential for improvements by a couple of examples.

We know that in the years ahead, much of the oil and gas supply will be produced from existing fields.

Our first objective should therefore be to recover as much as feasible from these fields. It is surprising to learn that under existing economic and operating condition only one third of the oil in place in discovered field globally is expected to be produced. If we could improve the recovery rate from all these fields with only one percent we would get 36 billion barrels of more oil. That represents 5 years of oil consumption in the US.

Such a gain is probably not very ambitious. In some cases we have already seen that it is possible to double recovery rates.

Gas and oil producers must also respond to the environmental challenges. I believe carbon capture and storage is an option we must pursue. This technology has the potential to purify fossil fuels and at same time increase oil production, if used for increased oil recovery.

The Norwegian government has ambitious goals for capture, use and storage of carbon dioxide in Norway. The technical potential for using CO2 for enhanced oil recovery and for storage purpose in the North Sea is substantial. There are still economic and technical challenges with this technology.

The goal must be to establish a carbon value chain. That is, to convert carbon dioxide from an environmental problem to a tool for value creation.

In Norway, Shell and Statoil have recently signed an agreement to work towards developing the world's largest project using carbon dioxide for enhanced oil recovery offshore. The concept involves capturing CO2 from power generation and utilising it to enhance oil recovery, resulting in increased energy production with lower CO2 impact. The government support this project. This project could be an important milestone towards our vision for greener fossil fuels.

Carbon is really the only remaining environmental problem associated with oil and gas. Carbon capture and storage is a technology that needs the support from oil exporters. We must be leaders, not laggards in this respect.