NACC Seminar, OTC

Ladies and gentlemen,

Good afternoon.

I’m honoured to be here in Houston and Texas for the first time - a natural destination for any Norwegian State Secretary of Petroleum and Energy.

I have enjoyed my visit so far, and I am impressed with what I have seen at the exhibition.

I will start with complementing NACC for organizing this luncheon, and for getting such a great speaker here today!

I am sure everybody is looking forward to hear David O'Connor's presentation on BP's Global Project Portfolio and activities.

Operators like BP have been instrumental in taking the Norwegian Supply and Service Industry to international markets.

The Norwegian service and supply industry has had a steady growth in international markets from the mid 90-ties until the downturn in 2013.

This growth was possible because of a strong focus on innovation and technological developments Norwegian Continental Shelf, and a good collaboration with the supermajors present on the Shelf - this collaboration kind of "qualified" Norwegian companies for international contracts.

Anyhow, it has been a few challenging years for the oil and gas industry globally , but it looks like 2019 is going to be a better year with the prospect of many new offshore petroleum projects being sanction worldwide.

So, in that perspective, we are looking forward to O'Connors presentation on BP's activities.

I will use this opportunity to give some highlights from Norway.

The activity level on the Norwegian shelf has been high in recent years. At the end of 2018, 83 fields were in production, and 14 field developments were ongoing.

In addition, large investments have been made in producing fields to improve recovery.

Production is assumed to increase from 2020, and is estimated to be close to the record-breaking year 2004, in 2023.

It is expected that the ratio between produced gas and liquids will remain roughly equal in the next few years.

While mostly oil was produced in 2004, gas will account for about half of the production in 2023.

In the longer term, the number and size of new discoveries will be of crucial importance to the production level.

We didn't just discover oil 50 years ago. We also developed a highly competitive service and supply industry.

As some of you may know, technology transfer from Houston was essential to the Norwegian oil industry in the 1970's.

It was an important foundation, for developing our own offshore technology.

What is perhaps the main symbol of the Norwegian offshore achievements, has been the development of subsea technology.

It is also a technology, which proves that "necessity is the mother of invention".

High costs and low oil prices in the end of the 80's gave a push for the technological breakthrough of subsea solutions, as it had the potential to:

• Lower costs
• Increase production
• And getting to the deep sea resources out of reach for conventional platforms.

Since then, Norwegian subsea technology has continued to evolve.

Today it is an industry recognized as:

• World leading when it comes to expertise and solutions for deep water operations in challenging conditions,
• In addition, the industry has highly competent people, a focus on research and development and a willingness to adapt.

The main message however, looking at the big picture, is the same as when subsea technology was in the cradle:

It is about turning natural resources into value and welfare, and doing it in a safe, efficient and emission reduced manner.

In achieving this, we are not having a problem, just a few challenges. And - as we saw with the birth of subsea technology - with challenges comes solutions.

I would like to highlight a few examples.

One example of quantum leap in subsea technology is subsea compression. Equinor is currently running two compression projects

on the Norwegian shelf that is expected to increase the recovery rate and extend the life cycle of the fields in a cost effective manner.

And, not to forget digitalization, automation and robotics, which is becoming increasingly important. Not only in general, but also for the subsea industry.

It is about making things smarter, safer and easier.

The Norwegian subsea industry also takes part in this development. Such as big data.

Oil and gas installations generate enormous amount of data, through thousands of sensors. There is a great potential to improve processes and develop new solutions by using these data.

Or automation and unmanned platforms remotely controlled from land. This was a reality when the control room of the first unmanned platform on our shelf – Valemon – was opened in 2017.

We think it is important not just to invent new technology, but to actually test it and use it offshore. That´s when you get actual results.

In this context, DEMO 2000 is a Norwegian research program that stimulates close cooperation between the supplier industry, oil companies and research institutes. The aim is to demonstrate and qualify new technology for upstream oil and gas activities.

I would say that this program has been quite successful and has fostered not only new technology, but also Spotlight-award winners at the OTC.

This year, there are 3 technology winners with grants from DEMO 2000. XSENS - producer of Ultrasonic Clamp-on Flowmeter (XACT), Siemens - producer of Subsea Power Grid, and NOV - producer of Subsea Automated Pig Launcher (SAPL).

In addition FutureOn, another Norwegian company received the OTC-Spotlight-award for their cloud-based, collaboration application, FieldAP.

As the theme of this year's OTC is "the next 50 years of offshore developments", let me assure you that the Norwegian subsea industry has what is required to be your partners now, and in the future.

Thank you for your attention!