It has been truly rewarding to take part in this event. I have not spent many days in office, but it did not take long to see the potential for further energy co-operation between our two nations. A quick glance at the map really says it all. I think this seminar demonstrates that both nations can profit from collaboration – and that we have also made good progress over three decades.

Today, we have benefited from some presentations and insights into the global challenges of the oil and gas industry. I would like to share with you some perspectives as seen from my point of view. I would like to start with some comments on the oil and gas markets.

Oil market
The crude oil price has been on a rising trend in recent years. At 60 US dollar it has reached a level few could have imagined only a year ago. A number of factors have contributed to this strong rise:

• Oil demand resilience against high oil prices
• Relatively weak growth in non-OPEC supply
• Low reserve capacity within OPEC
• Supply risk in several major producing countries
• Tight refining capacity

High crude oil prices - spot as well as long term prices - signal a need to expand upstream capacity. One can argue that today’s price level is the result of underinvestment in energy infrastructure over several years.

It will take time to change this. Oil demand is expected to grow relatively fast, particularly in countries like China and India. Besides, demand will be particularly strong in the transportation sector where there are no realistic alternatives to oil in the foreseeable future.

OPEC will have to supply most of the new capacity needed to meet growth in oil demand. But it is important that Non-OPEC countries too, expand production. This could be a challenge. Oil production outside OPEC has for several years grown at a rather slow pace, despite being stimulated by high oil prices. We see rising E&P costs, fewer large discoveries and declining production in major producing provinces, such as the North Sea. This has led many to believe that future expansion of production outside OPEC will be more difficult and more expensive than before.

Thus reasonably high oil and gas prices are necessary to stimulate non-OPEC supply. However, the world does not only need not increased supplies, but also stable supplies of oil and gas. And they need to come from a variety of sources, which is key to energy security.

Gas market
In this respect, I would like to mention that gas is expected to become increasingly important in the energy mix, both short and long term.

The fact that the Norwegian Continental Shelf is located closely to the market puts us in a very fortunate position compared to other suppliers. In the EU, increasing demand and declining production together create a growing need for new gas supplies.

Today Norwegian gas makes up 14 percent of the total European gas consumption. Both remaining resources and our gas infrastructure will enhance Norway’s role as a stable gas supplier. We expect gas exports to increase to a level of 120 billion cubic meters within 2011.

In addition, Norway will pursue opportunities in the LNG market as demonstrated by the Snøhvit project. Gas to liquids and LNG are markets evolving rapidly making natural gas a global commodity. This will no doubt add to the significance of gas in a long term perspective.

Climate
Now a few words on the climate challenge:

The use of fossil fuel stands for a large share of the global emissions of greenhouse gases. According to a business as usual scenario made by the International Energy Agency, energy demand is projected to rise by over 60 % up to 2030. By then, more than 80 % of the energy sources will be fossil fuels. The negative environmental effects of continued use of fossil fuels will have to be dealt with. Limiting CO ₂ emissions from energy generation is key to reducing emissions of greenhouse gases. Carbon capture and storage could play an essential role in the development of a more sustainable energy system in the medium to long-term.

The problem is global, and the solutions can only be found through combined efforts at the international level. Norway has an ambitious policy to reduce emissions of greenhouse gases, and climate challenges are high on the agenda for the new Government. United Kingdom's effort to address the issues of climate change through the presidency of G8 and the EU is commendable.

Technology – response to global challenges
In order to handle global challenges such as security of supply and safeguarding the environment, technology development is essential.

Considerable efforts in research, development and deployment of new technologies must all be part of our energy policies.

Take the climate challenge. Carbon capture and storage will have to be developed as a viable option. To achieve this, technological development is needed to bring down the costs of capturing CO ₂.

In an effort to speed up this development, Norway established a new state entity called Gassnova. The aim of Gassnova is to support pilot projects which can facilitate faster development and deployment of CO ₂ capture and storage technologies in connection with gas power production. To achieve this aim, Gassnova has the returns of a two billion NOK fund at its disposal.

However, Norway cannot solve the issue of carbon capture alone. We need to join forces with international industry, research institutions and other governments. Consequently, Norwegian research institutions participate extensively in EU co-funded research projects in the area, and the Norwegian Government participates in the Carbon Sequestration Leadership Forum.

Furthermore, the Ministry of Petroleum and Energy participates in an informal governmental forum on CO ₂ for enhanced oil recovery, joined by Denmark, the UK and the EU-Commission. The Netherlands and Germany have also been invited to participate in this forum.

Technology development is vital to ensure to increased supplies of oil and gas. It is also a key to develop the petroleum sector of Norway at large. This has made the government establish a strategy initiative called Oil & Gas for the 21 century or OG 21. Started in 2001, all major stakeholders are involved in OG21, ranging from universities to oil companies. The task is to create a concerted R&D strategy for the Norwegian petroleum cluster.

To extract maximum benefit from OG21, we need to see research and technology development in a global context. This is why we also involve international players - among oil companies and suppliers - and try to develop solutions that are applicable worldwide.

UK –NorwayCrossborder Co-operation
Relations between Norway and the UK are close – and increasingly so in the energy sector. This is evident from the new framework agreement on cross-border petroleum co-operation.

Its completion was a significant achievement and marks a milestone in the energy relations between our two nations. It is an important building block in our co-operation initiative that has proved to be very fruitful so far.

I believe the agreement paves the way for an increased activity level in our common North Sea corridor for many years to come. Indeed, a number of projects are already well underway: The two pipelines Langeled and Tampen Link will increase the gas transportation capacity from Norway to the UK to more than 3 times what it is today. In addition to these pipeline projects, several cross-border field developments have been approved: Boa, Playfair, Enoch, Blane and Statfjord Late Life.

I am very pleased with what our two countries have achieved to date and I am eager to strengthen the bilateral co-operation between Norway and the UK. Today's presentations show that the industry creates the foundation for a promising future.

Thank you for your attention