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Gro Brækken’s speech to the Norwegian Oil and Gas Association’s
annual conference for 2014 (to be checked against delivery)
Boundary busters
Welcome to the 2014 annual conference of the Norwegian Oil and Gas
Association. I have been looking forward to this day, because we
have a lot to present.
A great deal has occurred since we were last gathered here in
2013.
 The level of activity in the industry remains high.
 And things appear to be really getting going in the far north.
The Barents Sea is now the area of the NCS where expectations
for remaining resources are at their highest
 It is important and gratifying that the companies on the NCS
are showing such great interest in participating in this
exciting region.
Many highly interesting developments have also occurred
politically.
We have acquired a new government and a number of new
representatives in the Storting [parliament].
Challenges
At the same time, we are receiving constant reminders of climate
change. This is the biggest global challenge of our age. The
climate challenges are real, and we are part of the problem. But
we’re also a route towards the solution, because the world needs
Norwegian oil and gas – including in relation to the climate
issue. Norway’s natural gas can help to a greater extent to reduce
greenhouse gas emissions in Europe and replace the steadily
increasing use of coal which, of course, we know to be the biggest
source of fossil-fuel pollution.
So we believe that Norwegian gas is part of the solution to
the climate challenge.
 For this to succeed, we need to maintain stable and
predictable production.
 And if we’re going to manage that, we need access to new
acreage in a long-term perspective with stable operating
parameters.
 I’m thinking then of the northern Barents Sea.
 And I am thinking of the waters off Vesterålen, Lofoten and
Senja.
Because Norwegian competitiveness is under challenge. We
cannot repeat too often that our industry has a long-term
perspective, given all the years it takes from discovery to
development of a field and recovering our national petroleum
resources. We will work actively and intensively to create the
greatest possible predictability for the industry.
We need a more open market for rigs on the NCS. Because we see
that our costs are substantially higher than for our British
neighbours to the west. Norway has too many special rules today
which clearly boost costs. We will get to grips with this.
Sudden changes to the tax regime create disquiet, as happened
under the previous government. They have a negative effect on the
whole industry.
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Or what about the regulations? One example: are we on the
right track when new lifeboat regulations will cost society
several tens of billions of kroner. Are the costs proportionate to
the benefits? The answer is no.
At the same time, we must address our own industry standards
and the way they are applied.
 Have we introduced too much bureaucracy to projects which
could have been executed more simply and cheaply?
 Are our cost/benefit assessments when establishing and
amending standards good enough?
 Are we make sufficiently effective use of resources when we
require 20-50 per cent more engineering hours per barrel of
oil produced today than we did 10 years ago?
 We must do something about this. And we’re going to do it –
both the companies and the industry association.
We’re now entering a period of pay negotiations. We believe
the talks are likely to be tough this year. The unions have warned
that they will demand both rises and the incorporation of pension
provisions in pay agreements. That will demand higher pension
payments than today’s system can provide, and reduce the ability
to make necessary changes.
We’re dependent on everyone accepting responsibility for
moderate wage formation in this year’s settlement. That applies to
us as an industry association, to the unions and to the companies.
It’s now important that we don’t undermine the competitiveness of
the NCS. Other petroleum provinces around the world could then
secure the best companies and the best people to do this important
work.
A big debate has recently been conducted on supplying power
from shore to the NCS. This could be an important instrument in
reducing emissions from Norwegian offshore operations.
 We agree that all new fields must be reviewed with an eye to
opportunities for power from shore.
 But power from shore must only be adopted where it is
appropriate.
 We can’t use power from shore regardless of its cost.
 We must be sensible and look at costs in relation to the
effect of power from shore.
 We’ll then be managing our common resources in the best way.
The solution now chosen for power from shore on Johan Sverdrup
will reduce total carbon emissions from the Utsira High by 60-70
per cent.
So it’s both surprising and a little disappointing that such
one-sided demands have made for the other fields on the Utsira
High to be based on power from shore.
Because Johan Sverdrup is a unique field.
 Once on stream, it will account for about a third of Norwegian
oil production.
 The field will yield huge value for the community over the
next 50 years.
 We can’t emphasise strongly enough the significance this will
have for Norwegian value creation, industry and jobs.
And that was precisely our theme last year. Under the heading
of industry builders, we highlighted the significance of our
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industry for the country. How it creates companies and jobs for
250 000 people in every one of the counties in our far-flung land.
We’ve busted many boundaries over almost 50 years of operation
on the NCS. At that time, we were a country good at shipbuilding
and shipping. Our emerging oil nation would soon have need for
that knowledge and expertise.
 At early as 1967, the year after Ocean Traveler arrived on the
NCS from the Gulf of Mexico, Akers Mek Verksted in Oslo built
its sister rig Ocean Viking.
 This Norwegian-built unit was not completely like its sister.
Because it soon became clear that the American Ocean Traveler
could not cope with the rough weather conditions in the North
Sea.
 The Norwegian-built Ocean Viking was accordingly modified and
improved.
 The NCS had already challenged us. We had already learnt. We
were already doing things better.
And Ocean Viking opened the door to the Norwegian oil
adventure.
Since then, we’ve overcome the challenges presented to us by
the NCS. Oil companies and suppliers have honed their skills on
the challenges in the North Sea, and later in the Norwegian and
Barents Seas as well.
Examples of this include
 crossing the deepwater Norwegian Trench with the Statpipe gas
line
 floating production platform on Snorre
 horizontal wells on Troll
 water injection on Ekofisk
 subsea installations and production ship on Åsgard
 multiphase transport and remote control on Snøhvit and Ormen
Lange
 and subsea separation on Tordis.
These are all examples of knowledge and technology
developments which have contributed to huge value creation from
the NCS. This expertise and technology have also become important
export commodities to other petroleum provinces.
But we have bust boundaries beyond the industrial level, too.
Government regulation of the NCS and the way Norway manages its
financial assets have also been exported to petroleum provinces
elsewhere.
Many years of oil and gas production have given the country
experience of administering these resources in a way which
promotes sustainable economic growth and prosperity for the
population as a whole. Norway shares these experiences with other
countries through its Oil for Development programme.
State secretary Hans Brattskar will be talking more about that
later today.
Former president and Peace Prize winner José Ramos-Horta was
scheduled to join us, but has unfortunately been prevented from
coming here today. But he has sent us a greeting where he gives
more details about the long-running petroleum collaboration
between Norway and East Timor.
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This country has not least established a petroleum fund on the
Norwegian model.
We’ve come a long way during these first 45 years. But we’re
still not halfway. Some people nevertheless ask what Norway is
going to live off after the oil. It’s difficult to predict the
future. But I’m confident that much of what we are going to live
off will originate from the oil industry.
I said at this conference last year that it’s an
insufficiently communicated fact that a number of other industries
are also benefiting from Norwegian inventiveness. What we come up
with has a big transfer value.
We’ve therefore collaborated with Rambøll to prepare a report
on technology transfers from the oil and gas sector.
 We’ll presenting and distributing the report towards the end
of the day.
 It provides some examples of the way technology developed for
the oil and gas industry busts boundaries and crosses over to
other sectors.
 The report includes 26 examples of such specific technology
transfers.
The oil technology industry is Norway’s (very) biggest
mainland industry, and the second largest in the country after
petroleum production. This sector employs almost 200 000 people in
4 000 companies and has an annual turnover of more than NOK 360
billion.
Extensive innovation and technological development are pursued
in the oil technology companies, and is utilised both on the NCS
and in the rest of the world.
While these companies have exported their technology and
products to other countries and new markets, their solutions have
also been utilised in other industries.
Let me give you some examples.
Knowledge and technology from the concrete platform era in the
1970s is proving very beneficial for building bridges.
 Slipforming techniques originating from the Norwegian offshore
industry are being used to construct the 1.5-kilometre
Hålogaland Bridge in Narvik.
 It was Norwegian Contractors which developed the Condeep
platform concept in 1973.
 This involved slipforming giant concrete gravity base
structures in dry conditions before they were lowered to the
seabed.
Take a look, too, at the Hugin autonomous underwater vehicle.
This provides an example of the way the oil and gas sector has
common interests with other industries.
 Hugin was developed jointly by Kongsberg Maritime, the
Norwegian Navy, Statoil and the Norwegian Defence Research
Establishment.
 It can operate autonomously, without remote control from a
surface vessel
 Hugin represents a big improvement in efficient and accurate
seabed mapping for the offshore industry.
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
For crew on minehunters, Hugin creates a sense of security
because it can explore a potential minefield while the vessel
remains at a secure distance.
Another example is Rambøll, which had to think along new lines
to survive in the offshore sector during the late 1980s.
 It developed small, cost-effective monopile platforms
supported on a single column.
 These structures were so small that they could be installed
directly from the drilling vessel after the wells had been
completed.
 The first monopile platform was installed in 1989.
 And when the concept of installing wind turbines offshore
emerged in the late 1990s, it became clear that these support
structures could provide suitable foundations.
Later today, you will also be hearing more about how Verdande
Technology in Trondheim has developed a monitoring system which
was initially aimed at the oil and gas industry.
 The system has proved to have a number of applications, and is
used today in such areas as surveillance of financial
transactions and heart patients.
 In other words, the system is currently in use by both health
and financial sectors.
 Where the health sector is concerned, Verdande has a project
to develop a system in cooperation with Houston Methodist
Hospital, one of the USA’s leading heart clinics.
 This solution collects sensor data from patients, monitors
symptoms and compares these with earlier events.
 The system has also proved useful for financial services.
 It has been used, for example, by stockbrokers to check
whether customers are taking more risks than they should.
You will (also) be hearing about Flumill in Arendal, which
coverts tidal currents into electricity. A broad range of
technology and experience has been taken from the petroleum sector
to develop these massive turbines.
 Everyone working on this at Flumill has experience from the
oil industry, which has been important for the project.
 This embraces a broad range of solutions, including seals and
preservation solutions for the turbine.
 (But) the key knowledge has involved the turbine mooring.
 To function as intended, the turbines depend on reliable and
stable attachment to the seabed.
 The oil industry has long worked with subsea mooring on the
NCS, and Flumill builds its mooring solution and technology on
experience from Norwegian underwater technology and
innovation.
We’ll be taking a peek at outer space as well today. Zaptec AS
has developed mini-transformers for use in oil wells.
 Based on this technology, the company has developed charging
stations for electric cars which are due to be introduced this
year.
 But Nasa has also shown interest in Zaptec’s solutions.
 The high voltage from the transformer is incorporated in a
plasma-based drilling system which Nasa wants to deploy on the
Moon, on asteroids and on Mars.
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
This initially involves prospecting to map minerals,
geological structures and water deposits on Mars and to search
for traces of life below ground.
 In the next phase, drilling could be relevant to produce and
process resources in outer space, particularly from the Moon
and asteroids.
Such crossover of technology, knowledge and production methods
from one industry to another is known collectively as technology
transfer.
It ensures that innovations benefit a broad range of products
and people worldwide.
Our innovations are busting the boundaries of the possible.
Spin-offs are being created in the space sector, medicine and
research, but we still can’t predict all the benefits the
technology and knowledge we’re creating will have for society and
for industries we don’t yet know about.
And the technological progress is being driven by the
challenges on the NCS. A high level of activity is the engine
which generates the power to bust boundaries.
 Offshore, we’re drilling ever longer wells and dealing with
deeper reservoirs further from land and in ever deeper water.
 Knowledge transferred from foreign companies in the 1970s and
1980s has led to continued development of in-house expertise
at Norwegian oil and supplies companies.
 Field developments from Ekofisk to Goliat have presented
enormous technological challenges, which have been overcome in
such locations as Asker, Kongsberg, Trondheim, Bergen,
Stavanger and Oslo.
 The NCS has become a technology laboratory, creating big spinoffs in the form of knowledge communities, quality education,
new company formation, many jobs and huge export earnings.
Because, as with Tesla for electric cars, Apple for consumer
electronics and Nasa for technological progress, the petroleum
industry plays a key role in all scenarios for future energy
supplies.
We are part of a global technology industry which is moving
the world forward.
My message today is that we face big opportunities and big
challenges.
 The job on the NCS is far from over.
 Much remains to be recovered from existing fields.
 Known reserves are to be developed.
 And we must explore new areas.
Because the world needs energy. The IEA estimates – in its
green scenarios – that the world’s energy mix will still need to
contain about 35 per cent oil and gas in 2050 to meet steadily
growing global energy requirements. That means maintaining 90 per
cent of today’s petroleum deliveries. So the contribution from oil
and gas is still necessary and important.
And it’s crucial then that we manage to maintain Norwegian oil
and gas production at a leading technological level with great
scope for innovation.
This will also contribute to meeting the biggest challenge of
our age – climate change. Because while Europe is making a big
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commitment to developing renewable energy in order to reduce
greenhouse gas emissions, low prices for carbon emission
allowances and cheap coal mean that European coal consumption is
rising, and that what we gain on the swings we lose on the
roundabouts.
This means we have good support for our views about the
importance of natural gas, including from Norwegian and other
European politicians.
At the same time, people are very impatient that we must do
something ourselves, here in Norway, and this represents a
pressure and an impatience – reflected in part in the climate
comprise – which we must relate to.
We know that natural gas is the long-term solution which
provides the maximum climate benefit in interaction with wind and
solar power. From that perspective, what is good for Norway is
also good for Europe and the world.
It is accordingly important that we work hard to ensure a good
finding rate, so that we can continue to maintain a stable level
of production.
Our technology and our expertise will and must play an
important role in determining the best way to recover the
resources both in deep water and in more challenging climates.
That’s when the opportunities will come. That’s when
innovation will happen. That’s when we become part of the
solution.
We’re boundary busters because we are Norway’s most important
technology industry and Norway is a leading offshore nation for
developing new technology and new solutions.
We’re boundary busters because clever and creative people and
companies in our industry see opportunities to develop and apply
advanced knowledge gained offshore in completely new ways. They
see entirely different applications than oil and natural gas
production.
Many of the opportunities for continued development of the
Norwegian knowledge society lie here:
 in offshore oil and gas
 in industries I’ve given examples of here
 and in applications we still don’t know about.
Thank you for your attention