Address at Norwegian–Ukrainian Business Forum

Kiev, 18 November 2014

'We note and welcome the fact that Ukraine has started to purchase gas from Norwegian exporters. The gas sales agreement is a purely commercial deal, made possible by the pipeline connection between Slovakia and Ukraine and direct contact between exporters and importers. But it demonstrates how energy infrastructure builds energy security', said Minister Vidar Helgesen in his address at the energy session.

Minister Prodan, ladies and gentlemen,

  • It is a great privilege to address this parallel session of the Norwegian–Ukrainian Business Forum.
  • I would like to thank the organisers for facilitating the Forum and for emphasising the potential for energy cooperation between Norway and Ukraine.
  • Energy plays a key role in any society and economy. And we recognise the importance of new, effective energy policies for recovery and future growth in Ukraine.
  • Ukraine’s goals – to reform its energy markets, eliminate subsidies, achieve greater energy independence, diversify supplies and make energy production and energy use more efficient – are sound goals.
  • We look forward to seeing the goals turned into credible and sustainable plans that can attract interest and investment from a large number of companies and countries.
  • It is particularly important that a transparent regulatory system, in line with international standards, is in place from the outset.
  • We see no reason why Ukraine should not, in the medium term, move from being a net importer of energy to being self-supporting.
  • Ukraine’s potential for saving energy is considerable. And many energy sources are under-developed.
  • Enhancing gas recovery at existing fields is one important opportunity. Ukraine’s vast bioenergy resources and its potential for wind power, and so on, represent a solid basis for new development.
  • Norway’s own experience as an energy nation has shown the benefit of working with foreign companies. We have been able to attract foreign investment, while at the same time developing our own industries and management systems for the sector.
  • Transparency, competition, predictability and expertise are keywords in the Norwegian energy history.
  • As a result, we now have a world-class industry with top-notch companies.
  • Norway is the second largest exporter of gas to the EU and a significant contributor to European energy security. Last year, Norwegian gas production stood at 109 billion cubic metres.
  • We estimate that around two-thirds of Norwegian gas reserves are still in the ground, or rather under the sea bed.
  • We note and welcome the fact that Ukraine has started to purchase gas from Norwegian exporters. The gas sales agreement is a purely commercial deal, made possible by the pipeline connection between Slovakia and Ukraine and direct contact between exporters and importers. But it demonstrates how energy infrastructure builds energy security. In turn energy security contributes to building national security. We believe in interconnectedness politically and in energy markets. It is a win-win-situation, not a zero-sum game.
  • In addition to oil and gas, Norway has considerable renewable energy, in particular hydropower. On average we are talking about 130 billion kilowatt-hours.
  • Hydropower, bioenergy and wind will continue to grow in importance, increasing from about 60 % of our total energy balance today to a planned 67.5 % in 2020. These figures stand out in an international setting, and they highlight Norway’s position as an energy nation, not only with regard to resources, but also when it comes to technology, financing and market oriented policies.
  • Renewable energy is an important part of the answer to the threats of climate change. We are glad that Ukraine too has ambitious plans in this field, including modernising and changing its energy mix and reducing pressure on the environment. But much more needs to be done.

Ladies and gentlemen,

  • The successful presidential election in May and parliamentary elections in October, as well as the Association Agreement with the European Union and closer relations with many other international partners, means that Ukraine now has a historic opportunity to renew its society.
  • An improved energy sector that is well integrated into the international market could provide Ukraine with the growth engine it needs to lift itself out of economic distress.
  • Shaping the market will require time and political stamina, including a strong determination to remove old, dysfunctional and corrupt practices. But it can be done.
  • In her meetings with President Poroshenko and Prime Minister Yatseniuk today, Norway’sPrime Minister, Erna Solberg, will emphasise the potential for energy cooperation in our bilateral relations.

The Prime Minister’s key messages are:

  • Firstly, Norway will increase its financial support for energy efficiency in Ukraine, through the EBRD, the Nordic Environment Finance Corporation (NEFCO) and in cooperation with Norwegian and Ukrainian partners in the energy sector.
  • Secondly, we are prepared to share our experience of developing the Norwegian oil, gas and electricity markets and integrating them with the European Union. Such insights could be useful for Ukraine in its reform and restructuring of the energy sector, whether we are talking about unbundling state-owned companies or increased efficiency.
  • Thirdly, we intend to continue to support contact and cooperation between our respective industries and experts.
  • And finally, Norway is also increasing its cooperation with Ukraine in the field of nuclear and radiation safety.
  • This package of four main elements will be developed further in dialogue with our Ukrainian colleagues. Our increased support is meant to complement the assistance to Ukraine that is now being provided by the EU, the US and many other partners, including the five Nordic countries. Norway is part of a broad effort to partner with Ukraine.

Ladies and gentlemen,

  • We know from our own experience that energy can be an engine for change and development – if managed correctly.
  • Ukraine’s energy challenges can be turned into a powerful tool for transformation and growth.
  • We are both members of the European family, and it is in Norway’s interest to build a successful and mutually rewarding partnership with Ukraine. What takes place in Ukraine today is a question of Europe’s future. If Russia’s behaviour in Ukraine is rewarded, Europe will become a much more dangerous place. If on the other hand the choice of the Ukrainian people is respected, the values that made Europe free and prosperous will prevail. This is why Ukraine’s destiny is Europe’s destiny.
  • I wish you every success with the Forum. And I look forward to seeing deepened cooperation on energy between Ukraine and Norway.

Thank you.