Ladies and Gentlemen,

It is a pleasure to be here today.

I trust you all have had a fruitful first session of this important meeting place for the oil and gas industries of our two countries. This conference aims at providing some answers to the common challenges that both the Norwegian and Russian oil industries are faced with in the exploration of hydrocarbons both on the Continental shelf and onshore in Northwestern Russia. At the same time, the conference is a confirmation of the excellent relationship between Russia and Norway in the energy sector.

Russia as an energy nation is important from a Norwegian point of view. This is both due to the fact that we are neighbouring countries, and that we are both major producers and exporters of oil and gas. Second only to Saudi Arabia, our two countries are the largest oil exporters in the world. Thus, we are both interested in oil price stability at a reasonable level.

The Russian and Norwegian Government relations within the energy sector have been intensified over the last years, through a strengthening of our energy dialogue. On the basis of the Memorandum of Cooperation between the Ministry of Petroleum and Energy of Norway and the Ministry of Fuel and Energy of the Russian Federation of 1 July 19992, our two nations have now manifested their desire to develop the energy dialogue further.

• Thus, I signed two Cooperation Programs 2002 on behalf of my Ministry – one with the Russian Ministry of Energy and one with the Russian Ministry of Natural Resources. Today, a third and final Cooperation Program was signed between myself and German Gref, your Minister of Economic Development and Trade this morning.

• The joint declaration signed by Prime Minister Bondevik and President Putin on 12 November 2002 underlines the importance the energy dialogue between Norway and Russia.

Both the Cooperation Programs and the Joint Declaration stipulate that our two countries should aspire to:

• develop the bilateral cooperation on the energy sector to the mutual benefit of both countries

• contribute to the realization of commercial cooperation on the energy sector by encouraging the active interplay between Norwegian and Russian companies with regard to exploration for, and production of hydrocarbons.

• The energy dialogue also concerns issues like resource management, environmental issues and safety, technology exchange, oil and natural gas markets, and issues related to energy policy and legislation.

An energy working group consisting of Norwegian and Russian representatives of both the Government and the oil industry has also been established under the auspices of the energy dialogue between Norway and Russia and in accordance with the statement made in the Joint Declaration between our State leaders on 12 November 2002. The aim of the Energy Working Group is to promote the realization of projects for cooperation between the oil and gas industry of both countries on a commercial basis, as follows:

1. To assist the commercial cooperation between Russian and Norwegian companies in the energy sector, by ensuring the active interaction in exploration, production, processing and transportation of oil and gas;
2. To help carry out joint action for increasing the operational safety of oil and gas fields, with due consideration to environmental issues;
3. To promote cooperation in modern technology exchange regarding oil and gas exploration on the shelf and onshore in North-Western Russia;
4. To facilitate the cooperation between the supply industries of the two countries.

Our energy cooperation must also bee seen in a broader international context, for instance the producer/consumer dialogue within the International Energy Forum, the Energy Charter treaty, negotiations in the World Trade Organization and the EU/Russian dialogue on Energy.

It is also important to focus upon the regional energy cooperation. It is only through practical cooperation that we can contribute to the overall goals of a sustainable energy development through stable and predictable conditions for trade, investment and environmental protection.

The Baltic Sea Region is a growing market. The cooperation in this region has been widended and intensified during the last ten years. The Energy Ministers in the Baltic Sea Region have on several occasions clearly demonstrated their desire and need for further joint efforts aimed at building a sustainable energy future in the region. It has been confirmed that cooperation in this field is a key factor in promoting political stability, economic growth and sustainable development.

I would also like to pinpoint the energy cooperation within the Barents Euro-Artic Council where our officials also are working on strengthening our relations and cooperation in this region.

When the opportunities ahead are discussed, it is essential to take into account the different roles that rest with governments and with industry. Governments have the responsibility for developing optimal frameworks, both nationally and in an international context. The industries – private or public – will be responsible for investments and trade within these frameworks. From a Norwegian point of view, an important aspect of the energy dialogue is to promote co-operation between Norwegian oil and gas companies and the supply industry on one side, and similar industries in Russia on the other.

The competence gained at the Norwegian Continental Shelf by our industry should be appealing to new markets. Norwegian companies have some 30 years experience with development of technology and project management systems for comprehensive offshore developments in demanding geological structures under harsh climatic conditions. The Norwegian Continental Shelf has been a testing ground for the development of technology related to floating production, drilling- and well technology, and gas to shore technology with onshore processing. The Snøhvit LNG development and the planned Ormen Lange development are excellent examples of this front end technology.

To carry out development of big, complex offshore projects under stringent conditions to deliver on time and cost, demands strict and efficient implementation models. With experience from the NCS, Norwegian suppliers and oil companies have developed excellent project management systems, with focus on quality, safety, price and delivery on time.

We are constantly developing the working relations between our own supply industry and international companies, national oil companies, as well as world leading supply companies. The INTSOK foundation was established with this in mind.

INTSOK was set up in 1997 by the Norwegian oil and gas industry and the Norwegian Government. The partner companies represent the entire oil and gas supply chain, which encourage active dialogue between oil companies, technology suppliers, service companies and governments. INTSOK partners are active in most of the important markets, and the Norwegian industry has shared its expertise and skills at workshops and seminars attended by clients and international business partners.

Norwegian oil companies and suppliers consider Russia to be a very interesting market. The Sakhalin offshore development is of great interest for the interplay between our companies. Activities in the Barents Sea, both on the Russian and Norwegian side, could offer interesting possibilities for cooperation between our companies.

Co-existence with other uses of the sea like the fisheries and also the environment has always been important for the authorities and companies at the Norwegian continental shelf. Focus on efficiency improvements and use of environmentally sound technology has made it possible to meet some of the challenges tied to developments in costal and fragile areas. But there is always room for improvements. Authorities and industry have a continuous focus on improvements to achieve additional environmental improvements in the future.

I find it encouraging that the co-operation between our two nations within the energy sector, commercially as well as governmental level, is evolving. I am convinced that co-operation between our two countries in the petroleum sector will continue to prove mutually beneficial.

With these words, I would like to wish you a fruitful seminar session also this afternoon.

Thank you for you attention.