Tale/innlegg | Dato: 26.03.2014 | Olje- og energidepartementet
- I would like to begin by saying: CON-GRATU-LATIONS!
- Last September the Research Council of Norway decided that the national centre for increased oil recovery would be located here at the University of Stavanger.
- My predecessor, Ola Borten Moe, famously made the announcement from a countryside cafeteria in Trøndelag.
- Maybe he created some uncertainty about who was going to win?
- Anyway, you did and that is well done! Your application prevailed in competition with strong research clusters in Trondheim and Bergen. I think that deserves an extra round of applause.
- Just about a week after that announcement we had the election, and last October I became the new Minister of Petroleum and Energy.
- In fact, that is irrelevant for this centre. Any Norwegian Minister of Petroleum and Energy, no matter what party or coalition, would want exactly the same thing: Improved recovery from the Norwegian Shelf.
- I know this is a broad subject and at the very core of what sound resource management is all about.
- It involves various policy means and incentives, but today I will focus on R&D and the need for the right competence.
- Let me start by addressing the potential for improving recovery rates.
Big potential for improved recovery
- The current plans provide an average expected recovery rate of 46 per cent for oil and 70 per cent for gas on the Norwegian Shelf.
- Of course, this varies from field to field, depending on factors such as reservoir properties, strategy and technology development.
- In comparison, the average global oil recovery rate offshore is about 22 per cent.
- It is certainly great to be amongst the leaders in this area. However, even with this high rate, we still leave more than half of our resources in the ground.
- I choose the positive way to look at it. It leaves room for improvement, and we can work to get better!
- And we should. Just one percent increase in the recovery rate will lead to extra gross public revenues of more than 300 billion kr.
- In that context, does anybody remember the public debate concerning the building of a new opera house in Oslo, and how expensive it would be?
- Let´s put that into perspective – Just a one percent increase in the recovery rate would finance an additional SEVENTY – FIVE new operas identical to the one in Oslo. I care about culture, but building 75 new operas might not be the best way to spend this extra revenue.
- My point is that substantial values are at stake here for the State as resource owner.
- This is also something that is not sufficiently communicated. We do not read a lot about this potential in the media. They tend to focus on what is happening in new and frontier areas of petroleum production.
A great story
- Here we have a job to do, because we certainly have a great story to tell.
- The classic and inspirational example is Ekofisk. When the field came on stream in 1971, the plan was to produce 17 per cent of the resources in the field.
- Today, the plan is to produce more than 50 per cent of the resources in place. I will not even tell how many opera buildings that would mean!
- Great things are happening as we speak. Advanced injection methods are being tested. Likewise, geologists are working on faster and better modeling tools that can provide better understanding of the reservoirs.
- New technology, subsea compression, is also about to be implemented on Åsgard. This will increase the recovery rate dramatically, and may be a game changer in the petroleum industry.
- These are just some examples in what is a truly impressive development.
- I know that the ambition for the Johan Sverdup field is an impressive 70 percent recovery rate.
- I am sure that such recovery rates are something my colleagues from the Ministry of Finance also will get excited about!
Should we have petroleum research?
- When opening a centre dedicated to petroleum research, I think it is appropriate to address the ongoing debate about ethics and whether we ought to carry out such research?
- My answer is a loud and clear: yes! Not just “yes we can”, but yes we should.
- Why? Because we need energy, and we need lots of it! A growing population, combined with aspirations for improved living conditions in both poor countries as well as developing ones, require more energy.
- People need energy to cook, to get an education, to find work and to improve their health conditions. Thus, the demand for energy will continue to rise.
- Some say we should not do research on petroleum, but on renewable sources of energy.
- The answer is simple: They are not mutually exclusive and we need both.
- If we are to meet the rising demand, we need renewable energy and energy from fossil sources.
- As Fatih Birol, the chief economist at the International Energy Agency, has put it on more than one occasion: ”We need every drop of Norwegian oil”.
- Why did he say that? Because oil and gas will have to cover a large portion of the world’s energy needs for decades to come. This is the case even when renewable energy is expected to increase its share of the energy mix.
- Even in a world where we meet the two degree scenario, oil and gas plays an important part of the energy supply.
- That is exactly why we should continue to carry out petroleum research.
- Through research and development we search for the best means to recover the petroleum resources.
- Important challenges are:
How can we recover more of the resources with less use of energy, with a minimum environmental footprint, and with less emissions?
How can we provide more natural gas that can replace coal fired power in Europe?
How can we operate with minimal risk of humans getting injured?
How can petroleum activities co-exist together with other industries and human activities?
- These are just some of the challenges that the scientists, work with on a daily basis.
- Having said all this, I think you all understand that this centre will not be closed on ethical grounds as long as this government remains in power.
- On the contrary, I have high expectations about what can be achieved here.
Expectations for the new research centre
- I am hopeful that the petroleum research centre here in Stavanger will be a driving force in breaking down barriers and reaching new R&D milestones.
- The idea is to build up and refine fundamental expertise and research in this important area.
- New technology and new solutions will be necessary to access difficult reserves and make them profitable. Only in this way we can realize the great potential from improved recovery on the Norwegian Shelf.
- The keyword here is collaboration. Close collaboration between authorities, industry and scientists - both Norwegian and foreign.
- The industry is and must be an initiator. The authorities play an important role by creating framework conditions and incentives that stimulate research and development.
- This is also why the Ministry considers OG21 to be such a useful instrument in formulating strategies and creating synergies in the petroleum cluster.
- OG21, - and I guess this comes as no surprise, - has improved oil recovery as one of four priority areas.
- Close contact with industry is crucial for this centre. That will ensure relevant research, and this is why Stavanger is the perfect location for this kind of collaboration.
- I also expect the centre to provide us with a steady flow of brilliant scientists coming through the master- and PhD- programs.
- Because, it is usually the scientists that are the real heroes of this industry.
- I would also like to commend The Norwegian Research Council for having done an excellent job organizing the call for projects and the evaluation. I know they will continue to follow the centre closely.
- It is time to sum up and eventually allow the scientists to get to work. By now, they should understand that I appreciate the job they are doing.
- The American industrialist and oilman Jean Paul Getty famously stated the formula for success: “Rise early, work hard and strike oil”.
- Well, we did strike oil, and we will continue to strike oil. But we should also rise early and work hard to extract as much as possible of this oil.
- And that is where I hope for important contributions coming from this research centre! I have high expectations!
- It is with great pleasure that I now declare this centre officially opened!
- Thank you for your attention and yet again: CONGRATULATIONS!