Sparebank 1 Markets Energy Conference

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Ladies and gentlemen,

Dear friends,

What a pleasure it is to be back at Sparebank 1 Markets Energy Conference, covering important topics in the field of energy, and the opportunities and challenges which lies in front of us.

Before I start, let me take a look back at the history.

In the beginning of the last century, Sam Eyde understood the value of hydropower. Because of Kristian Birkeland’s invention they were able to produce artificial fertilizers.

Financed by the Swedish Wallenberg family and French banks, Norsk Hydro was established in 1905.

Another important point to this story is that the Norwegian Parliament quickly passed laws, reversionary rights, or what we in Norwegian call “hjemfallsretten”.

These rights ensured that the Norwegian hydropower resources was to remain on Norwegian hands. Today, as a result, the state and local communities own 90 percent of the production capacity for electricity.

 

Private capital has also played a significant role for the history of the Norwegian offshore sector and the development of the activity on the continental shelf.

In the 1960s, the Norwegian government recognized the potential of offshore oil and gas reserves and invited private companies to explore and exploit these resources.

This marked the beginning of a partnership that has transformed the Norwegian offshore sector into a global leader.

Private capital brought with it expertise, advanced technology, and operational efficiency, enabling the successful extraction of oil and gas from the North Sea, creating a robust offshore industry.

There hasn’t been a problem that the offshore sector hasn’t been able to solve, as long as there is commercial interest.

 

So, what has history taught us?

It is that capital and investments has been essential for the development of hydropower and petroleum activity in Norway.

However, capital and investments alone, is not enough.

You also need good policies, and a stable and predictable framework.

I believe this combination, of investments, the know-how of energy companies and policies will continue to play a crucial role in developing this energy nation into the future.

A future which is full of energy.

But also, a future which is full of challenges:

• Where we need to provide energy security to a growing world population.
• We have to do so in a sustainable manner.
• And we have to make energy affordable to all, secure industrial investments and create jobs.

Solving these challenges at the same time is crucial for the energy transition.

However, the transition is not going fast enough.

Globally, the investments we need to succeed in reaching our common climate goals are not sufficient. 

 

The productive partnership between policies and business is more needed than ever.

Let me highlight the important role of our industries and businesses.

In fact, in the following panel Hydro is represented. Still going – very – strong! And Scatec, Noble Corp and not least Transocean, who has been drilling the well for the Northern Lights CCS project.

These companies – and many, many more - see opportunities - when markets seek green, sustainable and energy efficient solutions.

In recent years, we have witnessed several success stories of Norwegian companies venturing into green technologies on a global scale.

These companies have not only contributed to the prosperity of the nation, but have also positioned Norway as a thought leader and pioneer in green technologies.

 

We want to see this development continue! And we want to help green solutions become more commercially interesting where we can.

Like for instance what we are working to accomplish with our Longship project, the biggest climate project in Norwegian industry ever.

Or our objective to build a viable value chain for hydrogen.

I believe it is important that we succeed with both to reach the net zero emission society.

 

Let me share some more of Norway’s approach to a clean, renewable, and a profitable future.

Norway, as the only net-exporter of oil and gas in Europe, will contribute to European energy security also going forward.

There will still be a demand for oil and gas during the energy transition.

Norway will keep on delivering oil and gas produced efficiently with low emissions.

To do so, we need to, and will continue exploration and investment in production on our continental shelf. Then we expect to be able to maintain high production over the next decade, before natural decline starts.

 

With many years of experience from our continental shelf, Norwegian companies and their partners are at the forefront in the development of these technologies.

CCS is a necessary climate measure to ensure just transition to net zero.

It is a proven technology where we have demonstrated safe storage of CO2 on the Norwegian continental shelf for many decades.

Our full-scale project, Longship, that I mentioned briefly earlier, will be the first to integrate a complete chain of CO2 providers, a flexible cross-border solution and an open-access storage infrastructure.

However, for CCS to become an effective climate tool, we need more countries and companies to invest in and develop CCS solutions, which is something we work for every day.

As I mentioned for hydrogen, Norway wants to develop a value chain for hydrogen produced with low or no emissions. In this respect, CCS can play a crucial role for developing “blue hydrogen” projects, based on natural gas. But our fantastic renewable resources can also lay the foundations for “green” hydrogen. Not the least in the longer run, with an increasing offshore wind capacity.

Continuing to seabed minerals.

Not long ago, the Norwegian Parliament gave its green light for a stepwise and responsible development for mineral activities on the Norwegian Continental Shelf.

The geopolitical development underlines the importance of securing the supply of important minerals and metals from multiple sources, and from countries with stable and democratic governance, with proper rights and safety for workers.

So, we are adopting a stepwise, knowledge-based approach where environmental considerations are heavily weighed.

These are indeed exiting times for our offshore industry, and I expect vast opportunities for technology transfer to deep sea minerals activities from other marine industries.  

I must stress however, that an opening initially means that industrial players can be awarded licenses to map and search for minerals in a limited area, not to extract.

Approval of exploitation will only be granted if it can be documented that it can be done in a sustainable and responsible manner.

 

And finally, the renewable sector.

Historically, as I have said, the main driving force for the industrialization of this country. Today and forward - a key to employment, industrial opportunities, and reduced emissions.

The government's goal is that we should have ample access to clean and affordable energy throughout the country, and that there should not be large and long-lasting price differences between different parts of the country.

Short term measures mitigating the effects of high electricity prices are already in place, such as subsidies for households and making it easier for businesses to enter into fixed price agreements.

However, in the long term, the only thing that works is more renewable power, more grid and more energy efficiency.

This year we will continue our increased efforts.

First, to make better use of the existing grid and to build a new grid to reduce the bottlenecks in the current power system.

Second, to facilitate the long-term development of profitable solar, hydro and wind power.

When it comes to onshore wind, Norway's wind resources are among the best in Europe, and onshore wind power is currently the technology with the lowest average development cost and can be established faster than some other technologies.

I am very pleased we have resumed the licensing process for wind power after it had been put on hold since 2019.

We are learning from the previous government's mistakes and will do this in a different way, especially listening to local interest.

On offshore wind, our ambitions are clear. Our aim is to award areas that has potential for 30 gigawatts offshore wind by 2040.

And we are making good progress. We recently announced that five developers have been pre-qualified to participate in the auction for Sørlige Nordsjø II. This is an important milestone in realizing the government’s ambition for offshore wind and I look forward to the auction that will take place in March.

It is, however, no secret that these are trying times for offshore wind. Rising interest rates, increasing inflation and bottle necks in the supply chain have created challenges that was hard to foresee just a year or two ago.

But we are working together with the industry and with our international partners to help find solutions.

 

So, dear friends.

To sum up.

The energy sector in Norway has been a driving force behind the country's economic growth, and financial institutions have played an important role in this progress – as history has taught us.

We must learn from history to be better prepared for the future.

Where we succeed with the energy transition - more energy and less emissions.

So, if anyone should ask me: Why should I invest in Norway’s energy sector, my pitch would go like this:

The return on investment is there.

The growth possibilities are enormous.

Norway’s energy sector is full of opportunities.

Investing in it, is investing in the future.

We will do our part: To strengthen what we already have, through stable and predictable investment conditions combined with a competent administration.

The Government will not lose sight of the need for energy security, both at home and abroad. We will make sure that Norway remains a reliable provider of energy to Europe.
Our petroleum sector is not only providing energy security today. It is crucial in developing the technologies for tomorrow.

This is why the Government will continue to develop the Norwegian petroleum sector, and to build on its competence to develop solutions for the future.   

And not least, the legacy from Sam Eyde and Kristian Birkeland is with us even today, developing industries, jobs and products the world need - on renewable energy.

We must succeed at cutting emissions and transition to a net zero energy system in 2050.

The knowledge and competence you represent will be instrumental.

If we are to reach our goals, we need the expertise, experience, and commitment of our energy industries, whether it’s renewables, petroleum or new technologies.

But most importantly, as we go ahead, the collaboration between private companies and the government will be crucial to navigating the evolving energy landscape and creating a sustainable future for Norway's energy sector.

Thank you for your attention!