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1 Borten Moe s presentation Transcribed from (Paragraph 1) Thank you. It is simply the case that before I now will present the long-awaited report, I have another pleasing message. And it is that the King in the meeting of the Council today has sanctioned the law on el-certificates with Sweden which the Parliament passed some time ago. In addition, there has been achieved agreement with Sweden based on the accord from 2008 and There we have worked to ensure that Norway and Sweden can enter into an agreement about the joint el-certificate marked, and the King has authorized such an agreement. And this means that such an agreement will be signed and presented next Wednesday in Stockholm. And it simply means that we are an important step further in the implementation of the green certificates that have been extremely important for the Centre party for many years, and will come to signify a change of pace in the development of renewable energy. So this is a pleasing message that I thought I should share with you now to begin with. (2)To underline the point: this will mean a lot of renewable energy in the years to come. Today the King also sanctioned the development of the Eikemo- watercourse. An important local development in Western Norway that will provide over 60 GBH power or the power that 3000 households need in normal consumption. This is the kind of development that we will see a lot of in the years to come: Local added value and an environmentally friendly and climate friendly expansion of power resources. (3)And then I have the great pleasure of wishing you welcome to Hønefoss. And here in this county there are many who have their livelihood connected to the petroleum industry. As many as 4000 are working in the supplier industry here in the county. And in Kongsberg not a typical Norwegian coastal town we find one of the world s leading subsea milieus, one of the world s leading technological milieus. And to present the report here during the Centre youth party s debate training course, also underlines the main point with the report: This is a report for the future. (4)This is a report for the future, and that is something that I m proud of. Our success is not only made possible by the fact that we have access to resources, but also that we have done a great job in the previous generations. In this perspective, we are standing on the shoulders of giants. First, we achieved the water course legislation, the license-legislation within soil and forest. This in turn formed the basis for how we formulated the petroleumlegislation in the 1960 s and the 1970 s. Now it is our turn, we who are in government today, to make the right choices. Choices that can have the impact that one in 30 to 40 years looks back and says that what one did in 2010, 2011 and 2012, those were wise and right choices, choices that pulled society forward in the right direction. Wise choices have been made

2 before, now it is our turn to make the wise choices so that future generations can look back and approve of the choices that led us in the right direction. (5)When Norwegian oil policy and the ten oil commandments were formulated in the beginning of the 1970s, a fundamental principle was to develop an oil policy with a goal of exploiting natural resources on the Norwegian continental shelf in such a way that the whole society benefited from it. That must still be a major goal. The petroleum findings in the North Sea make us richer as a nation. The government believes that we primarily have to make use of the new opportunities to develop a qualitatively better society. This, I believe, is still the case forty years later, precisely because one points out that this is about something more than material wealth. It is about a possibility to create rich lives. It is also about an opportunity and obligation to create a better society for all. And today, as a minister, I have the great honor and pleasure of presenting a report that is going to mark out the course for the next forty years. (6)There is no other Norwegian industry that can measure up to the petroleum activity when it comes to economic growth, income to the state or export value. The value added in the oil and gas industry is two and a half times that of the land-based industry and around fifteen times the total value added in the primary industry. The industry contributes with approximately one fourth of the state s income, and in 2011 the state s income from the petroleum industry was 311 billion kroner. (7)But it is also the case that this provides us with more than money, more than value added, more than kroner and øre. Forty years activity in challenging surroundings has challenged us to find technological solutions that we sell all over the world today. Actually, Norwegian offshore industry is one of our greatest export industries. One operates internationally in a global marked. More than 2000 companies have been created here through the petroleum activity, and make their income out of it today. This is a result of competence building unparalleled in Norwegian history. And let me add: It has not come about by itself, it has not come about just because one has had the resources. It hasn t come about solely because one has had to adjust to a tough climate, but also because one has had the abilities and the will to make demands on authorities through the whole history. Today there are six municipalities left, six municipalities that do not have direct spillover effects from this. Some of them are situated in the North. I believe we will have rich possibilities to do something about that in the years to come. (8)And with this governmental report we lay the foundation for continued growth and value added across the entire country. The industry shall still provide the basis for this, as it was stated in the White Paper that Per Kleppe sent to the Parliament in 1973, in which the major goal was to develop a qualitatively better society. (9) And then it is the case that the petroleum report not only is about qualitatively better lives in Norway. That the world needs more energy is, as a starting point, something positive. The world needs more and modern energy in order to lift millions of people out of poverty. One and a half billion people are today without supply of electricity. We have therefore chosen this picture on the cover of the petroleum report. The picture displays

3 marked differences in the world s energy consumption and consequently in the living standard and the possibility for life and good societies on the different continents. And let me just assure you that that the light stripe across Sahara is not made by street lights. It is actually agricultural land that is on fire. (10)These are pictures (pointing to power point foils, my comment) that my state secretary, Eli Blakstad, took in December last year when she lived with a family in a rural district of Ghana. The first two days the power was gone, but without large consequences for daily tasks. The children brought water from wells in the town, carrying them home in big tubs on their heads. The food was bought in the marked every day, no need for refrigerator, and the preparations were done on open fire. Laundering was by hand in cold water, and the day started with sunrise at five o clock and cockcrow, and ended at when the darkness came. But this is a demanding life, requiring a great work effort. The children got up at five o clock, and the one had to heat up the hearth in the kitchen. The yards were to be brushed, the sheep and the shepherds had stayed there during the night. Water had to be brought and the goods to the market also had to be carried. At seven thirty they only just had time for a cold shower in cold water from a bucket and with a scrubbing brush, before departure for school. (11)It was difficult to concentrate in school. The most enthusiastic of them, slept during the breaks and the other slept a little during class. With access to energy for many families, one could have water connected. One could have used hot water to improve hygiene. Food preparation above the smoke from the open fire in the kitchen could have been avoided. The children could have concentrated on school and education. Child mortality rates would have been radically reduced. And this illustrates in an excellent manner why one cannot see energy, climate and poverty problems isolated from each other. We have to address all of them at the same time. And not least we here in the rich part of the world in Norway have to understand the experience of living in countries without access to what we consider to be basic resources. (12)The world s energy consumption is strongly increasing, and will continue in the years to come. Then there is disagreement on which reference paths one shall use. With a redirection of the policy, the increase ahead of us will be 36 percent. And in all scenarios fossil energy will play a major role. The blue curve (refers to a PP-foiler. My comment) is the two degree goal that we have committed us to in the climate agreement. An important climate measure will, of course, be to build out and develop new and renewable energy, as well as to improve energy efficiency. (13)But an important point for me, and an important point with this diagram, is that fossil energy will play a major role and that it therefore becomes an extremely important point to extract that energy in the most energy efficient and environmentally friendly manner possible: To get the most by using the least and with the least possible emissions to the external environment. In this respect it is a good thing to be Minster of oil and energy in Norway, simply because our industry is at the front line. We will continue with that. We shall continue making strict demands to the industry and stricter demands to the industry so that we

4 all along will strive towards higher goals. Not only because this is right, we shall be the most competent, but because it is our possibility to preserve international competitive power. A steady production of oil and gas from the Norwegian shelf is therefore the best contribution Norway can give in order to meet the world s energy challenges in an environmentally friendly way in the short and medium term (intermediate time range). Or as our earlier party leader and Oslo bishop, Gunnar Stålsett, put it: Growth is not to consume more, it is to manage more. (14)The report therefore prepares for a parallel commitment in four areas: We will increase extraction from existing oil fields. We will have a development of profitable findings. We will continue active exploration of open areas both in mature and immature oil fields. And we shall complete the opening process for Jan Mayen and the part of an earlier disputed area situated to the West of the demarcation line in the Barents Sea South. And through a deliberate and parallel commitment in the whole of this chain, we will be able to maintain production, as this curve shows, of oil and gas on a high level many decades ahead. This is a possible production course. The extraction course is ambitious and among other things based on the completion the all initiatives suggested in this report. (15)And let me start with extraction from detected resources. These are areas that already are in production. This is infrastructure that is in place, and the Åm-committee pointed out in their report that the added potential for increased extraction beyond today s plans could be over 15 billion oil drums. A one percent increase in the degree of extraction across the whole Norwegian shelf will bring about an extra income of 325 billion for the Norwegian society. We have recently turned 40 years as an oil nation. 9 June 1971 Trygve Bratteli opened Ekofisk. 9 June 2011 we celebrated that 40-year anniversary by agreeing upon 40 new years at Ekofisk. An investment of 65 billion, one of Norway s largest industrial projects ever. In 1971 one expected an operating time of 40 years and an extraction degree of 17 percent. In 2011 we know that we will carry on for 80 years, and we have increased the extraction degree to 52 percent. But in 40 years there will still be 42 percent left in one of the world s largest oil fields. And that is the challenge for the future: To try to make that percentage smaller, to try to extract more of the resources that exist. It also the case that many of the resources that exist are time-critical. In other words, it is now that one has the possibility to bring them up, it is now that the infrastructure is in place, it is now we can get it. It is therefore urgent to go through with the initiatives that can extend the duration of many of our mature fields. (16)In this report the government is following up several of the suggestions of the Åmcommittee. First, we ask KonKraft to follow the suggestions by the Åm-committee that are directed to the industry. We will appoint an expert committee that will assess the possibility of increasing the operating capacity on the Norwegian shelf. We will intensify the follow-up of late phase fields. We are going through the voting rules in the license. And we are planning on emphasizing to a larger degree interest majority in new extraction permissions. We will consider establishing a research center for increased extraction.

5 (17)Then there is the development of new findings. In addition to increased extraction from findings in existing fields, we have to expand already detected resources. Today there are 100 findings on the Norwegian shelf that are waiting to be developed. There are many new findings among these, but also several older findings, such as Hild, which was discovered back in the 1970 s. We see that profitable findings are developed. Many of these are small, but through a fast forward thrust and standardized development solutions, they are nevertheless profitable and viable. In the report, we suggest a practice in which plans for development and operation can be presented earlier in the projects with rapid progress. And I can mention that the government today authorized the development of the field Hyme. Hyme is a good example, it was discovered as late as in July 2009, and it will be connected to existing infrastructure in at Njord. With investments of four and a half billion Hyme is a good example of how time-critical resources can be exploited and creates added value to the Norwegian society. (18)Then there is exploration in open areas. Here we have a great resource potential that is not yet discovered. We therefore have to explore more. We have two equal license agreements on th Norwegian shelf. We have the numbered license arrangements and the socalled TFO- rounds, awards in predefined areas. Through the numbered areas licenses are awarded in the least explored parts of the Norwegian shelf, whereas in TFO the focus is on awards in mature areas. The frames for the awards for these areas are given in the management plans for the areas. (19)I want to address the TFO arrangement separately. There has been a debate and many people have had opinions about it. At the same time as we present the report today, we present the review we have made of the arrangement. Towards the end of the 1990 s we started the development of a specially accommodated license round for mature areas. The TFO-arrangement was established in 2003, and has contributed to great exploration activity and great added value on the Norwegian shelf. We have concluded that the TFO arrangement is a success and that it shall be continued as it is today. The arrangement secures god utilization of resources and creates predictability for the companies on the shelf. Since 2000 there has been created several 100 billion kroner from exploration in areas that are defined TFO today. We will continue with yearly rounds and we will include all mature areas. TFOareas shall expand, but not be downscaled. There will be more openness about the arrangement, and we will from now on arrange public hearings. For areas with a management plan the hearings will be oriented towards clarifying if there has appeared new, vital information that is relevant for decisions in the management plan of where there might be petroleum activity. In this way, we will avoid replay on evaluations that the Norwegian parliament already has made. (20)Then there are new areas. I think that The Mountain Act s paragraph 2 is a beautiful paragraph. It is beautiful because it determines that The Mountain Board is to administer state commons in line with the times and the conditions. In the same manner it is my ambition to that we in line with increased knowledge and new technology proceed gradually in extraction from the Norwegian shelf. In the same way as we always have done. Ekofisk our largest field was found 70 meters below the ocean surface. At that time, we

6 believed that was the limit, at that time it was the limit. Today we drill and extract at great ocean depths and under extremely high pressure and under extremely high temperature. We are today capable of things that we have not been close to before, and who knows what the future will bring. And as knowledge and new technology continue to improve we therefore will also open new areas in order to maintain a significant production and economic growth in a long-term perspective. The last time that a new area was opened for petroleum activity was in The last large finding on the Norwegian shelf, Ormen Lange, was done in this area in The opening process in the ocean area Jan Mayen and de earlier disputed areas in the Bartens Sea South, is already in full swing. And I can promise that we will hold full pressure on this work. (21)Healthy competition and diversity has always been a key element in the Norwegian petroleum policy through forty years. Yes, we have managed to develop a national industry with national oil companies, national oil milieus. We have managed to develop an international competitive, supplier industry, but always within the frame of and I believe that has been necessary to succeed international competition, international capital, international competence. We shall also continue with this in the years ahead. (22)All of the three government parties have in their national meetings supported a strengthening of Petoro. Petoro is the state s direct economic engagement, a specialist group in Stavanger that we wish will play an even greater challenger role towards the actor at the Norwegian shelf. More competence and more focus on knowledge development in the licenses is important in order for us to realize our plans of increasing the degree of extraction and get more dynamics into the Norwegian shelf. (23)More evaluations in the companies of interest create values. It is not only a question of Petoro, here we wish that all an expect that all licensees on the shelf will actively contribute in all the licenses. We will provide the opportunities for new, competent companies to establish themselves on the Norwegian shelf, and in the report we notify that that we will actively seek out oil companies to inform about de rich business possibilities we believe exist on the Norwegian shelf. (24)It is impossible to present a petroleum report without discussing spillover effects. The petroleum report has meant a lot to district-norway in places where we have had activity outside the coast. This is something we can also see now in Finnmark where Snøhvit has generated new activity and new initiative in a whole region. I will be, and I am, extremely clear that the activity at sea will give activity in spillover effects on land. I am also crystal clear in my expectations that oil companies shall contribute to ripple effects in the future in the same way as they have done up till today. We will still make demands that societal matters are elucidated in connection with plans of development and operation. We will also make demands that the operators renew the development the last two years after the field has begun operating, and we shall complete an analysis of regional and local spillover effects of the development. We will provide opportunities for establishing tender processes during development that makes it possible to for local and regional industry and commerce to participate. We will also contribute from the authorities side by increasing our presence when

7 our activity moves northwards. We therefore give notice in the report that we gradually will strengthen the staff at the petroleum directory s office in Harstad. We furthermore will consider establishing a research center for petroleum activity in Arctic areas. Shortly summarized: this illustration chart and this report implies that the Norwegian oil and gas industry is heading northwards also on land, will create spillover effects, values, possibilities for societal development and rich lives in the North in the same way as it has done in other parts of the country, in concurrence with our findings of resources in the North. (25)In the parliamentary report I also make a change in the naming policy. New, important findings, such as Skrugard, will, when developed, be given a name that places them in a national context and in history writing. Findings that lead to a leap or a major step forward for the industry, the country region or the nation will be given a name that is associated with similar events in our country. Therefore, I have proposed that new findings, for example Statoil s new findings, will be named after Johan Sverdrup. He is the father of parliamentarism, and to me the symbol of one of the most important changes in our society, the most important advances in our society, namely the introduction of the constitutional democracy. The same democracy that created strong institutions that in turn made it possible to have a good framework surrounding extraction of our petroleum resources. To me he is a symbol of this important progress, in the same way as I hope that the findings in the area of petroleum activity will give possibilities for richer lives in the North. We are an important part of Johan Sverdrup s heritage, and the Centre party is a child of the great alliance between that farmers and solicitors the Left-state was. (26)Finally, I will show a picture of a Norwegian-built seismic ship. The Oil Directorate is now collecting seismological information in the sea areas surrounding Jan Mayen. The charting started 10 June. The seismic activity will gradually move to the southern part of our new area in the Barents Sea. The demarcation line agreement with Russia is in my opinion one of the things that really will be maintained when history writing in some years shall describe this part of Norwegian history. This petroleum report represents a continuation of the historical agreement that now can open a new petroleum province in the North. In the same way as we shall move further, up and forward with the petroleum activity on the Norwegian shelf elsewhere, I hope that this report will be remembered as a report that seriously laid the foundation for en totally new era in the North. I find that Winston Churchill s words are suited to conclude. This is not the end, this is not even the beginning of the end, but it is maybe the end to the beginning.