FROM CHANGE TO TOUGH ADJUSTMENT

It is essential that we adapt to the global changes we see in the current energy market. We must guide the industry in the direction we believe it needs to move, by employing a mind-set that is both comprehensive and long-term in perspective. It is important for Norway to have dynamic oil companies and a sustainable supplier industry that can make active contributions to the change process. Both operating companies and suppliers must work to safeguard their own competitiveness and profitability.

The uncertainty surrounding the long-term trajectory of oil and gas prices is primarily linked to future global economic growth, cost development for new production capacity as well as climate and energy policy trends. A guided climate and energy policy, particularly in Europe, means that new power production will increasingly be renewable. Climate-efficient solutions will also be in demand in connection with industry decisions, a fact which must be reflected in our work.

Adjustment is about more than just making cuts. We are an industry where it is currently challenging to implement measures that satisfy requirements for competitive return. This leads to reduced activity and postponements, as well as simplification and streamlining. However, there is a significant potential to unlock further efficiency improvements, and we ourselves have the key. The emphasis must be on cooperation, not just between oil companies and main suppliers, but also further down through the supplier chain.

Good cooperation means different things in different cultures and environments. Good cooperation requires sound relationships between parties that trust each other. This can pose a challenge in a customer-supplier relationship as one often takes cues, consciously or unconsciously, from the power structure between the parties. Future success will demand trust, openness and the ability to think outside the box.

One thing is absolutely certain: Adjustment work must never come at the expense of safety. While HSE results have held steady at a high level, the industry shares a joint responsibility to make sure that they constantly improve.

The license awards in the 23rd round send important signals regarding the future of the Norwegian Shelf, and we are ready and eager to get started on this work. Petoro participates in all of the three licenses in the new areas in the south-eastern Barents Sea. The Barents Sea offers new opportunities, and the interest shown by the industry confirms that the Norwegian Shelf is still attractive.

We have started the work to create a competitive Norwegian Shelf with projects that are profitable in a global perspective. The industry must manage to differentiate between cuts that reduce value and real efficiency improvements. There is still a very considerable potential on the Norwegian Shelf if we succeed in our adjustment efforts. Long-term competitiveness is being created right here, right now!