Leveraging gas positions, mastering a mature offshore sector and "renewing renewables" are key issues facing Norway's energy future, said Hydro President and CEO, Eivind Reiten, at the 10th Nordic Energy Summit 2004 in Oslo on Tuesday.
Hosted by Norwegian investment bank, First Securities ASA, this year’s conference featured several international energy experts, including British Gas CEO, Frank Chapman; German gas giant Ruhrgas’ executive board chairman, Burckhard Burgmann; and Norwegian electricity producer Statkraft’s CEO Bård Mikkelsen.
Topics focused on how numerous new entrants in the Norwegian offshore sector will "change the operational and strategic arena" for oil companies and their suppliers, growth opportunities in the power industry, and "regulatory and ownership issues."
Reiten addressed Norway’s role in the international energy market – specifically, its ability to leverage gas market positions, deal with a mature oil and gas sector, and revive renewable energy developments.
Leveraging gas
"Gas reserves are still quite abundant in the world and as global demand for energy grows, the role of natural gas will surely rise in order to meet the demand in a secure and sustainable way," he told the summit’s more than 100 participants.
Norway currently holds 27 percent of proven gas reserves within the EU and European Economic Area countries.
Norwegian gas becomes increasingly important to European supply. "How we leverage this both in our mid-stream activities and in our upstream business will shape Norway’s future role, as well as that of Hydro’s," Reiten pointed out.
Many competitors sell their gas in advance, but "Hydro is taking an innovative route," including the formation of HydroWingas and the purchase of Duke Energy’s gas activities in the Netherlands.
Mature manner
Most experts agree the Norwegian offshore oil and gas sector is mature and promises fewer large finds.
In the past, "we have seen great discoveries, high production levels, and good governance structure, and in hindsight, an impressive ability among decision makers to look around corners… it’s what the future will bring that concerns me today.
"For me, the difference between a problem and an opportunity is how quickly you realize the challenge. If we realize the challenges ahead now, we may be able to find constructive solutions in time." He urged more responsive government measures to stimulate investment.
Creating incentives
Norway’s future energy market role also includes "our ability to renew renewables," Reiten said.
Renewable energy developments in Europe – especially wind power – grow rapidly, driven primarily by strong EU ambitions for renewables. Globally, the wind industry increases some 20 percent per year.
Due to good wind conditions, Norwegian wind power plants can be very competitive in Europe, but a lack of investment incentives stifles new developments.
Reiten praised the government’s recent proposal to form a joint Swedish-Norwegian "green certificates" market to start in January 2006 – and urged lawmakers to pursue the policy.
"The sooner a well functioning system with green certificates can be established, the sooner new projects for developing renewable energy sources can be carried out."