News story

PM agrees major energy partnership with Norway

This news article was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The UK and Norwegian prime ministers have agreed to a partnership to secure affordable and sustainable long term energy supplies for both nations.

Prime Minister David Cameron and the Norwegian Prime Minister Jens Stoltenberg today agreed a landmark energy partnership between the UK and Norway designed to secure affordable and sustainable long term energy supplies.

The Norway-UK Energy Partnership for Sustainable Growth heralds closer collaboration between the two countries across a wide range of energy activities, including safe and environmentally sensitive oil and gas extraction, long term gas supply, renewable energy investment, electricity interconnection and international climate change policy development.

Alongside this agreement UK and Norwegian companies have announced billions of pounds of new investment with the potential to create thousands of new jobs.

Commenting at a breakfast meeting attended by ten leading energy companies from the two countries, with combined annual revenues of more than £400 billion,

Prime Minister David Cameron said:

The jobs and investments announced today highlight how vital the strong relationship between Norway and the United Kingdom is for our energy security and economic growth. We look forward to strengthening our partnership further, driving investment into a diverse, sustainable energy mix that delivers affordable long term supplies for consumers.

Commercial announcements include:

  • Norwegian global oil services firm Aker Solutions will create 1,300 new highly skilled jobs by 2015 at its engineering hub in Chiswick. This comes on top of 1,000 new jobs it has already created in the UK over the past two years;
  • Statoil intends to invest a further £12 billion over the lifetime of the UK’s Mariner-Bressay North Sea oil fields in addition to the £6 billion they have already announced. This will lead to the creation of up to 300 new jobs in the UK in the next few years, including at a new operations base in Aberdeen, in addition to 700 UK jobs from this investment that have already been announced;
  • A new Memorandum of Understanding has been agreed between Statoil and Centrica to continue cooperation on gas supply and exploration. This builds on the £13 billion, ten year gas supply deal agreed between the two companies last November and follows the recent completion of a £1billion asset deal between the two companies that will increase Centrica’s oil and gas reserves by 29 percent;
  • The Forewind Consortium, which includes Norwegian companies Statoil and Statkraft, has confirmed its intention to develop the 9GW Dogger Bank offshore wind project off the East coast of Yorkshire, which could require up to £30 billion of investment. This project could provide more than 10% of the UK’s electricity needs. In addition to this project Statoil and Statkraft are investing around £1billion in developing the Sheringham Shoal offshore wind farm off the coast of Norfolk, which is already generating power and will be completed later this year. It will provide power to more than 200,000 UK homes when fully operational. The project employs 500 workers in the field and provides significant secondary employment;
  • Good progress is being made in two projects to build one of the world’s longest subsea electricity interconnectors between the UK and Norway, which will enable the UK and Norway to share renewable energy resources, with each project worth over £1 billion: NSN (National Grid and Statnett) and NorthConnect (SSE, Vattenfall, Agder Energei, E-CO and Lyse);
  • A deal between Shell and Gassco to strengthen UK energy security by providing British customers with more gas from Norway. By making better use of spare capacity in the UK gas transport system, Norwegian gas owners and transporters, including Shell, will be able to transport more gas from Norwegian fields via the Tampen Link to the FLAGS pipeline into St Fergus.

Charles Hendry, UK Minister of State for Energy, added:

For many decades Norway has been one of our most trusted and valuable partners, working with us to develop North Sea resources that underpin our energy security.

The investments and jobs announced today by British and Norwegian companies are a clear signal of the benefits of this partnership.

Notes for editors:

  1. Norway is a key supplier of oil and gas to the UK. Norway provides over a quarter of the UK’s primary energy demands, supplying 42% of our imported gas and around 62% of our imported oil in 2011.
  2. The UK and Norway have developed a shared vision for our joint work in the North Sea and beyond, which emphasises not only the ongoing importance of fossil fuel production, but also the need to promote low carbon growth through renewables and CCS. Our detailed priorities in these areas were set out in the One North Sea statement that DECC Ministers agreed with Energy Minister Ola Borten Moe on 25 October 2011. DECC leads on progress on these objectives.
  3. The text of the Norway-UK Energy Partnership for Sustainable Growth is below.

Joint Statement by the British Prime Minister David Cameron and Norwegian Prime Minister Jens Stoltenberg

Norway and the United Kingdom: Energy Partnership for Sustainable Growth

7 June 2012, Oslo, Norway

The strong bilateral relationship between Norway and the United Kingdom is vital for our energy security and green growth. We have worked closely with business to create durable energy solutions for the future of the North Sea region to underpin sustainable economic development and prosperity of our citizens. We will establish a Business Advisory Group to support work of our officials and ministers to deliver our shared North Sea vision.

In January 2011, we agreed on energy and climate change priorities, including safe oil and gas extraction and supply, offshore wind, Carbon Capture and Storage (CCS), development of a North Sea power grid and UK-Norway electricity interconnection. Since then, we have achieved excellent results on these priorities.

We look forward to the conference on the achievements and future priorities of the UK-Norway energy partnership, to be held at London’s Royal Geographical Society in September, with the participation of representatives of our two governments and the British and Norwegian energy industries, as well as the academic community and the media.

Petroleum exploration on the Norwegian and UK Continental Shelves will continue to provide substantial energy supplies for the coming decades. We recognise the mutual interest of British and Norwegian companies in oil and gas exploration on both Shelves, with the latest licensing rounds attracting unprecedented levels of interest and offering significant opportunities. We note the development of technology to improve hydrocarbon recovery from mature fields and to enable sustainable development of Arctic energy. This is a great opportunity for the supply chain, and is based on the safest national environmental regulatory regimes in the world.

Natural gas has a vital role to play in the UK’s future energy mix, and Norway will continue to be a trusted, reliable supplier. The UK government will continue to actively support industry in agreeing new and enhanced long-term gas supply contracts, building on the £13bn long term supply contract signed between Centrica and Statoil in 10 Downing Street in November 2011, equivalent to 5% of annual UK gas demand.

We recognise the importance of such contracts in underpinning enhanced investments in pipeline and liquefied natural gas capacity, which diversify gas supplies and improve energy security. The UK is currently developing a gas generation strategy, setting out the role for gas-fired power in delivering a secure and affordable route to a low-carbon economy. CCS will enable gas to provide substantial electricity consistent with our climate change agenda.

We will promote green growth by developing policies to encourage clean energy technologies and projects. The UK’s Electricity Market Reform will create an enduring framework for investment in the UK with over £200bn in energy project opportunities. Similarly, Norwegian policies are creating new commercial opportunities for companies, particularly in the High North. The Norwegian-Swedish Green Certificate Scheme also offers incentives for British investors in renewable energy.

The UK is a leading world hub for offshore wind, and we are looking forward to the September opening of the Sheringham Shoal wind farm 100% financed by Norwegian companies. We are committed to developing the Dogger Bank the world’s largest offshore wind project with huge potential to drive business and technology development across the supply chain in our two countries.

It is a high priority for both our governments to support the development of electricity interconnection. This linkage will enable us to share renewable resources (hydro in Norway; wind in the UK) and thereby help us meet to our ambitious climate change targets. Interconnection will also deliver valuable benefits for society by supporting mutual security and flexibility of energy supply and by contributing to greater integration of the European electricity grid.

We are committed to bringing forward a diverse, low carbon energy mix to ensure energy security and meet our climate change targets in a sustainable way. The UK and Norway will work together to build on outcomes of the Rio+20 Conference, including further development of the Energy+ Initiative to increase clean energy access for developing countries. We will continue to coordinate our diplomatic initiatives and work for a successful COP18 in Doha. We look forward to completing the design of the Green Climate Fund to provide long-term finance for developing countries to make low-carbon transitions and adapt to climate change.