Landmark energy deal signed between Norway and the U.K.

UK signs ‘landmark’ energy agreement with Norway

David Cameron signs deal in Oslo to ensure UK can continue to depend on Norway for secure energy supplies

Nicholas Watt, chief political correspondent, Wednesday 6 June 2012 22.12 BST

David Cameron will pave the way for an increase in British imports of Norwegian gas and oil when he signs a new energy agreement with one of the world’s largest exporters of fossil fuels on Thursday.

As the International Energy Agency warns of a threat to the climate from a new “golden age of gas”, the prime minister will sign what Downing Street is describing as a landmark deal with Norway to strengthen energy links with Britain’s historical ally.

Cameron became the first British prime minister in 26 years to visit Norway when he arrived in Oslo on Wednesday night for dinner with his Norwegian counterpart, Jens Stoltenberg. The two leaders will sign the new agreement over breakfast with executives from 10 leading energy companies. Cameron and Stoltenberg will later fly to Berlin for a town hall meeting with Angela Merkel, the German chancellor.

The agreement is designed to create 1,600 jobs and ensure that Britain can continue to depend on Norway, which meets a quarter of Britain’s energy needs, for secure and affordable energy supplies well into the future. Norway is the world’s third largest oil exporter and the sixth largest producer of natural gas.

The Anglo-Norwegian energy agreement will also lead to an increase in investment in renewable energy. Norwegian companies have invested heavily in the world’s largest offshore windfarm at Dogger Bank, the £30bn scheme designed to provide more than a tenth of Britain’s electricity. Under the agreement, Britain and Norway will establish a joint advisory group to allow companies to talk more easily to the two governments. It will also encourage new technologies such as carbon capture and storage.

In another sign of Britain’s deepening links with Norway over oil, the engineering company Aker Solutions will announce that it is to establish a new engineering hub at its plant in Chiswick, west London, creating 1,300 new jobs. Aker Solutions is a global company that draws up oil exploration plans.

Speaking as he arrived in Oslo, Cameron said: “There is no stronger energy partnership than between Britain and Norway. In the past five years, British companies have invested more than £13bn in Norwegian oil and gas.

“In turn, Norway is meeting over a quarter of the UK’s entire energy needs. And Norwegian companies are major investors right across our energy sector – of course in our pioneering oil and gas industry but also in Dogger Bank … and in crucial projects to connect up our electricity grids and so improve energy security and affordability for both our countries.

“Tomorrow we will take this vital relationship to the next level with a new UK-Norway energy partnership. This will mean more collaboration on affordable long-term gas supply, more reciprocal investment in oil and gas and renewables, and underpinning all of this – a set of major new business deals creating thousands of new jobs and adding billions to our economies.”

Cameron’s visit comes after the warning by the IEA of a “golden age of gas”. Fatih Birol, chief economist for the IEA, said last month: “Renewable energy may be the victim of cheap gas prices if governments do not stick to their renewable support schemes … A golden age for gas is not necessarily a golden age for the climate.”

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