From: <a href="http://www.aftenposten.no/spesial/wikileaksdokumenter/article3976189.ece">Aftenposten</a><br>
Date: 28.12.2009: 

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UNCLAS SECTION 01 OF 02 OSLO 000791 
STATE FOR EEB - AGREENSTEIN,CBACKEMEYER, NEA/IR - RWADHWANI, EUR/NB 
SENSITIVE, SIPDIS 
E. O. 12958: 
N/A TAGS: EPET, ENRG, EPET, ETTC, PREL, IR, NO, RU 
SUBJECT: Statoil Chief Discusses Global Investments with Ambassador 
REF: (A) STATE 121808 (B) OSLO 741
(C)Backemeyer-Greenstein/Sirotic Email 12/18/09 

OSLO 00000791 001.2 OF 002 

(U) This document is sensitive but unclassified.
Please protect accordingly. 

1. (SBU)
Summary: Statoil Chief Executive Officer Helge Lund provided
the Ambassador with an overview of the companys investments in
the United States, Russia, Iraq, Iran and Norway in a meeting
on December 18. He stressed Statoils transparency with the USG
with respect to past investments in Iran and reiterated the
companys commitment to abstain from new investments there.
Lund also shared his views on the environmental benefits of
natural gas use and suggested that carbon capture and storage
(CCS) should focus on natural gas rather than coal. End
Summary.

2. (U)
In a meeting with the Ambassador on December 18, Statoil CEO
Helge Lund offered a tour dhorizon of the majority state-owned
firms investments and strategy in several countries, as well
as his views on domestic energy policy in Norway.

3. (SBU)
Carbon Capture and Storage: Lund opened by discussing the need
to maintain a balance between pursuing "green" technologies
and increasing shareholder value, while positioning the
company for a world with higher future carbon prices. He said
he was looking to the United States to help solve problems
with carbon capture and storage (CCS) technology. The
Ambassador noted Secretary Chus recent visit to the Test
Center Mongstad (TCM) CCS site, but stated that the United
States had not committed to any specific path on the CCS
issue. Lund opined that clean coal is not a realistic
objective and that CCS would only work with natural gas. The
environmental benefits of focusing on greater use of natural
gas have been underestimated. However, he said he anticipated
potential environmental objections to the exploitation of
shale gas.

4. (U)
U.S. Investments: Statoil has invested USD 10 billion in the
United States in the last five to six years. Lund commented
that Statoil had a good partnership with Chesapeake, a U.S.
firm that it invested in several years ago. Recent increases
in U.S. gas supplies have implications for Europes energy
balance, since more liquefied natural gas (LNG) will be
available for European consumers. This will reduce the
continents dependence on Russian supplies. Lund suggested that
the U.S. might even be in a position to export gas in the
future. He also mentioned a feasibility study for wind power
underway with the University of Maine. Lund emphasized his
desire to maintain dialogue with the USG.
5. (SBU)
Iraq: Lund said that Statoil needed its "play" in Iraq, if
only in partnership with another firm (Lukoil). He expressed
some concern about both the security risks of working in Iraq
and the political risks associated with upcoming elections,
though he reported that visiting Foreign Minister Zebari
indicated the elections would not threaten energy contracts.
Lund characterized Iraqs bidding process as well-organized and
transparent. He opined that forecasts that Iraq will manage to
ramp up oil production from 2-3 million barrels per day (mbpd)
to 12 mpbd in seven years were unrealistically optimistic.

6. (SBU)
Iran: The Ambassador asked Lund about Statoils investments in
Iran. Lund stressed that the company held to its 2008
commitment not to undertake new investments in the country and
was committed to sharing information with relevant
authorities, including the USG, on its activities. Regarding
South Pars 6, 7 and 8, Statoil has completed the project and
is now being repaid for its investment. He noted there was
some inaccurate information in the public sphere about the
size of Statoils investments in Iran and was concerned that
accurate information be made available to us. Lund told us
Statoil was willing to provide additional information if
needed. Note: Earlier that day, Statoil executive Gunnar
Myrvang called Poleconoff on this issue. He noted that a
Congressional Research Service report cited investments of USD
2.65 billion in South Pars 6,7, and 8 but said Statoil
estimates its spending on this project totaled USD 700 million
plus or minus USD 50 million (ref C). End Note. Noting that
Statoil was doing all it could to be transparent and to
maintain a dialogue with the USG on Iran, Lund said he hoped
that Statoil would not be singled out for sanctions. He added
that sanctions on Iran would not be effective unless Russia
and China participated in them.

7. (SBU)
Norway: Lund pointed to declining oil and gas production as a
large challenge for the country. He asserted that over 70
percent of Storting (Parliament) MPs would support opening the
Lofoten/Vesteralen offshore area to exploration and
development over the objections of environmentalists and the
fishing industry if the issue were to come to a vote. He
opined that the governing Labor Party could open the region to
the energy industry if it turned to opposition parties for
support on this specific measure. Note:

OSLO 00000791 002.2 OF 002 

Junior coalition partners the Socialist Left Party and the
Center Party are strongly opposed to opening the region to
energy development. End Note.

8. (SBU)
Russia: Lund told the Ambassador that there are huge (3700
billion cubic meters) gas reserves at the offshore Shtokman
field and that the necessary technology is available to
develop the field, but the project faces a number of serious
challenges, including: lack of local infrastructure combined
with local content rules; risk of low gas prices continuing
into the future, thanks to the impact of shale gas
discoveries; and overall political risk. Lund said he was very
worried about corruption and opined that it is worsening. He
also observed that dealing with Gazprom, Statoils partner in
Shtokman, was essentially like dealing with the Russian
Government, while dealing with Lukoil, Statoils Iraq partner,
was totally different. The Russian economy has been hit by
adverse developments in both gas export volume (down 25 to 30
percent) and reduced sales prices.

WHITE