The Restless Explorer Oil & Gas report February 2013
Special Foreword by Norwegian minister of petroleum and energy Ola Borten Moe Our petroleum activity is moving further north. It has taken time to develop the Barents Sea into our third petroleum province. Thirty-two years have passed since the area was opened, and 30 years since the first gas was proven in SnĂ¸hvit. Geological mapping and impact assessments are well underway in the southeastern Barents Sea and around the island of Jan Mayen. The development of new discoveries will create the greatest possible value for society, and can contribute to regional ripple effects. The petroleum activity is moving north, and the dialogue and interaction between authorities, industry and regional businesses is important in order to find good solutions. In this way we will ensure the maximum value creation and optimal resource management in the best interests of Norway and the wider oil and gas community. I hereby invite international oil and gas companies to explore the opportunities available on the Norwegian Continental Shelf and I appreciate this initiative by Focus Reports to shed light on the key developments in 2012.
For exclusive ITVs and moreÂ insights, log on to energy.focusreports.net
7 8 8 10 11 12 12 14 16 18 19 19 20 22 23
NORWAY: THE RESTLESS EXPLORER SYMPATHY FOR THE OVERPAID DERAILING A RUNAWAY INDUSTRY HIGH ON UTSIRA BUYING INTO NORWEGIAN SUCCESS AN EQUITY BRIDGE TO NORWAY SCOTT VS AMUNDSEN IN OIL & GAS LATCHING ON TO THE SUBSEA GROWTH STORY SEEKING OIL & GAS ASYLUM IN A RISKY WORLD THE RISK OF NORWEGIAN OVERENTHUSIASM AN INDUSTRY WITHOUT PEOPLE WHAT’S THE RIG IDEA? A 50-YEAR JOURNEY TO AN UNCERTAIN DESTINATION STRANDED UP NORTH RESPONSIBLE RISK-TAKING
Ola Borten Moe, Norwegian minister of petroleum and energy Magne Ognedal, director general – Petroleum Safety Authority Kjell Pedersen, president and CEO of Petoro Torstein Sannes, managing director – Lundin Erik Karlstrøm, CEO – North Energy Magnar Fagerbakke, Vice President – Markets & Contracts at COSL Asbjorn Olsen, managing director – Transocean
This report was prepared by Focus Reports Report Publisher: Ines Nandin. Project & Editorial Director: James Waddell. Editorial Researcher: Cameron Rochette.
Editor: Eric Watkins. Project Coordinators: Chiraz Bensemmane, Zuzana Kudelova.
Copyright All rights reserved. No part of this publication maybe reproduced in any form or by any means, whether electronic, mechanical or otherwise including photocopying, recording or any information storage or retrieval system without prior written consent of Focus Reports. While every attempt is made to ensure the accuracy of the information contained in this report, neither Focus Reports nor the authors accept any liabilities for errors and omissions. Opinions expressed in this report are not necessarily those of the authors.
NORWAY THE RESTLESS EXPLORER
aving spent a decade tracing the steps of the UK along the same downward-spiralling production path, Norway has now found a second wind. A spate of world-class discoveries over the last couple of years has breathed new life into Norwayâ€™s oil and gas industry. Indeed, as Norway unlocks its third petroleum province in the Barents Sea in the 22nd licensing round, its E&P story is clearly still being written. Currently garnering the envy of debt-laden and stagnating European economies, Norway is riding high on a second oil boom and faces a very different set of challenges. With unprecedented levels of E&P interest in the Norwegian Continental Shelf (NCS) the key questions are how long and how far can Norway now stretch its capacity without collapsing from the strain.
Photo was taken from ship on a geological fieldtrip for Licence PL 537 on Aug. 19, 2010, Steinhauserfjellet.
This sponsored supplement was produced by Focus Reports. Report Publisher: Ines Nandin. Editor: Eric Watkins. Project & Editorial Director: James Waddell. Project Coordinators: Chiraz Bensemmane, Zuzana Kudelova. Editorial Researcher: Cameron Rochette. For exclusive interviews and more info, plus log onto www.energy.focusreports.net or write to firstname.lastname@example.org
www.ogfj.com â€˘ Oil & Gas Financial Journal February 2012
Norway Oil & Gas report February 2013
Sympathy for the Overpaid
is too much activity. This would seem like a joke to others.” He
In July, as the European press was reporting that Norway’s oil and
continued: “The critics think Norway’s blossoming oil and gas sec-
gas industry had shut down and British gas prices had shot up,
tor puts negative pressure on the Norwegian economy and hurts
I was sitting in an office with Hilde-Marit Rysst, president of the
Norwegian Union of Energy Workers. We were discussing whether
Lund was referring to prominent politicians and economists
Norwegian offshore workers, whose average salary of $180,000 is
who have been flirting with the idea of slowing down the pace
twice that of the global average, who work a “two weeks on, four
of Norway’s oil and gas development, fearing that it might disad-
weeks off” regime and who currently retire at 62 were justified in
vantage the rest of the economy. One of the three members of
launching a 16-day strike action. Undertaken to protect what some
Norway’s coalition government, the Socialist Left Party, has pub-
would see as rather indulgent labor rights, the strike of 708 work-
licly announced that high offshore activity is harmful to the rest of
ers ultimately reduced Norway’s July oil production by 17 percent,
the mainland industry. They see this wealth-generating industry
and threatened Norway’s reputation as a stable gas supplier.
creating a skills drain from other sectors and fueling a dangerous
For Rysst, however, the issue was not whether highly skilled
real estate bubble. In Norway’s oil capital, Stavanger, buoyant oil-
Norwegian offshore workers deserved working conditions well
worker salaries have driven a rise in house prices, making it hard
above those of their counterparts in other countries. It was not
for lower paid workers to find places to live. As a case in point,
even about employers reneging on past agreements. Rysst’s main
local hospitals are short on nurses, whose salaries struggle to meet
problem with the situation was the hypocrisy of an industry that
the cost of living in one of the top 10 most expensive cities in the
was able to offer generous pensions to its chief executives now
world. However, Lund warned that any restraint on the
reining in the rights of the workers who paved the way
industry would throw up a huge challenge to invest-
for its success.
ment and irrevocably harm value creation stemming
She pointed out that at one time the top 10 execu-
from the industry.
tives at Statoil earned the same as the CEO of Exx-
In 2012, while other European economies dallied
onMobil and that the industry was founded on more
around anaemic growth figures, Norway was at various
egalitarian principles. For her, the nature of Norwegianbased oil companies like Statoil is changing. “Firms
Helge Lund, CEO, Statoil
points Europe’s fastest growing economy. Norway is projected to have a robust 2.8 percent growth in 2013
in Norway are earning colossal amounts and the difference between them and their European counterparts is even
and, according to the Norwegian Petroleum Directorate, 21 per-
greater than the difference between Norwegian worker pay and
cent of that growth can be attributed to the oil and gas industry,
the average pay in Europe,” said Rysst. For her, the only valid
while 47 percent of Norway’s exports are made up of petroleum
wage benchmarking is within Norway, and the only inequities are
sales and oil services. With such strong value creation one might
those that exist between the top and bottom of Norway’s industry.
ask: why punish the oil and gas industry?
In September, the Norwegian Petroleum Association managed
Norway has gone to great lengths to prevent abuse of its oil
to head off another strike of 159 workers on North Sea fields by
wealth and resist the Dutch disease - the apparent relationship
acquiescing to a 4.5 percent pay rise. Whilst the rest of Europe
between the increase in exploitation of natural resources and
talks of pay freezes and austerity measures, these conversations
a decline in the manufacturing sector. At $654 billion Norway’s
can be heard only as faint echoes in Norway.
“Government Pension Fund” is the largest sovereign wealth fund in the world, swallowing up 100 percent of Norway’s state oil rev-
Derailing a Runaway Industry
enues, with a limitation of four percent being made available for
Speaking at the 2012 Pareto Securities Oil & Gas Offshore Con-
reinvestment by the state within Norway. The sagacity of this sys-
ference, with a tone of reserved bafflement, Statoil CEO Helge
tem has earned international respect, yet it seems that however
Lund parroted discussions taking place in the Storting (Norwegian
strong the remedy, the runaway success of Norway’s oil industry,
parliament): “We believe that our economy is too strong, there
nonetheless, poses a challenge to the rest of Norwegian society.
February 2013 Oil & Gas Financial Journal • www.ogfj.com
We focus on both mature and frontier NCS exploration and continue to explore the Barents Sea!
Norway Oil & Gas report February 2013
High on Utsira
an element of luck in making this discovery.
But what kicked off Norway’s second oil boom?
However everyone forgets that we spent
Over the course of 2012 Norway’s part-privatized NOC, Statoil, Swedish E&P independent Lundin and their partners carried out
$600 million in this area before it became a big success story.”
appraisal drilling on the Johan Sverdrup field (formerly Aldous/
Since Lundin first entered Norway in 2003,
Avaldsnes). Successful drilling programs since its discovery in
the company has enjoyed repeated explora-
2010 confirmed that this giant field, which is expected to contain
tion success, following a strategy oriented
upwards of 3.3 billion boe, is not only one of the largest finds on
around Jurassic highs. In fact, the company
the Norwegian Continental Shelf (NCS) since the mid-1980s but
has chalked up a discovery every three years since 2004: Alvheim
also one of the top five discoveries of all time in Norway.
Volund 2004, Luno (now Edvard Greig) 2007 and Avaldsnes (now
The two blocks (PL501 and PL265) located in Norway’s North Sea on the Utsira High, which now form the Johan Sverdrup dis-
Torstein Sanness, managing director, Lundin
Johan Sverdrup) 2010. However, Sannes makes no mistake that Johan Sverdrup is clearly a game-changer.
covery, appeared in the country’s first licensing rounds back in
Sannes boasted not only that companies are now queuing up to
1965. Four successive license groups have been within meters of
partner with Lundin, but also that their loan facilities have been
finding these oil reserves, but without success. Asked whether this
oversubscribed to the tune of $5 billion. He continued: “When
discovery was part of a skillfully designed strategy emanating from
Johan Sverdrup comes on-stream in 2018 or later we will see our
Lundin’s now legendary exploration manager, Hans Christen Rønn-
production increase substantially. Statoil has been quoted as seek-
evik, or simply remarkable good luck, Torstein Sannes, managing
ing 500,000 barrels per day from Johan Sverdrup after 2.5 years
director of Lundin Norway, replied: “It certainly feels like there was
of production and Lundin can look at having around 25 percent of
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Contact Information: Stavanger Office Løkkeveien 99, 4008 Stavanger, Norway Business Contact: Lars Myklebost, email@example.com, tel: 0047 51 37 25 17 Oslo Office Lysaker, Norway Business Contact: Per Damsleth, firstname.lastname@example.org, tel: 0047 51 37 25 06
6 CarCon_OGFJ_1302 1
February 2013 Oil & Gas Financial Journal • www.ogfj.com 1/24/13 3:01 PM
11 Johan Sverdrup's production.” Moreover, Johan Sverdrup’s water depth is around 115 meters, it is nearby existing oil and gas export
infrastructure, and there are no high temperature/high pressure
140 NOK bn in 2010 money
(HTHP) concerns, making these highly valuable barrels. This remarkable story has spurred on the industry and other major discoveries have followed from Skrugard in 2011 to Garantiana in December 2012. Erik Haugane, CEO of Norwegian independent DetNorske, one of Lundin’s key license partners on Johan Erik Haugane, CEO, Det Norske
120 100 80 60 40 20
Sverdrup, attributes this success, not to
the good fortune of having a resource-rich
New companies Large companies
shelf, but to the liberalization of the industry from 2000. He said
Small and medium-sized companies Large Norwegian companies
that the major change occurred when the Norwegian Parliament gave up the rigid dogma of maintaining three oil companies on the NCS: Saga, Statoil and Hydro. Since then the Norwegian gov-
A child of Norwegian venture capital company HitecVision, Spring
ernment in 2005 introduced a 78 percent tax rebate, which “took
Energy had built an extremely strong track-record in exploration
away the disadvantage of being a newcomer compared to the
since its foundation, making six commercial discoveries out of 12
established companies who could transfer the tax to their operat-
drilling operations since 2008.
ing costs immediately or push it forward for later income.” For
Discussing the origin of the company in
Haugane, it is the new arrivals to the shelf like Lundin which have
2007, Roar Tessem, founder and CEO of
reignited the industry and they are the ones that hold the key to
Spring Energy said, “I saw a great deal of
reversing Norway’s decade-long oil decline.
opportunity in prospects that had been missed within the mature areas of the North
Buying into Norwegian Success
Sea and also growing opportunities in the
On the back of strong exploration incen-
Norwegian and Barents Seas. This potential
tives, the number of companies active on
has certainly not diminished since then, in
the NCS has increased to nearly 60 today
fact I rather think it is more focused now and this potential has been
from around 18 a decade ago. However,
repeatedly confirmed by recent discoveries.”
Roar Tessem, CEO, Spring Energy
according to Svein Ilebekk, Cairn's director
Tullow naturally brings financial muscle and experience to the
of Northern Europe, the number of compa-
operation and Tessem, now managing director of Tullow Norge AS
nies is unsustainable in the current financial
Svein Ilebekk, director of Northern Europe, Cairn
affirmed, “We have a solid drill schedule over the 12 firm wells for
today and will be even more critical going forward both in the UK
tinue strengthening our ability as an operator because we will drill
and Norway. I think in a few years’ time you will see an increased
our first operated well in the second half of 2013 on the Mantra
consolidation in Norway and a different set of companies,” Ilebekk
prospect just northeast of the Troll field.”
climate. “Accessing capital is a major issue
the next 18-24 months. He continued, “We would also like to con-
Both Spring Energy and Tullow Oil had been looking to expand
Two of the companies Ilebekk helped found have been acquried
into the North Atlantic and the merger was a good strategic fit.
by firms seeking entry into Norway: Revus by Wintershall and Agora
Well-known for its African E&P projects, Tullow’s foray into Norway
Oil & Gas by Cairn. December 2012 then saw British E&P indepen-
marked a new direction for the firm and the acquisition secured its
dent Tullow Oil acquire Norwegian pure-play exploration company
fast access to 28 licenses on the NCS with potentially more on the
Spring Energy for $372 million.
way if applications in the 22nd licensing round prove successful.
www.ogfj.com • Oil & Gas Financial Journal February 2013
Norway Oil & Gas report February 2013
An Equity Bridge to Norway
have been a number of pan-North Sea players or UK-focused players
Addressing the shaky foundations of Europe’s
making their way into Norway over the last couple of years.”
financial markets, Tom Reynolds, CEO of the
Reynolds sees Norway’s exploration environment as attractive due
dual-listed Norwegian-British E&P company
to its open access to seismic data and the availability of transporta-
Bridge Energy, expressed the opinion that
tion and offloading infrastructure for fast-track tie-in programs. “This
the European downturn would not induce
is a very well understood province with great data access and if you
shareholders to sell, but could restrict access to new capital. According to Reynolds, the
find what you are looking for it should be quicker, easier and more Tom Reynolds, CEO, Bridge Energy
commercial to develop than in most other places in the world,” said
advent of the Greek sovereign debt crisis
in 2010 certainly hampered Bridge Energy’s first IPO attempt. Later a key tactic for Bridge
Scott vs Amundsen in Oil & Gas
Energy was to gain a second listing on Lon-
Just like Robert Falcon Scott and Roald Amundsen, the famous British and
don’s Alternative Investment Market in addi-
Norwegian explorers who competed to discover the South Pole a century
tion to Oslo listing, in order to mitigate the scarcity of equity funding. Reynolds saw the UK as presenting a sepa-
ago, the UK and Norway are today locked in a similar competition. They Alfred Kjemperud, managing director, Bridge Energy
share the same North Sea basin, and there is a race to attract investment to their continental shelves. Technically the British were the first to arrive
rate investor community, and one which was
on the scene, with a few years’ headstart. But now it seems that Norway
keen to get involved in Norway’s exploration story. He explained that
is pulling ahead, with 2011 marking the first year when more exploration
despite the European recession, “The Norwegian exploration suc-
wells were drilled in Norway than in the UK.
cess story carries a lot of weight in this investor community. There
In the original race for the South Pole, Scott made use of ponies, dogs
February 2013 Oil & Gas Financial Journal • www.ogfj.com
Number of wildcats
Dry wells Discoveries Discovery success
70% 60% 50%
1980 1985 1990 1995 2000 2005 2010
Discovery success â€“ five-year rolling average
13 and sustained business. With the new finds, the activity level is only going to increase further. You therefore do not need to worry too much about business decline. This stable environment has allowed some of our businesses to grow their presence since 2003.â€?
Gary Smart, CEO,Tendeka
He believes that the UK market will lag behind Norwayâ€™s for some time to come and even if the UK tax incentives increase, â€œthe market will need a long time before the investment is where it needs to be to reach the level it was before the recession - after all, the UK is still in recession.â€? It is also important to him that in the UK there is no longer a strong presence of the international oil companies (IOCs), but instead many independents that, in his opinion, do not push new technologies as actively.
and even engine-driven sledges, whereas Amundsen stuck to using dogs
According to the consultancy Wood Mackenzie, Norwayâ€™s winning strat-
the whole time. Similarly, over the last few years, the British have changed
egy has rested on four main pillars: the creation of the Awards in Pre-
their fiscal strategy numerous times whereas the Norwegians have
defined Areas in 2003, the 78 percent tax rebate on exploration, open
remained relatively steadfast in their approach.
seismic data access and fiscal stability. The race between the UK and Nor-
For Gary Smart, CEO of Aberdeen-based completions specialist
way has historically been close, but in 2013 the NCS is expected to attract
Tendeka, â€œNorway is far less volatile; the rig count has not suffered any
$37 billion to its waters and has already edged its way past the UK to hold
major dips over the last 3-5 years. This makes it strong for investment
the #1 global position in offshore investment compared to UKâ€™s #4.
Near-wellbore focusĂ– Ă–far-reaching results Â Â?Â? Â? Â? Â? Â? Â? Â? Â? Â? Â? Â?
www.ogfj.com â€˘ Oil & Gas Financial Journal February 2013
Norway Oil & Gas report February 2013
Latching on to the Subsea Growth Story
they tie-back to existing infrastructure and given
In its 2011 paper, “An Industry for the Future”, the Norwegian Ministry of
this trend in the market, the subsea investments
Petroleum and Energy cited two time-critical initiatives aimed at boosting
are projected to double from 2012 to 2016.
production from the NCS: improved oil recovery (IOR) from mature fields,
However, we have not yet seen this happening
and fast-track tie-in programs from new fields to existing infrastructure.
in 2012. As yet, not that much engineering work
Both of these initiatives are dependent on using Norway’s mature infra-
has been up for tender and it has mostly been
structure, some of which has been in production for more than 40 years.
very small-scale feed studies. However, the pro-
The aim of the fast-track tie-in programs is to significantly reduce the
jected investments are huge, taking into account
time to bring a field on-stream to a matter of months from an average
fabrication and installation and we expect the
of 10 years. Statoil has been leading the way with this initiative, creating
market to grow significantly next year ”.
Ragnar Hjelmen, operations director, J P Kenny Norge
its own independent fast-track division encompassing a portfolio of 12
As a consequence of this subsea opportunity, the 70-strong organiza-
projects ranging in value from $500 million to $2 billion. The fast-track
tion in Norway, which has a dual presence in Stavanger and Oslo, is now
strategy has also caught the attention of numerous independents looking
in a phase of rapid expansion. In meeting the capacity demanded by the
for low-risk, high commerciality from smaller fields.
market, Hjelmen believes J P Kenny will have an advantage in being able
According to Ragnar Hjelmen, operations director in Norway for UK engineering company J P Kenny: “There will be a lot more wells where
to draw on the international human resources of Wood Group, especially in a country famously tight on skilled labor.
AN INTERVIEW WITH ØYSTEIN MICHELSEN, EXECUTIVE VICE-PRESIDENT OF DEVELOPMENT AND PRODUCTION IN NORWAY AT STATOIL Focus Reports: Looking at how this partially-privatized state oil company conducts its E&P strategy in Norway, would you describe Statoil as an IOC or an NOC? Michelsen: Statoil functions a lot like an IOC in Norway. The regulatory authorities in Norway are separated from the company and we therefore fall under exactly the same harsh scrutiny as any other player on the NCS. Of course, Statoil plays a cerØystein Michelsen, executive tain "architect" role on the NCS as vice president development & we are heavily involved in the most production Norway, STATOIL prolific areas of production. In this respect, Statoil is responsible for a lot of the infrastructure and consequently has a significant say in how this is developed. Nonetheless, this is a consequence of our size and historical role rather than of our function. In around four years, 13 companies will have platforms on the NCS and there will be around 40-50 operators and 60-70 license investors. So far, we have been used to cooperating with the international majors and they are still our main partners in production. However, to an increasing degree, we are now building relations with newer and smaller players on the NCS. Focus Reports: How does domestic production fit within Statoil’s global objective to producte 2.5 million bpd by 2020?
Michelsen: Domestic production was always important to meet this goal and given the scale of new discoveries, it is even more so. The NCS will be a growth story for Statoil towards 2020. There is a slight reduction in production in the short term, but it will increase towards 2020 and our goal is to produce more than 1.4 million boed by 2020 from the NCS. We will grow our production in the order of 500,000-600,000 thousand boed until 2020; this is a tremendous growth story and our production on the NCS will match our international production over the coming years. The perception of the NCS as a gloomy, sunset production area is simply wrong. The Northern finds in particular, such as Skrugard and Havis and the North Sea giant Johan Sverdrup have opened people's eyes to the ongoing potential of the NCS. Focus Reports: I have heard you are targeting 60 percent recovery on the NCS. How important is IOR to your production growth over the next few years? Michelsen: IOR is a very important part of our growth story. Typically it involves drilling more wells in existing fields and low pressure production. We are engaged in many of these projects around the NCS which are very exciting. For example there is one project at Gullfaks involving a subsea compression unit, which is smaller than the one we have installed at Åsgard. These subsea compression stations are very demanding, innovative and exciting projects; they represent an important step in the development of the subsea factory. Over the last couple of years, we have matured as much production from IOR projects as from new developments.
February 2013 Oil & Gas Financial Journal • www.ogfj.com
Where we explore we look under every stone!
OMV (Norge) AS currently holds 17 licenses Ăą most of them in the Barents Sea Ăą and operates eight of them. The strong experience and expertise of OMV Exploration & Production GmbH based in Vienna, Austria, with operations across 17 countries, resulted recently continue with this success story on the Norwegian Continental Shelf.
16 Seeking Oil & Gas Asylum in A Risky World Over the past decade Norway has served as a comfortable training ground for European downstream companies such as RWE, Bayerngas and GDF to flex their upstream muscles. This trend continued in 2012 and it witnessed two major deals between Statoil and European downstream companies wishing to expand their upstream presence: Centrica and Wintershall. Wintershall alone forked out $1.35 billion for Statoil’s stake in the Brage field, 120km Northwest of Bergen in the North Sea. According to a 2011 Ernst & Young report, “The Oil Downstream: Vertically Challenged”, the soaring price of oil has shifted value creation sharply towards the upstream sector, suppressing the downstream margins in an extremely competitive European market. This change in the financial environment has encouraged leading downstream companies to look upstream. Since our last meeting with Bernhard Krainer, general manager of OMV, in 2009, the company has more than doubled its license portfolio on the NCS to 17. Krainer notes that the “executive board of OMV introduced a new strategy in September 2011 with OMV focusing more on the upstream sector for future investments. As our activities in Norway are upstream focused, we
Bernhard Krainer, general manager, OMV
are here certainly profiting from the new strategy.” For OMV, Norway provides a safe bet within its international operations: “In terms of our global portfolio, where some countries carry a certain amount of political risk, Norway provides a good counterbalance. OMV operates in several North African and Middle Eastern countries, where the situations can be less predictable compared to Norway.” Although cautious of throwing heavy investment up to the Barents Sea where visibility on projects is still 15 years in the future, OMV feels that
A FEW FACTS ABOUT STATOIL: • Equity production of 1.85 million barrels of oil equivalent per day in 2011 • Market capitalization of about $ 85 billion • 5.426 billion barrels of oil equivalent in proved reserves • Operator of more than 40 producing oil and gas fields • One of the world's largest net sellers of crude oil • The second-largest exporter of natural gas to Europe • The world's largest operator in waters deeper than 100 meters • A world leader in the use of deepwater technology • A world leader in carbon capture and storage • The largest retailer of oil products in Scandinavia, and one of the leaders in the Baltic states
February 2013 Oil & Gas Financial Journal • www.ogfj.com
17 Norway offers sufficient stability to invest for the long term. Krainer noted:
again Edison sees itself playing a key role in mid-Norwayâ€™s infrastructure
â€œOMV will be investing strongly in infrastructure in mid-Norway until 2017.
as a partner in the Norwegian Sea Gas Infrastructure (NSGI) project. Buo-
The company sees this as an area where OMV can have considerable pro-
naguro believed that this project would â€œserve as the access point for a
duction in the medium term. The production start-ups from this region are
future pipeline coming from the North.â€? Though Edisonâ€™s strategy is cur-
scheduled for around 2017, which will shorten the waiting time for any
rently oriented more around the North Sea where he sees â€œtie-back to the
bigger discoveries yet to be made in the Barents Sea.â€?
market is much faster and easier to establish than in other areas, like the
Strikingly similar in terms of its motivations and strategies is Italian E&P
company Edison. In May 2012 French electricity giant EDF completed
In 2007, Polish refining giant Lotos began its
the acquisition of the Italian junior and Raffaele Buonaguro, general man-
adventure in Norway. Lotos Norge CEO Gerhard
ager of Edison Norge explained: â€œEDF is showing a strong interest in the
Bauer explains that his company has made a stra-
upstream sector and in Edison as a company. With this support we are
tegic commitment to the upstream sector. Bauer
looking to transform our presence in Norway in
said that in the â€œperiod 2011-2015, it will com-
the coming years.â€?
mit $1.2 billion to its E&P operations to achieve a
Again Buonaguro echoed Krainerâ€™s view, on
100,000 barrels per day target by 2020 in which
behalf of Edison, saying that, â€œNorway plays a
the vast majority will come from Norway.â€? Where
key role within Edison's global portfolio, in part
Lotos differs is in not having high-risk international projects in need of a
thanks to the stability of this market. Norway
risk-free counterbalance. Nor is Lotos currently investing in infrastructure.
creates a relatively low-risk position for the company, as it moves into higher-risk regions.â€? And
Raffaele Buonaguro, general manager, Edison
Gerhard Bauer, CEO, Lotos
Instead, Bauer holds the ambition of rapidly transforming Lotos into a full spectrum E&P company on the NCS.
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Norway Oil & Gas report February 2013 “We do not only focus on exploration but on becoming a full E&P player on the NCS. I think all this is very well received in Norway and in line with the Norwegian strategic focus on long-term development,” said Bauer. Whatever their strategy, Norway continues to provide a safe haven and long-term growth opportunity for European downstream players in tough times. Transocean has proudly participated in important milestones as Norway advances its ofshore oil and gas industry, starting with providing the ﬁrst jackup built for Norway’s harsh ofshore conditions and the ﬁrst semisubmersible rig to work in the sub-Arctic year-round. Today, we operate the largest ofshore drilling ﬂeet in the country. Our ﬁve semisubmersible rigs and two modern ultra-deepwater rigs are all ideally suited for the HarshEnvironment of the Norwegian Sea, with four of these units outﬁtted for operations in the Barents Sea. Whether its multi-lateral records on the Troll ﬁeld or the most extensive drilling experience of any drilling contractor in the Barents Sea, Transocean brings a powerful combination of people, experience and assets to get the job done right.
The Risk of Norwegian Overenthusiasm Kjell Pedersen, president and CEO of Petoro, the Norwegian state company responsible for managing the country’s direct oil and gas license investments – a portfolio of $191 billion – expressed a note of caution to the country’s intense E&P activity. The danger, as he understood it, is that such frenzied excitement, ironically, could stretch the supply chain
Kjell Pedersen, president & chief executive officer, Petoro
too thin, limiting access to skilled labor and drilling rigs thereby driving up drilling costs to an unsustainable level and distracting the market from necessary investments in mature assets. He feared that instead of taking Norway to new heights, the weight of enthusiasm could collapse the floor of the industry. Pedersen said: “It is clear that Norway is too costly compared to other countries and some analysts say the difference between Nor-
That’s the type of performance you expect from the company that has been drilling oil and gas wells for customers for 43 years of the coasts of Norway. Transocean: succeeding in Norway.
way and the UK in drilling cost could be 45%.” In fact, drilling costs on the NCS doubled over the first decade of the 21st century and Petoro, which was designed as a purely financially-focused organization, whose key performance indicators revolve around profitability, has found itself becoming increasingly involved in the technical side of the business to find innovative ways to reduce costs. Petoro has been working closely with Norwegian NOC Statoil on new drilling concepts such as license groups buying and owning drilling rigs and extending drilling contracts to 6-8 years. Petoro also has been working with Statoil on new categories of rigs for light intervention operations (category A and D). Pedersen summed up: “We are doing a lot to try to reduce the overall cost, but some of the fundamental issues as to why Norway has come this high up on the cost curve are difficult to change. We are a rich nation of five million people, we have given ourselves the luxury of being expensive.” Asbjorn Olsen, managing director of Transocean, was also a little more sanguine in his assessment of the capacity problem. He agreed that although the market is currently undersupplied with rigs, he
disagreed that this was creating unsustainably high day rates. Olsen
February 2013 Oil & Gas Financial Journal • www.ogfj.com
19 said, “the day rates for standard floating rigs are in the low five hun-
wireless technology and driven by cost and safety, Knutsen sees the
dred thousands, which is not significantly above global averages. I
benefits for IOCs as much as for independents, believing that the
believe the ‘high day rates’ in Norway is a theme that has been over-
majors would be able to generate efficiency savings, while the young
played by the oil industry quite a bit. The lifting cost for oil in Norway
independents could reduce their human labor requirements in a tight
is not that much higher than in the rest of the world; it is really in the
midfield.” On the question of capacity, he continued that by 2016,
However, for Paul Horne, managing direc-
the number of mobile rigs on the NCS would increase to around 50
tor of KCA Deutag Norge, the leading fixed
from 33 today, in his view, restoring the supply balance.
platform drilling contractor in the North Sea,
Olsen saw the capacity problem slightly dif-
the advances in distance control over rigs
ferently: “this expansion in the number of rigs
does not mean that the oil and gas busi-
in itself represents a major challenge for the
ness is becoming less people-centric. A for-
industry, given that we will need to qualify new
mer roughneck of 15 years himself, Horne
people to operate them.” Through its acquisi-
stressed, “technology may provide us with
tion of Aker Drilling last year and a 40-year
the best automatic system in the world; yet,
history in Norway, Transocean has been able
Paul Horne, managing director, KCA DEUTAG Norge
Asbjorn S. Olsen, managing director, Transocean
at the end of the day, the real challenges are to have people with
of taking on operations. Yet, Olsen says that it is difficult for the com-
and effectively work with people.” He even touted the company’s
pany to expand further due to skills shortages.
location in Bergen for offering the closest point to many offshore
to establish a strong local labor force capable
the right skills who also have leadership and the ability to manage
Regarding whether they could bring in competence from the UK,
operations and believed that the integrated operations were a valu-
Olsen replied: “Norway is a very different market from a competence
able training tool and a complement rather than a replacement for
standpoint and you need a different set of technical skills and also
documentation of those skills with proof of competency. This creates some barriers for workers from the UK, for example, to work in Nor-
What’s the Rig Idea?
way.” For Olsen the shortage of people is the single most important
Statoil is experimenting with several drill-
challenge facing the Norwegian industry.
ing concepts designed to reduce operating expenses on the NCS. One of these is the
An Industry Without People
fit-for-purpose rig concept, which Magnar
From an HSE and cost perspective, the ideal for most oil and gas
Fagerbakke, current vice president for Market
companies would be to have no employees at all on offshore rigs;
& Contracts at COSL Drilling Europe, helped
this is exactly the direction that the Norwegian industry is headed.
to establish when he worked at Statoil more
Whether you call them smart fields, intelligent fields or integrated
than a decade ago. “The first time Statoil
operations, Norway is pioneering the movement to bring more of a
started looking at this was in 1997. In places
platform’s operations onshore.
like the Halten area there is a mass of subsea installations, flowlines
Magnar Fagerbakke, vice president marketing & contracts, COSL
Asgeir Knutsen, president of Emerson Pro-
and line pipes - a subsea spaghetti,” he said. Conventional rigs with
cess Management AS, one of the companies
dangerous anchors are no good and Statoil has around 500 subsea
paving the way for the integrated operations
wells – this represents around 12 percent of the global total. Fager-
concept, said: “Most or all of the major oil
bakke saw the movement towards light intervention rigs and Cat-
companies have envisioned this as part of
egory J, Jack-up rigs as highly logical to reduce moving ill-equiped
their production concept. I see a turning point
and expensive conventional rigs around sensitive areas.
now where technology is mature enough to let companies achieve the integrated operations model.” Enabled by recent advances in
Asgeir Knutsen, general manager, Emerson Process Management
Statoil has claimed that the NCS is short of midwater rigs or category D. Almost all wells on the NCS are shallower than 500 meters and it is only in the very West of the Barents Sea that the depth
www.ogfj.com • Oil & Gas Financial Journal February 2013
Norway Oil & Gas report February 2013
descends to 1,500 meters. COSL’s operations began in Norway in
around 30 years ago and now after 50 years
2007 on the back of contracts from Hydro and targeted this midwa-
the establishment of the Arctic basin. Norway
ter segment. Fagerbakke claimed: “Our units cost approximately half
is by no means alone in its Northern ambi-
the price of the deepwater units which have entered the Norwegian
tions, with China recently vying for observer
market in recent years. COSL rigs are therefore already well suited
status on the Arctic Council. Interest in this
for the NCS.” He believed that this trend could have a positive effect
region is heating up.
on cost reduction.
However, the transition is a politically sen-
However, regarding Statoil’s idea for license groups to potentially
sitive topic: Moe’s own political party in the
Ola Borten Moe, minister, Ministry of Petroleum and Energy
own the rigs themselves on fields like Troll, Oseberg and Gullfaks,
government coalition, the Center Party, opposes this direction. Moe’s
Fagerbakke remained slightly skeptical. He believed that transferring
overtures to the oil industry to press on to the Arctic were publicly
a high value asset from an organization taxed at 28 percent onto the
denounced by Prime Minister Stoltenberg who affirmed that this
balance sheets of a company taxed at 78 percent would make the
was not government policy. Moreover, all impact studies on Lofo-
idea financially difficult to implement.
ten, much-coveted by the industry, but also one of the most important spawning grounds for Atlantic fish, have been put on hold until
A 50-Year Journey to an Uncertain Destination
after the September 2013 election. There are big changes facing
“Over the last 50 years, Norway has opened approximately half of
Norway on how far to push exploration and it will be interesting to
the total production area available and we are now in the process
see what comes out of the tight race predicted between the incum-
of establishing a new third petroleum province in the Barents Sea.
bent Labour-led government and the Conservative opposition in this
By working on this strategy, we see the potential to arrest and even
reverse Norway's production decline,” said Norway’s Minister of
For Dolphin Geophysical, a company with a seven percent share
Petroleum and Energy Ola Borten Moe. The major finds on Skru-
of the global seismic market, Norway still represents 30 percent of
gard and Havis in the Barents Sea in 2011 gave credence to the idea
their revenues and the Barents Sea is a huge opportunity. Dolphin
that the Arctic offers the silver bullet for Norway’s oil decline and
Geophysical CEO Atle Jacobsen said: “We have a lot of activity in
Norway’s 22nd licensing round, which offered up 72 licenses in the
the Barents Sea in 2012 and this will remain buoyant in 2013, driven
Barents Sea, has gathered unprecedented interest from oil and gas
by the 22nd licensing round and the awards which will come. We
companies seeking a share of the pie.
are now looking at the 23rd licensing round
Moe saw a gradual upward progression in the industry from Ekofisk
because in this industry you need to remain
in the North Sea back in 1969, to the opening up of mid-Norway
one step ahead. The former grey zone with Russia and the Jan Mayen ridge are two huge potential areas, and we have already worked on behalf of the Norwegian Petroleum Directorate in this region. It will be interesting to see if these new areas are included in the 23rd
Atle Jacobsen , chief executive officer, Dolphin Geophysical
round.” As Jacobsen saw it, whether, “the government chooses to open up acreage is a highly political discussion. However, with successful development of the Barents Sea region, the pressure would be taken off developing areas such as Loftoten [closer to the Norwegian Arctic shoreline] which will be a much tougher political decision.” Jacobsen therefore believed that the degree of industry pressure to open up Impressive 12 streamer spread off the back deck of Polar Duchess, she is the sistership to our flagship vessel Polar Duke.
this key fishing region depended on oil companies identifying strong resource potential from Norway’s 22nd licensing round.
February 2013 Oil & Gas Financial Journal • www.ogfj.com
Norway Oil & Gas report February 2013 Stranded up North Market access is the freezing-cold elephant in the room in any discussion of the industry’s movement to the Arctic. 2012 was a year when the ambitious Shtokman project in Russia crumbled as its target market, the US, discovered that it already had bountiful quantities of natural gas locked up in shale deposits. In Norway, the lucrative European markets for natural gas are more than a thousand miles from any potential gas discovery in the Barents Sea. Norway’s first gas field in the Barents Sea 187 km Northwest of Hammerfest, Snovit, started production in 2006 and sends its gas to a liquefaction facilitiy at Melkøya on Norway’s Arctic coastline. However, in 2012 the decision was taken by Statoil not to develop a second LNG train at this facility, which in the eyes of Erik Karlstrøm, CEO of North Energy, is indicative of the industry moving in favor of a pipeline solution. Karlstrøm said, “the activity level and industrial development in this part of Norway is completely dependent upon being able to commercially sell gas to the market. To us, the real competitiveness of the Barents Sea is based on financing pipelines running to
Europe.” In his view, huge quantities of unconventional gas from
WEN AH QUL AK For more informaon on SHarp, Dolphinís Broadband product, visit www.dolphingeo.com/SHarp
23 RETURN OF THE FIXED PLATFORM
he concrete drilling platform, a gravity-based structure, was a uniquely Norwegian brainchild. Sturdier, but much more expensive than steel platforms, only around 50 “condeep” platforms have ever been built, compared to 5,000 from steel. Looking at the last decade, only five concrete platforms have been built: two GBS platforms on Sakhalin 2 were build for Shell and one on Sakhalin 1 for ExxonMobil in Russia, one LNG receiving terminal was built in the Adriatic Sea near Venice, and one more is being designed Christian Norgaard for the Hebron field in Canada. Madsen, chief executive Norwegian engineering consultancy firm, Multiconsult was involved officer, Multiconsult in all of these projects. Its CEO, Christian Norgaard Madsen, now believes that these concrete structures are about to go through a revival as the industry heads into the Arctic. Madsen saw that the development of operations in the Barents Sea, where the water depth is rarely below 100 meters, suited the condeep structure. He explained that structures “can withstand drifting ice flows, they last longer, you can drill whilst protected inside one of the concrete shafts, you can also add thousands of tonnes of load on the topside,” pointing out that Statoil was seeking to install more compressors. For Madsen, these structures had already proved their worth in Sakhalin and would be well suited to other regions, such as Norway’s Barents Sea and Russia’s Kara Sea. In order to support this direction, Multiconsult last year acquired Barlindhaug Consult, doubling the company’s headcount in the North of Norway and is heavily involved in Arctic research, within the Sustainable Arctic Marine and Coastal Technology (SAMCoT).
You need long experience to handle challenging conditions
Asia-Pacific would already swamp key markets like China. So, Norway should exploit its competitive position close to the European market. North Energy already sits on the Norwag gas discovery in the Barents Sea but needs market access. Fortunately, Karlstrøm believes that the quantity of stranded gas has already reached the crucial tipping point where a pipeline solution becomes the preferred option. Norwegian pure-play exploration company, Concedo, is another
Erik Karlstrøm, CEO, North Energy
firm with its eyes fixed on the commerciality of the Barents Sea. With two non-operated licenses to be drilled on blocks to the west of the Skrugard find in 2013 and 2014 Geir Lunde, managing director of Concedo, is under no illusion that the Barents Sea is a difficult sell. Lunde said: “In Norway, the threshold for a tie-in
Multiconsult has experience from some of the most important oil and gas projects ever carried out in the north.
development is around 20-30 million barrels, a standalone would need above 100 million barrels and in the Barents Sea this goes up to 200 million barrels.” He said if the average discovery takes around 10 years to develop in the rest of Norway, one could assume much longer for the Barents Sea. Concedo therefore chooses to balance its risk across Norway’s three oil provinces, but the hope is always to strike big in the Barents Sea.
Geir Lund, managing director, Concedo
Responsible Risk-taking The potent public scrutiny that has borne down upon the oil and gas industry since the 2010 Macondo disaster was given renewed strength in 2012 following Christophe de Margerie’s
www.ogfj.com • Oil & Gas Financial Journal February 2013
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Environment Asset & Integrity Safety & Risk Production & Operation Subsurface, Drilling & Well Reputation & Communication
Norway Oil & Gas report February 2013 note of caution about the risks of Arctic production being excessive. And as concerns mount about the ramifications of an oil spill in Arctic waters, international eyes are turning to Norway as the country with the safest continental shelf – in spite of its challenging environment. Much of Norway’s climate of safety can be attributed to the work of Magne Ognedal, one of the
Magne Ognedal, director general, Norwegian Petroleum Safety Authority
longest serving elders in the Norwegian oil and gas industry and president of Norway’s Petroleum Safety Authority (PSA). Duty-bound to create the safest E&P environment, Ognedal said that he was profoundly influenced by the 1980 disaster on the Alexander Kielland semi-submersible rig
Stig H. Christiansen, CEO, Add Energy
operating on the Ekofisk field, that capsized and killed 123 people, just one week after he began working for the PSA. Ognedal claimed that the PSA’s approach to safety had changed little over the last 30 years, even in the face of huge pressure postMacondo and he attributed the success of Norway’s safety regime to the decisions made in 1985 to reorganize the regulatory regime. He said: “As a result of that reform in 1985, we changed the approach from prescriptive to functionality-based regulations” in contrast to prescriptive regimes in other countries like Russia. International authorities from the US and Canada are collaborating with the PSA, and other countries are seeking to emulate it. Stig Christiansen, CEO of Add Energy, a Norwegian company specializing in well integrity and crisis management, notably involved in resolving international blow-outs from Montara 2009 and Macondo 2010 through to Elgin in 2012, affirmed that Norway “is the safest shelf in the world and many emerging countries look to the Norwegian model.” He noted that recently New Zealand was having the same debates as Norway had held many years ago and that for Add Energy’s fast growing business in Australia and New Zealand knowledge of Norway’s regulatory environment was invaluable. Christiansen praised Norway’s authorities for resting ultimate responsibility on the shoulders of operating companies. He said it is paramount as companies extend operations to the Arctic and that, given the unacceptability of a spill in this region, the industry would have to “prove that we are willing to invest and able to understand and manage the risks.’ Part 2 of our special report on Norway, dedicated to the service sector, will soon follow in an upcoming issue of Oil & Gas Financial Journal.
February 2013 Oil & Gas Financial Journal • www.ogfj.com
For exclusive ITVs and moreÂ insights, log on to energy.focusreports.net
Interview with Ola Borten Moe, Norwegian minister of petroleum and energy
Ola Borten Moe, Norwegian minister of petroleum and energy Focus Reports: There are pressures in the Norwegian parliament to slow down the pace of oil and gas industry development to allow the rest of the economy to catch up. Is the oil and gas industry in need of a slow-down? OLA BORTEN MOE: I experience broad support in our parliament when it comes to oil and gas policy. That said, the success experienced by the industry as well as the wealth that we are generating confers on the Norwegian government a strong responsibility towards Norwegian society. In the years to come, the cost inflation will increasingly require Norwegians to find new innovative ways to compete internationally. Norwegians will therefore have to work smarter in the future than we do today and this is a continuous task for Norwegian society. We have established a fiscal rule limiting the spending of proceeds generated by the petroleum industry to just four percent of the Government Pension Fund. The reason for this limit is that the moment we start spending this wealth simply to go on holiday is the moment we turn a great opportunity into a limiting factor on our development as an economy. Furthermore, the oil and gas industry is without doubt the most innovative business in Norway and is capable of competing admirably on a global level. In my view we need to keep this pressure on to allow this innovation to continue.
Ola Borten Moe, NORWEGIAN MINISTER OF PETROLEUM AND ENERGY
FR: Regarding the development of the Norwegian Continental Shelf, what is the danger of “over enthusiasm” leading to skills shortages and further cost inflation? OLA BORTEN MOE: It is true that we need to stay focused on access to skilled workers; we need to look at costs relating to the rig market and overall drilling capacity. We also need to maintain our focus on improving fields’ recovery rate even though it is just as interesting to move towards frontier discoveries. Norway is currently in a unique position within Europe. Our economic challenges are very different to those of the rest of Europe, yet we are part of the same labour market. Many Norwegian companies are therefore recruiting outside of Norway, which is good for Norway and the workers
Norway is currently in a unique position within Europe. Our economic challenges are very different to those of the rest of Europe, yet we are part of the same labour market.
who come here. Norway is growing and our population is increasing with a good demographic balance and therefore the number of people that the oil and gas industry will be able to draw upon is increasing every year. On the issue of cost there is no easy answer; there are basic market forces at play. However I do believe that this is one of the factors driving the industry into an even more innovative mode. The level of cost is so high that you need to work smarter to unlock resources. There is a tremendous drive to create efficient technologies and improve working procedures throughout the value chain. Cost inflation will be an increasingly important issue for Norway over the coming years and the most obvious way to deal with this challenge is to develop technologies, which can bring operating costs down by generating greater efficiencies. Norway is growing as one of the largest offshore markets globally and this is a great testing facility for technologies for the rest of the world.
FR: The 22nd Licensing round marks the most significant step towards Arctic oil and gas production. How do you make the judgment call on what is acceptable risk in extending E&P into this sensitive area? OLA BORTEN MOE: We have for 30 years been operating far beyond the Arctic Circle but no further than they are operating in other countries like the USA, Russia and Canada. However, what these countries lack and what Norway can take advantage of is the mild climate in the North thanks to the Gulf Stream. The parts of the Barents Sea that we have opened up are ice free, which makes a difference from an operating and cost perspective. If we move further north then we will operate in a harsher climate with different challenges and we are not ready for that yet.
In the years to come, the cost inflation will increasingly require Norwegians to find new innovative ways to compete internationally. Norwegians will therefore have to work smarter in the future than we do today and this is a continuous task for Norwegian society. In Norwegian history, Ekofisk was Norwayâ€™s first major discovery located at in the very southern part of the country. 30 years ago we opened up the middle parts of Norway and we have taken over 50 years to reach the Barents Sea. We have applied a stepwise approach when exploring these areas. This is a history of an industry taking on new challenges as they demonstrate their improved technological capabilities and learn to handle the challenges associated with the production environment. Norwegian oil and gas history has not been written yet; we are still in the midst of this progression towards the North. My own target for the extension of the oil patch is to explore the resources available as efficiently and responsibly as possible. For this to occur we need healthy competition on the NCS. Large international companies have the insight and technologies to contribute to this development and I encourage them to put in highquality applications for the licenses in the Barents Sea. We also need companies specializing on the other parts of the value chain to contribute with new approaches. There are many operators and even more companies qualifying for the shelf, which is very exciting. n
Interview with Magne Ognedal, director general – Petroleum Safety Authority
Magne Ognedal, director general – Petroleum Safety Authority Focus Reports: Over your watch the injury rate for offshore drilling operations has fallen from 16.8 to 9.2 injuries per million work hours. What have been the most important steps that you have taken to making Norway a safe petroleum production environment? MAGNE OGNEDAL: The decisions we made in 1985 to reorganize the regulatory side of the business were perhaps the most important for everything that has followed since. The old petroleum directorate had a very central role in not only resource management, but also safety. As a result of that reform in 1985 we changed the approach from prescriptive to functionality-based regulations. We formally introduced the concept of risk management in a special royal decree. Of course the responsibility distribution that is evident in the regulation has also been a success story, but the challenge there was to make the organizations that should have responsibilities take them on properly, meaning oil companies, contractors and unions - they have not only rights but duties as well. To get this into practice took some time and effort. We developed our modern way of thinking in the years leading up to the decisions made in 1985. At this time we were of great interest to many. Furthermore, regarding Lord Cullen’s investigation into the Piper
Magne Ognedal, DIRECTOR GENERAL – PETROLEUM SAFETY AUTHORITY
Alpha catastrophe this greatly increased the interest of our activities. Regarding employers and employees and government, Norway has had a long tradition in which unions have a very clear role and they are listened to and they have rights in law. The role that unions and workers have is very formalized.
FR: What was the impact of Macondo on shaping the Norwegian production environment over the past couple of years? MAGNE OGNEDAL: When Macondo happened, there was a great deal of uncertainty among politicians, who asked whether we should stop deep-water drilling. My professional advice was that we should not do anything until we understood what went wrong, and while this discussion lasted from spring to summer, fortunately in the end we took no action. If I’m going to stop something I need a good reason to do it. As information started to come out, we started to digest the information to see if there was something in the way we worked that needed changing, should we adjust priorities, should we do something to the regulations, all these questions were coming up. The result of all the work we have done so far is that we don’t need to do anything to our systematic approach, we don’t have to overhaul the regulations, although there may be a couple of additions that we want
to include but we haven’t completely decided yet. Now we are waiting for the Chemical Safety Board’s report and we will digest that one too.
FR: How do you see the risk environment changing as the Norwegian E&P industry moves to the Barents Sea after the 22nd licensing round? MAGNE OGNEDAL: There are new risk contributors in the far north arising from the added factor of being surrounded suddenly by ice. But the regulations can stay the same. When you do the risk evaluations you have to take into consideration the new contributors. The risk perception changes but the regulation doesn’t have to change - these regulations already cater for this. Ice is not predictable and in the North you have extreme weather conditions, darkness, environment issues, a need for better working clothes etc. From an emergency response point of view, we have to consider the issues of for example moving sick people into hospitals or blowouts. The last issue is the competence and the capacity of the company that is going to operate in challenging conditions. Not all companies can do it. Small companies must be pre-qualified and there exists a pre-qualification system in which we participate. When it comes to an actual operation, you need to demonstrate that you have the competence and capacity to carry it out safely because it is the operator that is ultimately responsible, not the contractor(s).
FR: Do you see in these northern territories a potential for further collaboration with other countries interested in Arctic exploration from Canada to Russia? MAGNE OGNEDAL: The Arctic Council looks at certain issues, but that is a big group of people. We recently signed a bilateral agree-
ment with the US oil and gas safety authority where we mention collaboration in the high north Arctic as an issue. We have colleagues in Canada in the two offshore provinces, and also the National Energy Board that has responsibility for the high north, so we will take some initiatives to work more closely together on arctic issues. In Russia there has been a collaboration project run by the DNV. Norway and Russia have been evaluating standards that the industry is using and determining their usefulness in the Arctic. I think in countries like the US, Canada and Norway, everyone essentially agrees that if something goes wrong in one country it will affect everyone else and therefore we must work together to avoid catastrophes anywhere, especially the Arctic. It’s an investment that everyone is willing to take so I see that as today’s attitude, which didn’t exist ten years ago.
FR: As a final question, what would you say was your personal ambition for maintaining safety on the Norwegian continental shelf? MAGNE OGNEDAL: I became director of safety in the old NPD just before Easter 1980. Two weeks later, we had the Alexander Kielland catastrophe. 123people were killed, and that was a tough start as a safety director. That has been with me all this time and I feel it has been my personal duty to help any way I can to avoid something like that happening again. Even though I did not know any of the victims, this incident had a tremendous impact on me as an individual. So I am constantly working to ensure that this sort of event never happens again. n
Interview with Kjell Pedersen, president and CEO of Petoro:
Kjell Pedersen, president and CEO of Petoro Focus Reports: Petoro’s primary remit is to maximize the value for the State’s Direct Financial Interest (SDFI) in Norway’s oil and gas assets. To what extent is the organization’s role still evolving eleven years after Petoro was founded? KJELL PEDERSEN: Our primary objective remains in securing the value remaining in the big mature fields and where government shares are very high - ranging from 30 percent to 58 percent. Getting the maximum out of those is key, particularly when many other companies’ focus may be on other opportunities than mature areas. Mature field strategy remains our main concern, although Petoro’s participation in some new discoveries put an extra stress on prioritization within this strategy. Petoro has had the same responsibilities since day one in trying to maximize the value of our portfolio. The way we are set up as a company drives us towards working closely with other companies. This involves taking an active part in the licenses and joining the financial and operational aspects of a project in order to ensure that those aims are being met. Whilst Petoro’s fundamental role has not changed, a changing business environment has led us to strengthen our technical side. Because we have always known that in the mature licenses offshore Norway, which essentially are joint ventures of large international companies, we will only be a credible and convincing partner if we put forward solid arguments from a technical perspective and in a business-like manner.
Kjell Pedersen, PRESIDENT AND CEO OF PETORO
Petoro has always been recognized as a business that works within the industry and is basically doing the same job as every other company in trying to maximize and protect the value of their resources. That is our role - maximizing the value for the owner, which happens to be the government. We had a net cash flow of $15 billion in the first half of 2012, and we have been in excess of $18 billion annually for the past few years, sometimes as much as $26 billion in some years and I hope we can continue to contribute funds on that level.
FR: You are in charge of $191 billion worth of assets in Norway - how do you ensure that there is a motivation to push this value higher? KJELL PEDERSEN: When the company was formed, its creators made it very clear that Petoro was going to be a commercially-oriented organization, and that it should hire business people. When establishing the
That is our role – maximizing the value for the owner, which happens to be the government. We had a net cash flow of $15 billion in the first half of 2012, and we have been in excess of $18 billion annually for the past few years
organization back in 2001-2002, people were hired from 34 different companies, all of them with significant business experience, mostly from large companies operating in the Norwegian oil and gas industry, but also from the finance sector and other business. Personally I came from ExxonMobil, whilst we have other executives from BP, Shell, Statoil, Hydro, and others, and the same goes for most of the people working here.
FR: What is the main contribution Petoro delivers to a license and how do you help your private sector business partners? KJELL PEDERSEN: Firstly, we have a portfolio that is very large - we are managing shares of 33 producing fields on the NCS. This means we can bring knowledge and experience from our other fields, sharing best practices. The size of our company (near 70 people) makes it very transparent; information is communicated clearly and efficiently, and we can bring this experience into a very busy partnership that may not have that same ability. Secondly, although an operator may have thirty people working on the subsurface side of a field, there might only be two or three that work long-term development of the field. The other 27 or 28 will often times be working on a day-to-day basis trying to find out where and how to drill the next well or how to optimize daily production. If Petoro put two or three people to work on the field reservoir on long-term development, we can contribute greatly to the development of that project. Thirdly, Petoro has not experienced any capital constraints in terms of investing in profitable projects in Norway. The government has accumulated huge capital reserves and proved willing to invest as long as projects are financially robust. This was so, even during the financial crisis in 2008-09, when other companies introduced a capital disci-
The cost issue is probably the most difficult problem in Norway right now. One of the main cost drivers is the rig rates and the overall cost of drilling. Some analysts say the difference between Norway and the UK in drilling cost could be 45%. pline that created some uncertainty even about projects, which were considered profitable. Also, with the introduction of many more smaller companies offshore Norway, financial solidity has become more of a topic than before. In some cases small companies struggle to get banks to provide the necessary funds.
FR: How do you see Petoroâ€™s role in trying to reduce the cost level on the NCS? KJELL PEDERSEN: The cost issue is probably the most difficult problem in Norway right now. One of the main cost drivers is the rig rates and the overall cost of drilling. We have had reports showing that reducing the differences in government requirements between the Norwegian and British sectors, could make it easier to move rigs across the border, thereby leveling out some of the cost differences. Some analysts say the difference between Norway and the UK in drilling cost could be 45%. We are doing a lot to try to reduce the overall cost but some of the fundamental issues as to why Norway has come this high up on the cost curve are difficult to change. We are a rich nation of five million people, we have given ourselves the luxury of being expensive, and we need to ensure that the effectiveness and efficiency of what we are doing is better than most others in order to remain competitive. n
Interview with Torstein Sannes, managing director of Lundin
Torstein Sannes, managing director – Lundin Focus Reports: The Johan Sverdrup discovery - formerly Aldous/Avaldsnes - was made in a 40-year old production province, close to existing infrastructure. Was this just a piece of remarkable good luck or was there something you had spotted in your E&P strategy? TORSTEIN SANNES: I think it was a combination of both. Firstly when Lundin entered Norway in 2003 we put together a very focused strategy for organic growth. We sought to define new exploration models and we placed our belief in the prospects, which came out of these models. Our strategy was oriented around inverted Jurassic Highs and the Utsira High was one of these. Lundin’s E&P strateg y has been extremely successful and has produced a major discovery every three years since 2004 with the Alvheim Volund discoveries. In 2004 Lundin applied for a license which resulted in the Luno (since renamed: Edvard Greig) discovery in 2007, for which Lundin is the operator. Then of course we have 2010’s discovery of the Avaldsnes. Lundin was exploring around the Utsira High, putting the acreages together. I believe Lundin was one of the first companies to realize that there might be some oil and gas migration into the eastern part of the old high. It was this realization, which resulted in us making the Avaldsnes discovery as the operator of PL501. Statoil, who was the operator on PL265 then drilled their Aldous discovery a year later resulting in what has become the Johan Sverdrup
Torstein Sannes, MANAGING DIRECTOR – LUNDIN
discovery. Both Statoil and Lundin have since then been engaged in appraisal drilling which so far has been very successful. Every time we drill a successful well it confirms the magnitude of this discovery. We are both now moving our rigs to drill more appraisal wells and it is fair to say that in the next two years, Lundin will start to drill the other side of the old high on the south west side, where Lundin is the operator with sizeable working interest. We believe that all you need in this region for another discovery is reservoir quality rocks above the ground area OWC. Indeed, there may be more discoveries to come - these are exciting times. Statoil now estimate that first oil from Johan Sverdrup will be in 2018. As for the element of luck, the prospect has been laying there for the past 45 years and I sometimes wonder: What if nobody
I believe Lundin was one of the first companies to realize that there might be some oil and gas migration into the eastern part of the old high. It was this realization, which resulted in us making the Avaldsnes discovery
Torstein Sannes with Zuzana Kudelova of Focus Reports
had gone after it and had the guts to drill it? It certainly feels like there was an element of luck in making this discovery. However everyone forgets that we spent USD 600 million in this area before it became a big success story.
FR: What does a discovery like this represent for Lundin’s further growth in Norway? TORSTEIN SANNES: The discovery has opened several doors for the company. In the past, the license papers stated that since Lundin was very small we needed to find partners for drilling. Other companies were a little reluctant to partner with us in the beginning but since the Avaldsnes discovery we have not been short of companies queuing up to join us. In terms of finances, traditionally Lundin has borrowed money from the parent company to pay for our capex. Lundin pursues an organic growth model and our Norwegian income from last year was roughly USD 1 billion so we have been largely funding ourselves. Nonetheless, when it comes to paying 50 percent of the Edvard Grieg platform, with the whole development likely to approach NOK 24 billion (USD 4.18 billion), we need the support of the parent company. For this expenditure the
We believe that all you need in this region for another discovery is reservoir quality rocks above the ground area OWC. Indeed, there may be more discoveries to come - these are exciting times. Statoil now estimate that first oil from Johan Sverdrup will be in 2018. parent has borrowed USD 2.5 billion, which is actually 1 billion, more than we need. The loan was oversubscribed to the tune of nearly USD 5 billion so Lundin’s E&P success in Norway means that there is no problem in finding financing for our continued development. From a production standpoint, our oil production has been increasing steadily and by 2015 we are looking to have doubled present production. However, when Johan Sverdrup comes on-stream in 2018 or later we will see our production increase substantially again. Statoil have been quoted as seeking 500,000 /day from Johan Sverdrup after 2.5 years of production. Lundin can look at having around 25 percent of Johan Sverdrup’s production and we are the second largest owner of the field. It is also not just a good discovery in terms of quantity but the value per barrel produced. Johan Sverdrup will produce very valuable barrels because the water depth is just 107-115m, there is an oil pipeline at Grace field and a gas pipeline either to the UK or to Sleipner so the infrastructure is already there. Johan Sverdrup does not have any excessive pressure, temperature, CO2, H2S, deep-water issues. This is the type of discovery that practically comes ready packaged. n
Interview with Erik Karlstrøm, CEO of North Energy
Erik Karlstrøm, CEO – North Energy Focus Reports: What is your perspective on whether there will be a liquefied natural gas (LNG) option or a pipeline extending to the North, to make stranded gas finds commercial? ERIK KARLSTRØM: Today on the Snøhvit license, Statoil decided to postpone the LNG train, which will be unpopular among some, but the activity level and industrial development in this part of Norway is completely dependent upon being able to commercially sell gas to the market. To us, the real competitiveness of the Barents Sea is based on financing pipelines running to Europe. We are now getting close to the tipping point where the pipeline becomes the preferred solution. Huge volumes of shale gas will be commercially viable in the back yard of China and in East Africa. All these countries aim to sell LNG to China and Japan. Competing with other gas suppliers and using the Northern Passage over Russia to supply China, is unlikely to be commercially competitive, so gas will go to Europe, where the demand is still high.
FR: What will this decision mean for North Energy? ERIK KARLSTRØM: The way we see it is that we got a position in the Barents Sea before many of the big companies of the world came to compete. North Energy sees today’s decision to postpone the LNG decision as a very important milestone for the devel-
Erik Karlstrøm, CEO – NORTH ENERGY
opment that we predicted. We also made an agreement to work with Lukoil in this next licensing round, and there are a lot of gas prospects that will be awarded in the upcoming licensing rounds. With the expected discoveries over the next three years, there will be enough gas for a pipeline. As expected, our share price indicates that the gas we are sitting on now has no value whatsoever, but this will change once the gas pipeline has been decided. Currently, no location worldwide can compete with the Barents Sea. Everybody wants to get into the Barents, and we are sitting on data, experience and a strong position; we have quite a good bargaining chip.
FR: What is your final perspective on the benefit of this industry direction for the local population in the North or Norway? ERIK KARLSTRØM: Five years ago an oil company would go to Technip or a big Korean company to build an FPSO. Nowadays you
Everybody wants to get into the Barents, and we are sitting on data, experience and a strong position; we have quite a good bargaining chip.
can use a lot of off-the-shelf technology and modifications start the same day, not after ten years. This means that people from the North will find these jobs because an employee from Stavanger will not want to repeatedly travel up to the North for intermittent work. The potential jobs created represent large numbers for the area. However huge infrastructure projects to support the industry will require those in the North to pursue a different education. The Hammerfest area has already gained a lot from activity extending into this region. Speaking from a northern perspective, I would like to say to politicians that as a country Norway should make its own decisions in the North. Northern Norway is a part of the country and we should help achieve Norway’s Arctic goals. Living in the far North is a valuable experience, and the business side takes care of itself. Thankfully some politicians now have this perspective.
FR: Russia is fairly new to Arctic exploration. Why was it that you formed partnerships with Russian companies? ERIK KARLSTRØM: The offshore geology that we have in areas of the Barents Sea like Norvag can be found onshore in places like Murmansk, and Russia can handle onshore technology better than they can offshore. There is cooperation and a mutual exchange of information between the two universities, where we employ postdoc students, doctors in geology that work together in small dedicated teams. Russia’s onshore experience can therefore contribute a lot to our understanding of the offshore environment in this region. Teaming up with a company like Lukoil has its pros and cons; you have to ensure a balance, and that you do not expose yourself financially. You also have to ensure their dependency on you in order to main-
The real competitiveness of the Barents Sea is based on financing pipelines running to Europe. We are now getting close to the tipping point where the pipeline becomes the preferred solution. tain that balance. North Energy knows a lot about exploring in this area, which I think the Russians appreciate and respect.
Do you see the possibility of crossing the border? FR: ERIK KARLSTRØM: Yes, as I think the Russians are looking to us for technology and once relationships have established themselves, and they can see that we work successfully, we may look for opportunities on the Russian side. With acreage access in the Arctic comes a clean-energy responsibility, and I think Russia understands this. I also think all the Arctic countries have a different agenda when it comes to the climate and environment. Such collaboration will certainly get us a pipeline and put Norway at the forefront of controlling the market. Europe will need gas and Norwegians should manage it since they have proven that they can and Norway is in one the most convenient locations to manage gas. Norway has successfully managed diplomacy with Russia for a long time. It is in everybody’s interest to have a responsible stakeholder to operate in the North. Norway being a small country, it is not perceived as a threat in this region; similarly I think it is easier for the big guys to agree to have a small company like North Energy involved in their work. n
Interview with Magnar Fagerbakke, vice president for Market & Contracts at COSL
Magnar Fagerbakke, vice president for Market & Contracts at COSL Focus Reports: Drilling EuropeGlobally, COSL is seeking to increasing the international portion of the business to 40 percent by 2015. How does Norway fit within this internationalization drive? MAGNAR FAGERBAKKE: Norway represents the first step for the companyâ€™s international expansion. Soon COSL Drilling Europe will have five units in operation in the North Sea area in both Norway and the UK: two accommodation units and three drilling units. There is a fourth drilling unit on its way and when this drilling unit has been awarded a contract, a new strategy will be launched by COSL. What we need for our strategic direction is units which can drill in water depth up to 1500m, to be capable of drilling wells in these geographical areas. This covers the Barents Sea area as well as Greenland. Most of the Barents Sea is only down to 500m of water and to the very West of the Barents Sea the depth goes down to approx. 1200 1500m, so our winterized drilling unit number four is a perfect match for these environments. 14 new rigs are projected to join this market in the period 2013 to end 2015. FR: What is your perspective on the attractiveness of Norway as a rig market? MAGNAR FAGERBAKKE: I started to work with the rig market back in 1997 when there was an upturn in the market. However, in Q31998 board members of some of the
Magnar Fagerbakke, VICE PRESIDENT FOR MARKET & CONTRACTS AT COSL
major drilling contractors started to sell their shares, which was a indicator to move out of the rig market and there was a significant decrease in demand from 1999 onwards as a result of the drop in oil prices. In summer 2001 Statoil had 12 drilling units on contract in Norway and many of these rigs were left to go off contract reducing the demand side significanly. Therefore by Q3 2003 there were only seven semisubmersibles working in Norway, five for Statoil and two for NorskHydro. Contrasting the situation in 2003 with today (December 2012), we now see nine jackups working in Norway, one drillship and 24 semi-submersibles making 34 drilling units in total. Two more rigs will start in early 2013, the Leiv Eiriksson from Ocean Rig and the West Hercules from North Atlantic Drilling. COSLPromoter will start on her 8-year contract with Statoil on the Troll field at the end of 2012. There are in addition a number of new builds due to
Currently there is a fantastic increase in the activity level, something never before been seen in Norway. The market is very good for drilling contractors.
What we need for our strategic direction is units which can drill in water depth up to 1500m, to be capable of drilling wells in these geographical areas. This covers the Barents Sea area as well as Greenland. Magnar Fagerbakke with Chiraz Bensemmane of Focus Reports
come to Norway including the COSLProspector, four Songa rigs, the Island Innovator (2013), Rowan Drilling with 2 jack-ups and Maersk supplying three more. It is clear that Norway has become a very attractive market for the drilling contractors.The oil price is key in determining the attractiveness of the market and the rig rate. More than 95 percent of the rig rate is linked to the oil price so the correlation is very strong. The oil price is especially dominant in Norway because the rig rate is made known when a contract is decided upon. The oil companies here are all using more or less the same breakeven price. Currently there is a fantastic increase in the activity level, something never before been seen in Norway. The market is very good for drilling contractors and you can demand a slightly higher rate because of the 2:4 system, requiring three shifts compared to 2:2 in the UK. Essentially, if you need 110 people to man a rig in the UK, you need 165 in Norway and this represents a significant difference in costs.
FR: Statoil is driving forward a â€œfit-for-purposeâ€? rig concept to bring down costs. How will this affect the market and your operations? MAGNAR FAGERBAKKE: COSL in Norway was
essentially founded on two contracts with Hydro back in April 2007. These are eightyear contracts with options in addition. The rigs we brought to the Norwegian market were perfect for the operational environment drilling down to 500m. There is only one field in Norway in production deeper than 460m which is the Ormen Lange gas field. Our units cost approximately half the price of the deepwater units which have entered the Norwegian market in recent years. COSL rigs are therefore already well suited for the NCS and Statoil has stated that COSL units are very close to what they are looking for. The overall shift towards purpose built rigs makes good sense. Statoil has a large number of subsea wells which need to be maintained and you need purpose built units to be efficient. The first time Statoil started looking at this was in 1997. In places like the Halten area there is a mass of subsea installations, flowlines and line pipes - a subsea spaghetti. This means that you cannot use your anchors without having a risk for damaging such installations if something should happen to the anchor chain and anything falling from the rigs could cause a massive oil spill. This is among other reasons why Statoil has been working on the Catergory D rigs, as well as on a Category J (Jackup) rig and light well intervention units. Statoil has been proactive in meeting the need for lower-cost specialized units fit for purpose on the NCS. n
Interview with Asbjorn Olsen, managing director – Transocean
Asbjorn Olsen, managing director – Transocean Focus Reports: Having recently returned to the Norwegian market, what is your perspective on the current high level of E&P activity in Norway from a drilling contractor standpoint? ASBJORN OLSEN: According to a study for the Norwegian Shipowners’ Association, we are at the start of a major growth period on the Norwegian Continental Shelf and the number of rigs that will be required is on the increase; today there are 33 rigs operating in the Norwegian market and this figure looks set to grow to approximately 50 by 2016, according to the study. This expansion in the number of rigs in itself represents a major challenge for the industry, given that we will need to qualify new people to operate them. At the moment, the market is undersupplied with rigs and it is an industry challenge. Industry analysts suggest that there will be parity between supply and demand by 2016. As a consequence of this activity, Norway is an expanding market, which we expect to remain strong over the shortterm.
FR: The current undersupply of rigs is driving up day rates. What is the danger that this will become prohibitive for smaller E&P players in Norway? ASBJORN OLSEN: There are several factors to consider. For example, the day rates for standard floating rigs are in the low USD 500 thousands, which is not significantly above global averages. I believe the “high day rates” in Norway is a theme that been over played by the oil industry quite a bit.
Asbjorn Olsen, MANAGING DIRECTOR – TRANSOCEAN
The lifting cost for oil in Norway is not that much higher than in the rest of the world; it is really in the midfield. As for the undersupply of rigs, it is a function of operators’ plans Looking at the current activity, industry analysts are telling us that we are drilling many more wells in Norway now compared to a few years ago. However there are slightly too few development wells and this is potentially where the Norwegian energy industry has a bottleneck - the available well slots. Our tax regime currently favors the drilling of exploration wells.
FR: Why do you think there is a perception among E&P players that there is a looming capacity crisis in Norway? ASBJORN OLSEN: You need to put capacity in the right context. From 2012 to 2016, the industry projects an increase of around 17 rigs on the NCS. That in itself brings many human resources challenges to the table. Norway needs to have sufficient numbers
I believe the “high day rates” in Norway is a theme that been over played by the oil industry quite a bit. The lifting cost for oil in Norway is not that much higher than in the rest of the world; it is really in the midfield.
of trained, talented and certified people to operate these rigs and the current shortage of these people is probably the single most important challenge facing the Norwegian industry. Therefore, as oil companies are contracting for higher numbers of rigs to enter the NCS, both energy companies and rig contractors will need to have a strategy for training new employees and creating leadership roles for them.
FR: How then is Norway viewed within the global portfolio? ASBJORN OLSEN: Norway has historically been an important market for Transocean. Transocean has drilled for more than 40 years on the NCS, and drilled a third of all the offshore wells in Norway. However, it is hard to compare Norway with Transoceanâ€™s other markets because some destinations do not have the same resources. One of our greatest successes in Norway is in building up the local footprint by hiring the vast majority of our workforce within Norway. This has allowed us to be a highly independent region within Transoceanâ€™s operations. This means that there is no great desire within Transocean to bring in workforce from outside Norway to meet the local demand in the market. Norway is a very different market from a competence standpoint and you need a different set of technical skills and also documentation of those skills with proof of competency. This creates some barriers for workers from the UK, for example, to work in Norway. Of course, we can do a gap analysis to convert a UK driller to Norwegian standards but the process still provides a barrier. Today, we have seven rigs operating in the Norwegian market and our goal is to educate the local population to take on the challenges of our business. One of the main steps in growing the local footprint was the acquisition of Aker Drilling last year.
However there are slightly too few development wells and this is potentially where the Norwegian energy industry has a bottleneck - the available well slots. Our tax regime currently favors the drilling of exploration wells. FR: How do you see the significance of this acquisition in growing your Norwegian presence? ASBJORN OLSEN: In terms of numbers, we have gained a larger revenue base and have become a larger part of the Transocean family. We have gained more people as well as newer and more technologically advanced equipment. This has given Transocean a technological edge. The rigs that we have acquired fit within our vision very well, allowing us to serve in a leading position in demanding environments like the Barents Sea. We have spent around a year with the integration of the two companies and we are mostly through with the major integration steps. There is still a little work to be done on the enterprise resource planning side and maintenance management systems side. Norwegian legislation drives this process and the adjustment of management practices is not something that can occur overnight. We have gained, through this acquisition a small-company mentality, which is being integrated within a much larger organization. Small companies are used to short decision lines, fast actions and a dynamic environment. We have tried to assimilate and maintain what was smart and efficient from Aker Drilling for the benefit of Transoceanâ€™s operations. That has been the most interesting aspect of the process for me. n
Company index Add Energy....................................... 24
Bridge Energy................................... 12
North Energy.........................22, 23, 34
Cairn...................................................11 Concedo.......................................10, 23
Norwegian Petroleum Safety Authority ....................................24, 28
COSL................................19, 20, 21, 36 DetNorsk...........................................11 Dolphin Geo................................ 20,22
Norwegian Union of Energy workers............................................... 8
JP Kenny......................................10, 14 KCA deutag.......................................19 Lotos.................................15, 16, 17, 18
Spring Energy............................... 9, 11 Statoil............................................8, 14
Lundin......................................6, 10, 32
Ministry of Petroleum................20, 26
Transcocean...........................18, 19, 38
Norway Oil & Gas report February 2013
Written after exclusive interviews with Norway's decision makers from NOCs and multinational E&P companies, legislators, financial institut...