Aasta Hansteen and Polarled

Preliminary Ripple Effect Study

Aasta Hansteen and Polarled

Authors:

Svenn Are Jenssen Runar Knudsen Sissel Ovesen Jan-Oddvar Sørnes

Illustration: Statoil ASA

Contents

Page

Preface

3

01 Approaching the target

4

02 Background and Purpose of the Study

8

03 Facts about Aasta Hansteen and Polarled

12

04 Methodology

14

05 Facilitating for Ripple Effects

16

06 Delivery of Goods and Services during Aasta Hansteen Development

20

07 Delivery of Goods and Services during Polarled Development

26

08 Location and Investment decisions

32

09 Local and Regional Input

34

10 Expectations for Ripple Effects in the Future – the Operational Phase

36

Cover: Illustration of the Aasta Hansteen-platform.

Source: Statoil ASA

2

Preface Kunnskapsparken Bodø AS, the University of Nordland and Petro Arctic have carried out a preliminary study examining ripple effects generated by the Aasta Hansteen and Polarled development projects, this on behalf of Statoil. The study aims to chart the local, regional and national effects these development projects have on society.

In connection with the PDO (Plan for Development and Operation) approval, the Ministry of Petroleum and Energy required Statoil to carry out an analysis of “regional and local” ripple effects related to the field development project, within two years after production start-up. This preliminary report constitutes the beginning of a ripple effect study that will monitor the development of Aasta H ­ ansteen until two years after the production start. In parallel with the Aasta Hansteen Field Development, a new gas pipeline called Polarled is being build, to facilitate gas transport and the development of new fields in the Norwegian Sea. Polarled is a new 480 kilometer long gas pipeline from Aasta Hansteen to Nyhamna in Møre and Romsdal County. The ripple effects from the Polarled development project are also included in the preliminary report.

At such an early stage, there is an element of uncertainty in the data and figures presented in the preliminary report. Our data was provided directly by the main contractors and suppliers. Therefore the first round of data collection might have failed to identify some businesses, contractors or contracts. Also, the first report offered limited possibilities for any indirect or induced effects, and these effects will receive more attention in the subsequent reports.

We would like to thank all of our informants an respondents, including Statoil, all the suppliers, agencies and all others providing usefull information.

The work on the preliminary study was carried out from December 2014 through March 2015.

Bodø, March 22nd 2015

Svenn Are Jenssen Project manager

3

Photo: Aker Solutions

1. Approaching the target This is the first (preliminary) report from a series of many reports to come. This chapter provides a summary of the most important findings from the first analysis of ripple effects associated with the development phase of the Aasta Hansteen field and Polarled pipeline.

Facilitating ripple effects

major petroleum fields are developed the in coming years,

The Petroleum activity in Norway is about exploiting the

the business and industry in Northern Norway should get

natural resources along the ­Norwegian coastline. The local

the same opportunities to compete for supplier contracts

communities along the coast expect positive effects and

in the region. Statoil will need to act as a facilitator to help

growth for local industries and business, as a results of the

local companies participate in bidding rounds, but local

increased petroleum activity. Investments in local infra-

industry and business will also need to be more proactive

structure will have positive effects on employment growths

and competitive to achieve positive results and profits.

and community development. These expectations are shared by the ­Norwegian government, that implement these

It would be unethical for developers to award contracts solely based on national origin of a company or supplier,

in practice, politically and as policy. Through their work,

but the developers can facilitate contracting processes to

Statoil aims to meet these expectations, set forth in Meld.

make these companies more competitive on commercial

St. 28 (2010–2011) Report to the Storting (white paper). As

terms. Statoil has already initiated programs with the pur-

4

Aasta Hansteen and Polarled

Table 1: National, regional and local deliveries to Aasta Hansteen 2013–2014, and anticipated deliveries for 2015–2017 Norway 2014

North-Norway

2015-17

2014

2015-17

Helgeland 2014

2015-17

Project management

966

1162

97

116

0

0

Engineering

324

186

0

0

0

0

Floater

1 197

2 139

5

78

0

78

Subsea equipment, drilling & wells

1 668

3 100

220

38

215

23

Logistics

0

139

Insurance

30

0

4 185

6 726

322

232

215

101

Total All numbers inn MNOK

a ­Northern ­Norwegian share of deliveries to 454 million kroner, of which deliveries from suppliers in Helgeland will amount to 398 million kroner.

Statoil is close to reaching the goal of 44 percent. Hyundai Heavy Industries and Technip have already generated extensive ripple effects by purchasing process equipment for fabrication from Norwegian suppliers. Statoil will probably also reach its goals for regional and local deliveries.

It is important however to keep in mind that only a few Northern Norwegian companies were involved in deliveries during the development phase. These deliveries are mainly for subsea installations. Activities in Sandnessjøen will increase from 2015, in connection with subsea installations and maritime operations. It also seems drilling and pose of stimulating ripple effects in Northern Norway from

well activities will secure major contracts and ripple effe-

the Aasta Hansteen project:

cts in the Helgeland region.

•

Measures to convince main contractors and suppliers

Statoil is strengthening its existing organization in the

to choose Norwegian subcontractors

region by basing the operational headquarters for Aasta

•

Help make suppliers from Northern Norway more

Hansteen in Harstad. Statoil estimates that the Harstad

competitive and qualified

headquarters will represent about 10 percent of the pro-

•

Prequalifying Northern Norwegian suppliers

ject management cost for Aasta Hansteen. Even greater

•

Supplier seminars

ripple effects will occur in Harstad when operations/pro-

•

Information meetings

duction starts. However, opportunities also exist for the

•

Charting the competition field

supplier industry in Harstad throughout Statoil’s preliminary operational phase.

The secondary data and the interviews we conducted indicate that local business and industry (and local and

Forecasts indicate that Norwegian deliveries for the Aasta Hansteen project in total will amount to 10.9 bil-

regional governments) think their expectations are being

lion kroner throughout the investment period. The Aasta

taken seriously by Statoil and by the main contractors in

Hansteen investment budget operates with Norwegian

the project.

deliveries amounting to 14.05 billion kroner. The forecast for regio­nal deliveries is nearly 556 million kroner for the

The ripple effects from Aasta Hansteen

entire investment phase, in which 316 million kroner are

The original budget for Aasta Hansteen was 32 billion kro-

from Helgeland. The original estimate were 453 and 398

ner ( 2011-kroner). The final goal is to direct 44 percent

million kroner, respectively. Ripple effects from drilling

of the budget to Norwegian suppliers, i.e. approxima-

and well activities are not included in these calculations

tely 14 billion kroner. A goal has also been set to achieve

because this work has not yet begun and the main con-

Preliminary Ripple Effect Study

5

tractors have not selected their subcontractors yet. Drilling

409 million kroner by the end of 2014, of which 95 percent

and well activities will probably generate more ripple effe-

is from Helgeland. So far the estimated local deliveries

cts for Helgeland (to be reviewed in upcoming reports).

amount to 653 million kroner.

Ripple effects from the Polarled pipeline project

Infrastructure development

The original cost budget for Polarled was 11.3 billion kroner

Hansteen field (the third development project off the

( 2011-kroner). The budget has been adjusted to a develop-

coast of Helgeland) has generated much optimism in the

The interviews show that the decision to develop the Aasta

ment cost of 7.5 billion kroner. The policy impact assess-

­Sandnessjøen region. This has had a positive effect on

ment for Polarled anticipated a value creation for Norwe-

plans to invest in local and regional infrastructures. Alt-

gian goods and services during the development phase of

hough this type of political decision is not solely conne-

approximately 3.9 billion kroner ( 2011-kroner), or 35 per-

cted to this project, the report indicates that the project

cent of all investments distributed over four years from

did have a positive influence on such decisions in several

2013 to 2016. Following the significant reduction of the

areas. We can mention these projects as examples:

budget, it stands to reason to reduce value creation figures

•

Constructing harbor facilities at Sandnessjøen

correspondingly, but the report adds that the goal for Nor-

•

Development, construction and upgrades

•

Investments in an aquatic/cultural

to hotels in Brønnøysund and Sandnessjøen

wegian deliveries is still 35 percent. The local ripple effects from the Polarled project that is described in the present

center in Sandnessjøen

report apply to Helgeland, but a considerable share of the supplies will also come from Kristiansund.

We have identified the following deliverables so far:

•

Extending the runway at Sandnessjøen Airport (Stokka)

•

Constructing office facilities in Helgeland

Table 2: National, regional and local deliveries to Polarled 2013–2014,

viable in the small city of Sandnessjøen because a diver-

and anticipated deliveries for 2015–2017 Norway 2014

North-Norway

2015-17

Project management

371

268

Fabrication

613

396

Maritime operations Total

26

696

1 009

1 360

2014

An investment in infrastructure of this magnitude was

2015-17

sity of simultaneous projects stimulated investments: The

Helgeland 2014

2015-17

Norne and Skarv fields new activities are expected from the Aasta Hansteen development project, and other planned developments are on the drawing board. Unfortunately,

409

271

392

260

21 409

292

1 392

261

these investments are not included in the basis of figures for this report.

Setting up branch in Northern Norway For the major operators, the decision to locate offices and

All numbers in MNOK

operational divisions in the north depends on several criThe study shows that the current Norwegian share of

teria. Our data indicate that the Aasta Hansteen field was

Polarled development is 38 percent; i.e. 2.4 billion kro-

a pivotal factor that influenced many companies to set up

ner. Wasco’s decision to set up a factory in Mo i Rana has

branch in the north (such as Aker Solutions and Subsea

generated extensive ripple effects, particularly for Helge-

7) even though the business strategies of both companies

land. Other major national and local effects are related to

already included plans to increase activities in Northern

land-based support for pipe laying. This primarily involves

Norway. This report does not provide any figures on the

base operations, and interim storage of pipes and piping

value of these investments.

material. The Northern Norwegian deliveries amounted to

Table 3: Overall ripple effects from the Aasta Hansteen and Polarled projects for 2013–2014 & anticipated deliveries for 2015–2017 Norway

North-Norway

Helgeland

2014

2015-17

Sum

2014

2015-17

Sum

2014

2015-17

Sum

Aasta Hansteen

4 185

6 726

10 911

322

232

554

215

101

316

Polarled

1 009

1 360

2 369

409

292

701

392

261

653

Total

5 194

8 086

13 280

731

524

1 255

607

362

969

All numbers in MNOK

6

Aasta Hansteen and Polarled

Expectations and ideas for initiatives to increase ripple

•

Encourage the use of geographic proximity as

effects in Northern Norway Most North-Norwegians expect continuing petroleum acti-

a competitive factor in bid assessment •

Continue good intercommunication by initiating more

•

Continue efforts to enhance competence and skills

supplier seminars

vities off the coast of Northern Norway to generate ripple effects in the north. The present study points to a general

locally (by supporting the LUNN project)

perception in the north; that Statoil has a genuine desire to stimulate positive effects for land-based industries and

•

Continue to set requirements to encourage main con-

•

More focus on the use of local employees and less use

tractors to use the regional supplier industry

delivering in the region throughout the Aasta Hansteen project. Our sources and informants have many ideas for how Statoil could generate more ripple effects in the north: •

•

of commuters from other parts of the country

Establish an operational support unit in Sandnessjøen with a purchasing division and knowledge of local and

•

Reduce the use of freight compensations.

The subject most often discussed by local informants

regional suppliers

was that of the current contract system, involving compli-

Provide Northern Norwegian companies with real

cated frame­work agreements. A different and simpler sys-

opportunities to compete on maintenance and modi­

tem of contracts would make it possible for local compa-

fication contracts

nies to compete effectively against companies based

Redesign the current contract structure

outside the region.

Photo: Helgelandsbase

Preliminary Ripple Effect Study

7

Foto: ??

2. Background and Purpose of the Study Meld. St. 28 (2010–2011) Report to the Storting (white paper). An industry for the future – Norway´s petroleum activities, describes a changing Norwegian Continental Shelf. The petroleum industry is steadily moving further north. The coastline of Northern Norway represents the most interesting geographic location for new major discoveries. As major petroleum fields are put into production the coming years, business and industry in Northern Norway should have the opportunity to compete for supplier contracts in the region. Developers need to stay attentive and the supply industry needs to maintain a proactive attitude at a national level while focusing on Northern Norway as a region.

Aasta Hansteen field development

­Norway for which Statoil is the operating company. The

Statoil and its partners have already initiated the develop-

project is valued at more than 32 billion kroner. 2017 is

ment phase of the Aasta Hansteen field, which includes the

scheduled as the year of completion. Statoil, the regional

Polarled pipeline that connects the field with the facilities

and local authorities and the supply industry all have great

at Nyhamna in the Municipality of Aukra. Aasta H ­ ansteen

expectations for the outcome of the project. They expect to

is Statoil›s third major development site in North­ ern

see substantial ripple effects from the development phase

8

Aasta Hansteen and Polarled

Photo: Statoil ASA

in the form of more jobs and professional development of

ment in the Barents Sea, and the first facility for liquified

local workers.

natural gas (LNG) in Norway. Statoil is the operator of the

The Ministry of Petroleum and Energy approved the

facility at Melkøya in Hammerfest, which has an operatio-

Planning, Development and Operations phase (PDO) for

nal budget of approximately 1.4 billion kroner a year. Fifty

the Aasta Hansteen field. This conditional approval re­­

percent of this budget benefits local and regional commu-

quired the submission of a thorough study of regional and

nities. There are about 250 employees living nearby and

local ripple effects on society from the project. This study

just as many full-time supplier jobs associated with the

is only the first (preliminary) report for a subsequent study

Snøhvit development, which has an significantly influence

to measure ripple effects on a national, regional and local

on the city of Hammerfest and the nearby regions. Fol-

scale in Helgeland. The ripple effect analysis will continue

low-up research on the ripple effects generated by Snøhvit

throughout the development phase and for two additional

indicates that the project (which started in 2002) has had

years after the onset of production. The data collection will

positive effects. This can be seen in a rise in population

be performed continuously throughout this period.

figures, growth in employment, more residential construct­ ion, the investments in schools, utilities, infrastructure,

Lessons learned from previous development projects in Northern Norway

a cultural center, as well as an influx of professionals to

Experience from existing fields like Norne, Snøhvit, Skarv

bute to government investments.

and Goliat indicates that development is not only benefi-

Hammerfest and nearby regions. Property taxes contriThe Goliat field is the first oil field to be developed in the

cial to business and industry. It also benefits society as a

Barents Sea. Goliat is one of the biggest industry projects

whole on a local, regional and national scale.

ever carried out in Northern Norway. Goliat (operated by

The development of the Snøhvit field in 2002 marked

ENI) has generated value creation for businesses, indus-

a milestone for the development of the Barents Sea as

try and the city of Hammerfest and nearby regions. ENI

a petroleum province. Snøhvit was the first gas develop-

also decided to locate its regional office in Hammerfest,

Preliminary Ripple Effect Study

9

which brought many jobs to the region. ENI concentrated

area. The positive effects will remain the same even if acti-

its efforts on generating ripple effects for local business

vity levels generally slow down or increase.

and industry. ENI actively upheld its corporate promises for social responsibility by contributing to professional

Statoil is investing in Northern Norway

development among regional businesses and through col-

Statoil opened its first office in Northern Norway about 40

laboration with regional educational institut­ions.

years ago, and the ripple effects from its activities in the

Eighteen years has passed since production started on

north has been - and will continue to be the basis for a via-

the Norne field (located just off the coast of Sandnessjøen),

ble future in this region. Statoil is aware of the major impor-

which is operated by Statoil. Development of the Norne

tance of Aasta Hansteen to the local communities in Helge-

field helped lay the foundation for the major petroleum

land and for the region as a whole, and the positive impacts

investments in Helgeland, and raised expectations in the

on Norwegian supplier industry. During planning and

region that the petroleum industry would bring opportuni-

development of projects, no effort was spared to inform

ties to local suppliers.

major international contractors of their responsibility to

Development of the Skarv field (operated by BP Norge)

offer Norwegian and Northern Norwegian businesses and

expanded the petroleum industry’s foothold in the north,

suppliers with an opportunity to compete in the bidding

which also had a positive effect in Helgeland. Not all

process. As part of this, they emphasized public relations

ripple effects are easy to measure and not all are visible

and disseminating information to the supplier industry, in

and countable; there is no doubt today that the petro-

order to help local businesses become proactive in this

leum industry has had a positive influence in Helgeland.

process. We will describe this in detail in the chapter that

Among the most visible effects from petroleum projects in

discusses measures specifically for Northern Norway.

­Sandnessjøen is the impressive harbor zone near the base.

The decisions to locate Statoil’s Aasta Hansteen operat­

The runway at Sandnessjøen Airport (Stokka) was exten-

ional headquarters in Harstad and to locate the develop-

ded, and new hotels and a new cultural center were built

ment and supply base at Sandnessjøen and the helicop-

in the area. These effects are also visible in Brønnøysund,

ter base at Brønnøysund was carefully considered. Many

where the airport has become one of the busiest of it's size

years of planning, construction and investment were requ-

in the nation and hotel capacity has increased noticeably.

ired to prepare these areas for the tasks they would be

Of course, development activities also generate more acti-

facing. This included investments in building infrastructure,

vity for local businesses. The greatest ripple effects can be

capacities and professional environments, which had to be

seen in and around the heliport.

developed and staffed at various levels. Establishing Har-

Helgeland in 2014

ons in Northern Norway must be seen in the context of the

The recent years can be characterized by optimism and

expected significance of this region in petroleum activities

great commitment, both from local authorities and local

for many years to come.

stad as the new center of operations for Statoil›s operati-

industry and businesses. However, the dramatic fall in oil prices, and the reorganization processes initiated by many of the biggest companies, have weakened the optimism

Challenges and opportunities for the Northern Norwegian supplier industry

of local operators to some degree. This was coincided

Developing a robust supplier industry in Northern ­Norway

with the completion phase of the Skarv development pro-

is demanding. Nordland is among the four largest indus-

ject, which also resulted in reduced activity in the region.

trial counties in Norway, comprising locally available

Because of this trend, the Aasta Hansteen and Polarled

expertise, as well as infrastructures that are suitable for

projects are even more important for Helgeland today, and

petroleum industry activities. The challenge faced by Nort-

in the years to come. The Aasta Hansteen field also solidi-

hern Norwegian suppliers is that the petroleum industry

fies Helgeland’s position as a base of operations and a vital

constitutes an entrenched industry, getting inside is diffi­

supply zone. An increase of activities in Brønnøysund and

cult because of heavy competition from national and inter­

Sandnessjøen to support petroleum activities off the coast

national operators. Many suppliers from Western Norway

of Nordland, will reinforce the market potential of local

have a 40-year ahead start in the industry which make it

businesses when the field becomes operational in 2017.

difficult to catch up and gain a winning edge. Norway took

The changes observed these past six months in the

decades to build up a supplier industry that is at the glo-

frame­work conditions within the petroleum industry itself,

bal forefront in many fields and in certain technologies.

have formed an important backdrop for the current study.

­With­­in many areas of technology there are few companies

This means that some of the ripple effects might not be

in Northern Norway with the know-how or infrastructure to

measured in form of increased employment or activity in the

compete on the biggest contracts. Despite of this, several

10

Aasta Hansteen and Polarled

suppliers in the north have gained a foothold both locally

The purpose of the ripple effect study

and for international deliveries.

The purpose of this ripple effect study is to chart local,

Geographic proximity is an important advantage

regional and national ripple effects from the Aasta Han-

Northern Norwegian suppliers have compared to their ­

steen field and Polarled pipeline development projects. The

competitors. Prox­ imity to new fields provides real cost

results are measured against the intentional goals set for

savings for operators that want to offer standard shipyard

these projects. The ripple effect studies aims to determine

services. These conditions (along with reduced risk related

the value of deliveries for goods and services. Subsequent

to time) can help lay the foundation for future development

reports will focus on direct, indirect and induced effects.

in local industry. The challenge is to get a foot inside an entrenched and competitive market.

According to Aasta Hansteen’s PDO, about 44 percent of all investments are Norwegian deliveries of products and services. The regional share should reach about 3.2

Competence and skill enhancement

percent (453 million kroner), of which most of the deli-

Companies in Northern Norway need help to build the pro-

veries come from the Helgeland region. Statoil's contract

fessional base that engineers, skilled employees and infra-

strategy for the region lay out the importance of ensuring

structure can stand on to compete on the biggest petroleum

ripple effects for Northern Norwegian companies. The

contracts. Statoil’s LUNN program is a part of this work

start of production is scheduled to Q3 of 2017. The final

(Leverandørutvikling Nord Norge = Supplier Development

report for the first 2 years of production will also discuss

Northern Norway). Read more about LUNN on page 17.

ripple effects.

Quotes from Meld. St. 28 (2010–2011) Report to the Storting (white paper) An industry for the future – Norway´s petroleum activities: Early contact between the operator and local/regional industry and relevant authorities is important so that the industry receives good information about the business opportunities the new activity in areas will entail. Relevant societal factors must be studied in connection with development plans, including regional and local spin-off effects from the development. It is important that these elements receive early focus from the developer in order to achieve good solutions.

When a field is being developed, and as operations start, it is important that involvement of competent industry in the region is facilitated. It is important, for instance, to facilitate qualification of relevant local/ regional suppliers, and that tender processes are established that enable participation from companies in the province. It is also important to ensure an efficient base and operation structure, which contributes to local and regional industry and expertise development.

Photo: Hyundai Heavy Industries

Preliminary Ripple Effect Study

11

3. Facts about Aasta Hansteen and Polarled For the first time in history, Norway’s petroleum industry develops a field where no infrastructure exists in waters with high waves, strong currents and seabed temperatures of -1.5 °C at a depth of 1200-1300 meters. Polarled is transport artery from Aasta Hansteen to Nyhamna in Møre and Romsdal.

Pipes from other fields will connect to Polarled in the future. Polarled is thus an important investment for the Aasta Hansteen field, and for other developments planned for the Norwegian Sea and nearby areas.

Facts about Aasta Hansteen development The Aasta Hansteen field represents one of the most exci-

•

Resources: Estimated recoverable volume is 47 billion standard cubic metres of gas and some condensate.

ting development projects on the Norwegian Continental Shelf. Great depths, demanding weather and climatic conditions, and a lack of existing infrastructure will requ-

The field, earlier called LUVA, changed its name to Aasta Hansteen on International Women's Day (8 March 2012).

ire advanced technology and skilled suppliers. The field

PDO was approved in Q2 2013. The operational headqu-

is located 300 km off the coast to the northwest of Sand-

arters for Aasta Hansteen was placed in Harstad, the

nessjøen; the nearest installation is 140 km away (Norne).

supply base at Sandnessjøen and the helicopter base at

Waters in the area are very deep and weather in this part of

Brønnøysund.

the world is extreme.

The planned field development includes a SPAR platform - the first on the NCS. Hyundai Heavy Industries and Technip build the platform in Korea. A SPAR platform is a mobile offshore installation consisting of a vertical column

Who was Aasta Hansteen?

that is moored to the seabed. The installation features conventional topsides with processing facilities.

Risers transport gas from the seabed to the platform

Aasta Hansteen, (1824 – 1908), was

and further onto a pipeline (Polarled). The hull will be fitted

a

with storage tanks for condensate.

early feminist. She was a pioneer

•

Aasta Hansteen field discovered in 1997

•

Production licenses 218 and 218B include blocks

•

Licensees: Statoil (operator) 51 %, Wintershall Norge

Norwegian

painter,

writer,

and

in the fight for women's rights in Norway.

6607/1, 6706/12, 6707/10 and 6707/12 AS 24 %, OMV AS (Norway) 15 %, ConocoPhillips ­Scandinavia AS 10%

12

Aasta Hansteen and Polarled

Facts about Polarled

in the form of stable product quality, market flexibility and

Polarled is a new 481 km long gas pipeline, 36 inches

better regularity of export.

Like most other gas transport pipelines on the Norwe-

in diameter, starting at the Aasta Hansteen field, 1,300 meters below sea level, 300 kilometers west of the city of

gian Continental Shelf, Polarled will be operated by Gassco

Bodø, ending at Nyhamna processing plant in Western

in the operating phase.

Norway. The pipeline facilitates the Aasta Hansteen field

Polarled involves considerable project investments amo-

and other fields in the Norwegian Sea, constituting an

unting to nearly 7.5 billion kroner during the construct­ion

important part of industrial developments in these waters.

phase, and the preliminary analyses estimate annual ope-

The pipeline will have several connection points providing

rating costs in the order of 23 million kroner ( 2011-kroner).

easy connection to other fields: Linnorm over Draugen,

Polarled is expected to generate major contracts for

Zidane and other future fields in this area.

Norwegian goods and services suppliers and bolster

One important goal of Polarled is to create flexibility and

employment in Norwegian society. Although some years

ease of interfacing with existing gas transport solutions

of the development work remain, preliminary figures from

from the Norwegian Sea. The pipeline will bring gas to ons-

the development phase indicate that Polarled already in

hore facilities at Nyhamna and connect with the Langeled

its first phase has generated important ripple effects in

pipeline. The policy impact assessment for Polarled poin-

­Norway and especially in Helgeland.

ted out that the gas pipeline would also provide benefits

Harstad

Asterix

Bodø

Aasta Hansteen ~1300 m

~400 m

Double Tee

Arctic circle 66 .5

° Mo i Rana

36”

Sandnessjøen Victoria

Zidane

Tee

Heidrun

Fogelberg

Brønnøysund

Kristin

Linnorm

Draugen

Namsos

36”

Trondheim Kristiansund Nyhamna

Preliminary Ripple Effect Study

Illustration: Statoil ASA

Molde

13

Photo: Aker Solutions

4. Methodology The ripple effect study measures the value of goods and services in the development project of Aasta Hansteen and Polarled, in relation to the project objectives. The ripple effects in this study are categorized as national, regional or local. National ripple effects apply to all of Norway, for contracts awarded to companies that have business addresses in Norway. The regional ripple effects from Aasta Hansteen are those that affect the counties of Nordland, Troms and Finnmark. Local effects are values generated in Helgeland and Harstad.

Preliminary report

entered into between Statoil›s main contractors and

This is the first in a series of four reports that will document

subcontractors.

ripple effects of Aasta Hansteen and Polarled. The study

The indirect effects of Aasta Hansteen development

will continue until the field has been in operation for two

occur because of the demands brought about by direct

years. This means that the latest report will be completed

effects. This includes jobs and other benefits from subcon-

at the beginning of 2020.

tractor contracts in the project. Induced ripple effects from Aasta Hansteen are connected to the development con-

Differences between direct, indirect and induced effects

consumption within the society, thus leading to increased

Direct ripple effects are those related directly to opera-

(direct and indirect) income and revenues.

tions or associated with contracts during the Aasta Han-

tributing to increased production, more employment and

Such effects can be measured in terms of investment,

steen development phase and the Polarled construction

value creation or employment within specific geographical

process. These effects may be a direct result of contracts

areas.

between Statoil and supplier companies, or contracts

14

Aasta Hansteen and Polarled

The concept of value creation

A total of 32 interviews were conducted. Interview guide-

Value creation is a term often used in economic analyses

lines were adapted to specific informant groups. Detailed

and ripple effect studies. In this study, we decided to mea-

notes were kept on all interviews. Questionnaires were also

sure ripple effects using the same model used to calculate

sent to 270 Norwegian supplier companies. We also sent

anticipated effects. The anticipated effects were laid out in

out a simple questionnaire to the foreign suppliers. 114

a previous Statoil report that measured the socio-econo-

questionnaires were filled in and returned to us.

mic consequences of Aasta Hansteen.1 The report defined Norwegian value creation in terms of goods and services

Challenges while collecting data

from contracts signed with Norwegian businesses. Value

The client for this study provided a list of contracts signed

creation is the value of contracts minus the value of deli-

with main contractors and suppliers in Norway and abroad.

veries and subcontracted that come from abroad. Inver-

Some supplier categories also included a list of subcon-

sely, contracts in the hands of foreign companies generate

tractors. These lists include only the name of the suppli-

Norwegian values when the subcontracts goes to Norwe-

ers and limited contract information. That means we were

gian companies. A similar analysis can be made on regio-

dependent on the willingness of the main contractors and

nal and local levels. The values generated at this level are

their subcontractors to provide information. This repre-

not analyzed according to the value of the main contracts,

sents some uncertainty to the data presented for Norwe-

because value creation is generated in terms of employ-

gian deliveries or deliveries from local suppliers from Nort-

ment and effects that influence business and industry on

hern Norway and from Helgeland.

national, regional and local levels.

Confidentiality

The ambitions of the first preliminary report

fidentiality by all the suppliers in the project, even in rela-

The final report will chart and highlight the cumulative

tion to the scope of the contracts. The exception to this rule

Contractual data was provided on the promise of full con-

effects generated by Aasta Hansteen measured in value

of course is for contracts and partial deliveries that have

creation and employment. In this preliminary report, we

already been discussed in the media. All the information

were concerned with charting the status of contracts sig-

we received while collecting data was processed exclu-

ned between Statoil and the main contractors on the one

sively for conducting a ripple effect analysis. There is no

hand and contracts between the main contractors and

company-specific information in the report, except cases

subcontractors on the other hand. Thus, this preliminary

that were approved by the informant in advance. All the

report has a limited and incomplete scope of the ripple

informants signed a consent form for processing and using

effects related to value creation and employment.

the information they provided during the interviews.

Sources of information and data collection

prices, converted from relevant currencies to Norwegian

We used several sources of information for this study:

kroner (2014 kroner).

The presented figures are based upon the 2014 values/

1) Available secondary data from Statoil; budgets and

Continuation of the ripple effect study

contractual information, presentations and reports

As mentioned in the introduction, the ripple effects from

2) Interviews with Statoil employees involved in the Aasta

Aasta Hansteen and Polarled will be recorded for five years

Hansteen and Polarled projects

and include several sub-reports and a final report.

3) Interviews with representatives of main contractors/ suppliers for both projects 4) Interviews with the representatives of Northern Norwegian subcontractors, the county municipalities of Troms and Nordland, and the municipalities of Alstahaug, Brønnøy, Harstad, and other operators within society and the communities 5) Questionnaires sent to supply companies (Norwegian and foreign) 6) Statistics from Statistics Norway (SSB), ripple effect studies done on other petroleum fields and miscellaneous secondary information.

Preliminary Ripple Effect Study

1 Utbygging og drift av Aasta Hansteen, Samfunnsmessige konsekvenser (Agenda Kaupang 2012)

15

Photo: Kunnskapsparken Bodø AS

5. Facilitating for Ripple Effects Statoil’s ambition is to produce as many ripple effects as possible, both in the development- and operations phase of the projects. This chapter provides an overview of some of Statoil’s most important measures for ensuring positive effects.

16

Aasta Hansteen and Polarled

Measures intended to influence main suppliers to choose Norwegian contractors

share/percentage of national, regional and local suppliers one should expect to use in the project

Initially, no legal requirements existed to force suppliers or for development projects in the petroleum sector. EU legis-

Measures implemented by Statoil to help Norwegian suppliers and subcontractors

lation applies to public announcement and contract design

Generally Statoil has a policy of trying to help the Norwe-

contractors to enter contracts with Norwegian companies

for these types of projects. This legislation put restraints

gian supplier industry grow. Statoil has also initiated seve-

on Statoil›s power to grant contracts to suppliers who were

ral programs directed at the Northern Norwegian supplier

not commercially competitive, and the same limitations

industry. In 2008 the LUNN program was initiated (Supplier

apply when demanding that main contractors or suppliers

Development Northern Norway), with Innovation Norway

use national, regional or local suppliers. This implies that

and Statoil as partners. Aasta Hansteen is only one among

commercial criteria form the basis for how Statoil or the

several projects targeted by LUNN; and it must be seen

main contractors awarded contracts for development pro-

in the context of Statoil activity in Northern Norway over

jects. However, the Norwegian authorities and Statoil sta-

time. LUNN is one of several action programs initiated by

ted their expectations clearly; arrangements should facili-

Statoil to stimulate industrial development and growth in

tate involvement of Norwegian industry in these contracts.

Northern Norway. Statoil runs the program and has repre-

This included giving local businesses in Northern Norway

sentatives in the steering committee, alongside repre-

and Helgeland the opportunity to qualify and participate in

sentatives from Innovation Norway. Kunnskapsparken

bidding competitions. Goals were also set to determine the

Nord in Harstad has the role of project coordinator. Other

Preliminary Ripple Effect Study

17

LUNN supporters are the Research Council of Norway,

were surveyed during the study. The feasibility study pro-

Petro Arctic and LoVe Petro. The program’s main objective

vided the main suppliers with an overview of companies

is to help the Northern Norway supplier industry become

in Northern Norway at an early stage in bidding processes

more competitive, with its geographical center of gravity

that could provide supplies, services and expertise during

in the north (management, HR, resources, assets, employ-

development. After completing the feasibility study, Petro

ment and financing). LUNN also aims to create a regional

Arctic got the contract to coordinate supply seminars in the

strategic alliance, provide the basis for more employment,

region and act as point-of-contact to communicate with

create a solid foundation for ripple effects and help with

the supply industry in Northern Norway.

knowledge transfer between the involved parties. Statoil project for another two years. Approximately 118 compa-

Supply seminars in Oslo and the selection of main contractors

nies from Northern Norway have participated in the LUNN

At an early stage in the project (and before Statoil publis-

and Innovation Norway have decided to prolong the LUNN

program since its inception in 2008. Statoil is also working

hed a tender for the project) all potential main contractors

with several special interest organizations dedicated to

from Norway and abroad were invited to a seminar in Oslo.

help suppliers develop. One example is Petro Arctic, a spe-

The seminar was an informat­ion-sharing meeting for the

cial interest organization for suppliers that want to position

three development projects: Aasta Hansteen, Gina Krogh

themselves to win contracts during the development and

and Mariner. Statoil informed potential participants about

operational phases on petroleum projects in the Norwe-

their expectations for ripple effects in Northern Norway

gian Sea, the North Sea and the Barents Sea. Petro Arctic’s

(and for Norwegian industry in general) during the Aasta

operations are financed by its members, its main collabo-

Hansteen development phase. Statoil informed everyone

rators (Statoil ASA and ENI Norge AS), and other oil compa-

that they could not force their contractors to use Norwe-

nies investing in the north.

gian subcontractors, but they still expected them to facilitate the process by help­ing N ­ orwegian companies and

Statoil’s Industry coordinator in the north

local business and industry in the north become more

Statoil has several employees in Harstad working clo-

competitive, which would lead to specific contracts. The

sely with the community. The industry coordinator for

goal was to get the main contractors/suppliers to commit

the region is responsible for following up on the supplier

to the use of N ­ orwegian subcontractors. The bidding docu-

industry in this regard. The industry coordinator is an

ments included a paragraph that describes Statoil’s expec­

informal communication partner and advisor for compa-

tations; that N ­ orwegian (and especially Northern Norwe-

nies in Northern Norway. The industry coordinator has a

gian) subcontractors should be given the opportunity to

hand in every Statoil project in Northern Norway. Creating

participate in pre qualification. If prequalified, they should

professional development programs and setting up colla-

also have the opportunity to submit a bid. Statoil encoura-

borations with the supplier industry in Northern Norway

ged EPC supp­liers to survey potential Northern Norwegian

are just some of the industry coordinator’s responsibili-

suppliers with­­in areas that applied to their contracts.

ties. Another important task is to spread knowledge about the N ­ orthern ­Norwegian supply industry throughout the

Information seminar at Gardermoen

­Statoil organization.

After the major subsea EPC contracts were in place, S ­ tatoil

Feasibility studies

dermoen. The seminar was arranged with Gina Krogh and

Statoil carried out a feasibility study in Northern Norway

Mariner fields. Invitations were sent to main contractors,

before Aasta Hansteen got off the ground. Petro Arctic

Norwegian industry in general and to the supplier indus-

invited stakeholders to an information seminar at Gar-

was responsible, and the purpose was to identify all the

try in Northern Norway. The EPC suppliers outlined their

potential suppliers available in Northern Norway. Crea-

assignments and informed of their demands related to

ting windows of opportunity for the supplier industry and

subcontractors. Moreover, the subcontractors got the

initiating measures to stimulate ripple effects in Northern

opportunity to participate in speed-dating sessions with

Norway is the most important areas explored in the feasi-

subsea EPC suppliers to facilitate communication.

bility study. The feasibility study was an important tool in defining the goals for local and regional possibilities. Ano-

Information meetings in Northern Norway

ther objective of the study was to define actions that could

In addition to the national seminar, Statoil participated in

facilitate pre qualification by local companies to parti-

three local seminars in Northern Norway together with

cipate more in bidding competitions. The capacities and

Petro Arctic (the organizer of these seminars). The first

expertise of approximately 120 north Norwegian suppliers

supplier seminar in Northern Norway was in Bodø June 15th

18

Aasta Hansteen and Polarled

2012. More than 150 people were present at the event. This

ment from Statoil at the seminars. The general impres-

seminar was conducted before the awarding of main con-

sion among the informants was that the supplier industry

tracts, but with all the potential main suppliers for the

in Northern Norway thought most of the main contractors

platform topsides, hulls, subsea installations and mari-

had taken Statoil›s expectations seriously, and that efforts

time operations represented. Participants included repre-

were made to help local businesses participate in the bid-

sentatives from approximately 60 small and medium-si-

ding competitions.

zed supplier companies from Northern Norway. They were informed about the Aasta Hansteen project and the different projects phases. They also got information on how to

Evaluating new opportunities as the development projects progressed

enter bidding processes, and how to establish alliances to

Statoil, the main contractors and local operators were

build competitive environments for future contracts.

committed to exploring opportunities for ways to use local suppliers during the development phase. Statoil put a sig-

General impressions, suppliers and regional authorities

nificant amount of effort into looking for a location near

The participants of these seminars were very satisfied with

mating the SPAR and Topside. A considerable interest in

Sandnessjøen that could be suitable for constructing/

the information they received and the opportunity given to

this project was created around the region and some ope-

participate in the B2B meetings. Many felt that more time

rators strenuously worked to keep this part of the project

should have been set aside for these meetings, but the

in Helgeland. This option was ruled out because it was too

feedback was generally quite good. Several participants

expensive in commercial terms, compared to other options,

were particularly positive about the in- depth commit-

and some of the risks involved were simply too high.

Preliminary Ripple Effect Study

19

6. Delivery of goods and services during Aasta Hansteen Development The investment phase of the Aasta Hansteen development project consists of several major contracts, of which engineering and construction of the deck and living quarters, the hull and the subsea installations are the largest. Services within engineering, construction, transport and logistics during development are major activities in this phase. This preliminaryreport presents the first evaluation. However, much work remains before the investment phase is completed. It will take some years before we get a more comprehensive assessment of whether the objectives for ripple effects were reached or not. The next section describes the most important activities, costs so far in the development stage and provides a preliminary assessment of the results obtained, compared with the specific objectives.

Ripple effects of project management and engineering

unt to 2.6 billion kroner; 98 percent of the value creation

Developing a field as complex as Aasta Hansteen requ-

from this will remain in Norway. The project is led by Sta-

ires many years of planning, research and engineering

toil’s Stjørdal office (Trondheim). In 2012, the decision to

world. The budgeted costs for project management amo-

before the development actually can start. Statoil and

locate Statoil's operational headquarters in Harstad was

other N ­ orwegian experts within technology are world lea-

made. Several employees at the Harstad office are assig-

ders in key areas of technology needed for engineering Project management

design and completion of Aasta Hansteen. The scope and complex­ity of investments needed to get Aasta Hansteen moving, requires extensive use of resources throughout

Local

the development phase. Twenty percent of the costs in the development phase are related to project-­ management

Regional

and engineering.

Project management Statoil has put together a dedicated in-house team to manage this project throughout the development phase.

The team will follow up on contracts with some of the key

Norwegian

Foreign

500

0

1000

1500

2000

2500

suppliers from Norway and with personnel stationed at the offices of main contractors and suppliers around the

20

Total

2015-2017

-2014

Aasta Hansteen and Polarled

Photo: Aker Solutions Sandnessjøen

ned specific tasks on the Aasta Hansteen project during

estimate for Norwegian involvement for the entire period

the development phase. The office in Harstad represents

was about 14 percent.

about 10 percent of project management costs; i.e. approx­

There was no expectation for local or regional participa-

imately 96 million kroner from project startup until 2014.

tion in the project management work and we have neither

The Harstad office will also provide resources throughout

been able to find any reference to such expectations while

the rest of the development phase, estimated at approxi-

doing research for this report.

mately 116 million kroner.

Engineering

Project planning, enineering and studies The investment budget for planning and engineering

Local

is 4.3 billion kroner, of which 45 percent is delivered by ­Norwegian suppliers. The main planning and engineering

Regional

costs represent payments to the main contractors who are responsible for the platform and hull, subsea equipment

Norway

and umbilical. By the end of 2014, Statoil had already contracted 3.6 billion kroner of this work. About 80 percent of the engineering work is completed. Thirteen percent of the engineering work was delivered by Norwegian suppliers,

Foreign

0

500

1000

1500

2000

2500

3000

3500

which are significantly less than originally estimated. Our Total

Preliminary Ripple Effect Study

2015-2017

-2014

21

Ripple effects related to building the floater

end of 2014, while the remaining deliveries will exceed 1

It's 18 years since the first barrels of oil were produced at

billion kroner in 2015 and 2016. The clients are mainly HHI

tracts are for deliveries worth 1.1 billion kroner until the

the Norne field in Nordland. Back then, only a few local

and Technip, but their major international suppliers are

companies were qualified to work within the petroleum

also using Norwegian subcontractors. CB&I and Hertel are

sector, or able to position their companies in this market.

two such examples. The investment budget includes deli-

Today, the businesses and industry in Northern N ­ orway are

veries by Norwegian companies estimated at 20 percent,

now more prepared for this type of work, and expectati-

while real signed agreements now make up 31 percent of

ons are high as one of the world's biggest SPAR platforms

contract costs for construction and process equipment.

is installed in Nordland. The ripple effect analysis found

Accor­ding to the main contractors, the bulk of all contracts

Norwegian supplier agreements on deliveries worth more

with subcontractors was signed last year. It is unlikely that

than 2.1 billion kroner so far that involves platform and hull

this figure will increase much in the coming period.

work. Apart from a few big Norwegian deliveries, almost no

Technip and HHI chose Kværner Stord as the contractor

deliveries were assigned to Northern Norwegian compa-

to mate the platform and hull. Onshore work will finish at

nies for this part of the development project.

the beginning of 2016 in Digernessundet near the Kværner shipyard in Stord. The remaining work will be finished on

The SPAR platform

the field. The platform will be ready for towing in the sum-

The SPAR platform consists of the platform’s topside with

mer of 2016.

living quarters and the hull that has a storage capacity for condensate. Hyundai Heavy Industries (HHI) in Korea is

Purchasing bulk materials

building the platform deck, while the hull will be delivered

Most purchases of bulk materials (pipes, flanges etc.) are

by Technip and HHI together. Technip's center of operations

done abroad. Norwegian value creation is minimal. The

is located in Houston (responsible for project management

investment budget estimates a bulk material cost of 3.1

and engineering) and HHI is taking respons­ibility for con-

billion kroner, of which the Norwegian share makes up 15

structing the hull. Technip's Norwegian office is located in

percent, with a 5 percent regional share. The Norwegian

Sandvika and is responsible for maritime operations prior

share is primarily bulk deliveries during the installation

to installing the deck here in the summer of 2016.

phase. Then there is a need for fuel to put the floater together in Norway and for installation on the field. By the end of

SPAR-Platform

2014, the total cost for this amounted to 1.6 billion kroner.

So far no Norwegian suppliers are involved in this part of the project.

Local

Mating and completion

Regional

Final construction and project completion are the last phase of development. The investment budget estimates a

Norway

cost of 262 million kroner for this, with 210 million kroner (80 percent) intended for Norwegian deliveries and 42 mill­

Foreign

ion kroner (20 percent) for regional deliveries. This cost is 0

1000

2000

3000

4000

5000

6000

7000

8000

9000

much larger than originally estimated. By the end of 2014, the signed contracts amounted to 1.6 billion kroner. Of this

Total

2015-2017

-2014

figure, the Norwegian deliveries amounted to 78 million kroner in 2014, but thus far none have been awarded to

Fabrication and the procurement of process equipment

suppliers from Northern Norway.

The biggest fabrication costs are steel and workforce,

Work on this part of the project has not begun yet, so

which do not bring much value creation to Norwegian

the scale and share of Norwegian and regional deliveries

companies. Several Norwegian suppliers were awarded

will surely change in the future.

hull delivery contracts for pumps, motors and similar devices. The biggest deliveries for Norwegian subcon-

Maritime operations

tractors are for different kinds of process equipment.

The investment budget operates with a cost estimate of

­Norwegian companies have signed agreements on fabri-

1 billion kroner for maritime operations. The Norwegian

cation and process equipment for the platform and the

share of this amount to 80 percent, with a regional/local

hull worth more than 2.1 billion kroner. The existing con-

share of 10 percent associated with supply base activi-

22

Aasta Hansteen and Polarled

ties. Maritime operations will commence in 2015, so no

Subsea installation, drilling & wells

ripple effects have been registered for the current period.

Subsea 7 has signed a contract with Statoil to run these operations. The Helgeland coast will get most of this acti-

Local

vity starting in March 2015 and onwards when Subsea 7 vessels are in place. These will generate substantial local

Regional

revenue, especially in Sandnessjøen and Mo i Rana. According to Subsea 7, the most common services needed for

Norway

this assignment will be welding, inspections, accommodations, logistics, electricians and security guards - to name

Foreign

a few.

0

Ripple effects from subsea installations, drilling and wells

1000

2000

Total

3000

2015-2017

4000

5000

-2014

Norwegian companies have signed agreements worth 4.7 billion kroner for subsea installations and drilling & wells.

delivery; UK (Aberdeen and London), USA (Houston), India

Statoil's goal for Northern Norwegian deliveries was 191

and Malaysia (Kuala Lumpur).

million kroner for the entire development phase for this category. Northern Norwegian companies provided deli-

EMAS is responsible for obtaining and installing the well frames that Aker Solutions constructed.

veries on subsea equipment valued at 220 million kroner in

Installation work will take one month in the spring of

2013 and 2014. This number will rise throughout the rest of

2015. EMAS will mainly be using the base services in Sand-

the development phase.

nessjøen, in addition to purchasing some equipment from Momek.

Subsea equipment

Deep Ocean was responsible for purchasing, installing

The investment budget lists costs of 2.656 billion kroner

and laying the 140 km long fiber optic cable. This work was

for procurements and installation of subsea equipment

finished in 2014, without the use of Norwegian subcon-

such as subsea bottom frames, cables and other essential

tractors. Deep Ocean used German subcontractor for the

equipment. Norway has the competence and ability to pro-

cable equipment. Subsea 7 has a contract with Statoil to

duce and supply such equipment from several locations in

take charge of flow-lines and maritime operations, as well

­the country, even in Northern Norway. Import associated

as towing and mooring the mobile offshore production

with production of subsea equipment mostly involves steel,

platform on the field. This contract includes large pro-

pipes and some other equipment. Estimates made during

curements from suppliers in Norway and abroad. Although

the planning phase envisioned 75 percent of contracts on

Subsea 7 buys most equipment from abroad, Norwegian

these deliveries going to Norwegian business and indus-

companies will provide most of the services. The ripple

try, with a regional/local delivery of 3 percent. Until the

effects in Northern Norway from the Subsea 7 contract are

end of 2014, Statoil had signed agreements for deliveries

extensive. We would especially like to mention the assign-

on subsea equipment worth nearly 3.3 billion kroner. The

ments Subsea 7 awarded to Aker Solutions in Sandnes-

costs incurred in this period amounted to approximately

sjøen for the delivery of spools and spreaders. These are

2.2 billion kroner. Norwegian deliveries on signed contracts

large structures about 50 to 70 meters long. Momek was

amounted to a little more than 70 percent, of which local

chosen as the subcontractor to manufacture 25 suction

deliveries from Helgeland amounted to about 15 percent.

anchors; a few months after Subsea 7 signed the con-

Among local suppliers, we can mention Momek and Aker

tract with Statoil. Production of these massive anchors is

Solutions Sandnessjøen, with the biggest contracts for

underway at Momek’s workshop at the Mo Industrial Park.

subsea equipment.

The contract employs about 20 people for an entire year.

Aker Subsea will provide the subsea production facili-

Subsea 7 was planning to set up shop in Northern Norway

ties for Aasta Hansteen. The contract includes the delivery

as part of its business strategy, and the Aasta Hansteen

of template manifolds, umbilical risers, coupling equip-

agreement was the triggering factor that facilitated their

ment, the work-over system for the drilling rig and other

plan. Approximately 13 employees at the Subsea 7 office in

things like “Christmas trees”, tools, wellheads and control

Tromsø are responsible for many of the company's activi­

systems. Several subcontractors from Norway and abroad

ties in Northern Norway. Subsea 7 is working actively to

are involved in this part of the project. Aker Solutions has

familiarize itself with the Northern Norwegian supplier

several departments in other countries participating in this

industry and it is trying hard to become a vital part of the

Preliminary Ripple Effect Study

23

community, which also generates ripple effects for local

Drilling and wells

business and industry.

Drilling and completion of the production wells will be done from a semi-submersible drilling rig specialized for this type of work. According to the cost budget, of the 4.021

Umbilicals The investment budget includes a cost item for umbilicals

billion kroner for this work, 65 percent will probably go to

amounting to 819 million kroner. The Norwegian share

Norwegian companies, with a regional/local share of 5 per-

is estimated at 30 percent, because that many foreign

cent. Most of the regional/local share is services from the supply base and the helicopter base. By the end of 2014,

components are used in production.

Signed agreements and incurred costs for umbilicals by

agreements had been signed worth 4.3 billion kroner, while

the end of 2014 had exceeded 429 million kroner. Northern

incurred costs only amounted to a few million. Drilling and

Norwegian suppliers are not included in this delivery, but

well work will start in 2016.

236 million does represent contracts signed with Norwegian suppliers. Aker Subsea and Deep Ocean are delivering

Other deliveries

the umbilicals.

Logistics Installation and completion of the floater will require logis-

Infield flowlines

tics services as goods and services from the supply base

Infield pipelines that run between subsea installations and

and helicopter transport. The investment budget estima-

the floater are imported. The investment budget estimates

tes logistics and distribution costs amounting to 85 million

these will cost 1.516 billion kroner, of which the Norwegian

kroner. This entire amount is in the hands of Norwegian

share initially thought to be 40 percent. There is no regional

suppliers, with a local share of 70 percent. Presently there

or local share for this item. The Norwegian share is asso-

are no significant ripple effects from logistics. The biggest

ciated with installation work. By the end of 2014, incur-

local ripple effects will be seen in 2015.

red costs amounted 107 million kroner, which includes a 13-percent share for Norwegian deliveries.

Insurance The investment budget has estimated insurance costs at 590 million kroner during the development phase. Updated budgets forecast insurance costs of approximately 302 million kroner.

Inv. budget

Committed Dec 2014

Budget Norwegian share %

Commited Norwegian deliveries

Beløp

%

Beløp

Project management

2 691

2 128

98 %

2 637

100 %

2 128

Engineering

4 321

3 562

45 %

1 944

14%

510

10 927

6 903

20 %

2 185

31 %

2 160

Bulk materials

3 104

1 917

15 %

468

0%

0

Maritime operations

1030

1099

80%

824

100 %

1099

262

1 607

80 %

210

5%

78

15 323

11 526

2 656

3 300

75 %

1 992

70 %

2 320

819

429

30 %

246

55 %

236

Infield flowlines

1 516

107

40 %

606

13 %

14

Drilling and wells

4 021

4 374

65 %

2 614

50 %

2 197

Subsea equipment and drilling & wells

9 012

8 210

Logistics

85

139

100 %

85

100 %

139

Insurance

590

302

40 %

236

10 %

30

32 022

25 867

Fabrication and procurement process equipment

Mating and completion Floater Subsea Equipment Umbilical

Total

3 685

3 337

5 458

4 767

14 045

All numbers in MNOK

24

Aasta Hansteen and Polarled

10 911

Photo: Statoil

Momek No other subcontractors from Northern Norway can claim to have more contracts for the Aasta Hansteen and Polarled projects than Momek.

Momek Group AS is located in the Mo Industrial Park.

In addition, Momek also have been

other anchors will moor the platform's

responsible for major deliveries to the

risers and stop any pipe expansion.

renovating of the old rebar wareho-

The biggest suction anchors will

use at the Rana Industrial Terminal

weigh more than 100 tons each.

for Wasco Coatings Norway (the new production building). A wide range of

Ripple effects from this contract have

local subcontractors was involved in

spread locally to many subcontractors

this work. Momek has large deliveries

for support services, particularly for

to the construction of the new subsea

surface treatment and welding inspe-

base at Sandnessjøen. This agree-

Momek signed an agreement with

ctions. Steel is purchased abroad. The

ment was signed in 2014 with Torstein

Subsea 7 in 2013 to deliver 25 suction

anchors were finished and delivered

Botn AS. The client for this job is the

anchors for Aasta Hansteen. This

during the winter of 2015.

Helgeland Base. Statoil and BP Norge

is the largest contract in Momek’s

will be using the base as a warehouse

history. 17 of the anchors will be used

and shop for subsea equipment.

Budget regional share %

to moor the SPAR platform, while the

Commited regional deliveries

Beløp

%

Budget local share

Beløp

%

Commited local deliveries

Beløp

%

Table 4: Comparing deliveries with initial goals

Beløp

The first column in Table 3 shows the original

0

0

10 %

213

0

0

100 %

213

0

6

0

0

0

0

0

0

2%

50

0

6

50 %

25

0

0

5%

23

0

0

75 %

17

0

0

10 %

82

7%

78

100 %

82

100 %

78

as an overview of agreements for Norwegian

20 %

42

0

0

100 %

42

0

0

deliveries during the project. Similar presen-

197

84

166

78

3%

60

11 %

259

80 %

48

0

0

0

0

0

0

0

0

0

0

0

0

0

0

5%

131

0

0

95 %

124

0

172

238

191

259

92 %

238

70 %

60

0

0

100 %

60

0

0

0

0

0

0

0

0

0

0

454

556

Preliminary Ripple Effect Study

398

investment budget in 2011-kroner.

The second column shows an overview of signed contract for the various cost items as of 31.12.2014. Then the table shows the budgeted goals in relation to Norwegian deliveries, as well

tations are made for the share of regional and local deliveries. These deliveries have been signed directly with Statoil or with their main contractors.

529

25

Photo: Allseas

7. Delivery of Goods and Services during Polarled Development The Polarled development is an investment that requires significant product and service deliveries from Norwegian businesses, and creates valuable employment effects in the Norwegian society. Preliminary figures show that Polarled has already yielded significant ripple effects both locally and nationally. The project was about 58 percent completed by the end of 2014. Still a large portion of the work remains. Both national and local ripple effects will increase during 2015.

Expectations from Polarled development

over four years from 2013 to 2016. Statoil's updated budget

The policy impact assessment states that initial invest-

shows an estimated investment of about 7.5 billion kroner.

ment budget for Polarled was 11.1 billion kroner. It also

Despite the size of the investment budget, we anticipate

states that the anticipated goods and services for develop-

Norwegian participation at 35 percent.

ment would generate ripple effects on a national scale

There has already been significant activity within indus-

for approximately 3.9 billion kroner ( 2011-kroner), which

trial and construction activities for the pipe laying project

is equivalent to 35 percent of all investments distributed

in areas of pipe coating, installation and commissioning

26

Aasta Hansteen and Polarled

and completion and for the delivery of rock and stone.

sia to Mo i Rana. Grieg Shipping has a Norwegian billing

There is still installation and commissioning work to be

address, hence its delivery is considered as Norwegian

done. There will be a need within transport and distribution

value creation. The figures presented in this preliminary

for storing and transporting pipes, and other significant

report cover the extent of Norwegian value reduced by 20

jobs related to inspection and installation done by ships,

percent because of expenses incurred abroad. The pipes

and excavation, trenching and gravel dumping by ship, and

are warehoused in Mo i Rana and in Kristiansund until they

logistics/distribution for piping vessels. These activities

are laid. The laying operation starts in March 2015. Half of

are expected to have a major influence on society in 2015

the pipes is shipped to Polarled from Mo i Rana, while the

and 2016. There are also opportunities for local contracts

other half are sent from Kristiansund where they are sto-

near the bases and within land-based support.

red in Vestbase (Averøy) until needed. Shipping the 40 000 pipes from Kristiansund and Mo i Rana to the ­Polarled

The project's main activities

development site will mean a lot of ship traffic that will

Project management and planning

generate significant ripple effects.

Statoil has a project team based in Stavanger consisting of about 30 employees dedicated to the Polarled project. Engi-

You can read more about the ripple effects from Wasco's new facilities at Mo i Rana on page 31.

neering was done by Rambøll Oil & Gas in Denmark. Reinertsen Engineering in Trondheim did the third-party verification.

Subsea installations

Norwegian ripple effects from the engineering part of the

Polarled also has secondary subsea installations and

project constitutes an insignificant part of the whole assign-

structures in addition to the pipelines. These structu-

ment. The project is not very challenging from a technologi-

res include the end station at Aasta Hansteen to connect

cal standpoint, although the depth and bottom conditions in

Polarled to the risers on site, and connection points to

the area represent major challenges compared to previous

tie-in existing and future pipes from other fields.

installations. The budgeted cost for project management,

Kongsberg Oil and Gas Technology (NEMO) was awarded

and engineering, amounts to approximately 700 million kro-

the EPC contract to deliver the Structures (Engineering,

ner for the entire period. We estimate that approximately

production and installation). The NEMO will carry out the

371 million kroner has been allocated by the end of 2014.

entire fabrication process for Polarled at its own fabrication plant in Drammen. Purchases from abroad constitute

Fabrication of piping parts and coating

only a minor part of this assignment. Most of Kongsberg’s

Marubeni Itochu/JFE was awarded the contract to fabri-

procurement is in Norway and mainly from regions in the

cate the pipes needed to construct Polarled. All the work

southeast. Engineering is done by Kongsberg Oil and Gas

was done in Japan, so there are no ripple effects for Nor-

Technology's headquarters in Asker. The biggest subcon-

wegian companies on this part of development. After

tractors for this assignment are Aker, Nemotech and FMC.

fabrication in Japan the pipes were transported to Wasco

The first deliveries were delivered in late 2014, while the

in Malaysia, which was assigned the task of applying the

final deliveries will be ready by August 2015.

outer corrosion coating and inner float stability coating. In 2013 Wasco decided to set up a new production facility in

Other equipment

Norway (Mo i Rana). Wasco is a division of the Malaysian

Other suppliers of equipment for Polarled are the British

company assigned to apply the flow coating on the inside

company Freudenberg (formerly Vector) and the Italian

of the pipes (a flow-coat is a very thin coat of paint) and

company Petrovalves. These are small deliveries on equip-

corrosion protection outside a (three coats). In addition,

ment. To the best of our knowledge, no Norwegian subcon-

Wasco Malaysia produced the sacrificial anodes. In case

tractors are involved.

of damaging, the anodes acts as a backup system. All the pipes were sent to Mo i Rana, where an exterior concrete

Construction work offshore

ballast coating was applied to the pipes to protect them

Installing the pipeline

and innstallment of the sacrificial anodes.

Allseas (Delft, Netherlands) was awarded the contract to

Activities in Mo i Rana represents more than half the

lay the pipeline. Installation work will be done from the

contract value and have generated significant employment

vessel Solitaire, which is one of the world's largest vessels

and other ripple effects for supplier companies in Helge-

on the market for laying this type of pipe. Installation lasts

land and in other locations in Norway. Sixty-one percent of

for about six months, from March to August 2015.

the fabrication deliveries were done by the end of 2014.

The Bergen-based company Grieg Shipping holds the transport contract to get the pipes from Kuantan in Malay-

Preliminary Ripple Effect Study

Allseas did the engineering work from its offices in the Netherlands. The pipeline consists of 12.2 m long pipe sections that will be transported from Kristiansund and

27

Mo i Rana to the laying vessel. The pipe sections are wel-

A helicopter is required to transport crews back and forth

ded together on board the Solitaire. Work will begin in

from Kristiansund. Fifty of the 420 workers on board

Nyhamna and continue along the route until the pipes

­Solitaire will be shuttled back and forth every week. Crews

reach Aasta Hansteen. Smaller vessels will continuously

arriving in Norway usually spend their first night at a hotel,

supply Solitaire with pipe sections and parts. These ves-

which will generate noticeable ripple effects in downtown

sels are contracted by Statoil. Only three transport vessels

Kristiansund.

The vessels that shuttle the pipes to Solitaire from

will be used at the beginning, but there will be six vessels shuttling pipes to Solitaire as they reach the end. The vess­

­Kristiansund and Mo i Rana will also generate extensive

els are owned by Norwegian companies.

ripple effects in both cities. Shuttle traffic will require bun-

The largest cost item for Allseas is the lay vessel itself

kering, provisions, supplies and other services.

(Solitaire), with 420 employees on board. Only a small port­ ion of Allseas’ work involves subcontractors. Norwegian

Services and light construction work / maritime operations

suppliers will provide about 80 percent of all necessary

Statoil has signed a framework agreement with DOF Sub-

operational procurements for the vessel that includes gra-

sea and Deep Ocean to provide services and light constru-

vel, damage repair parts and systems and special compo-

ction work for the Polarled pipeline project. DOF Subsea

nents – along with support services from the land-based

and Deep Ocean are Norwegian ship-owners with Norwe-

stations and the harbor. Allseas has a contract with the

gian crews on board. Both companies will provide Solitaire

Norwegian company Baker Hughes for backup services (in

with lay support at different times of the assignment. The

case of damage during the laying process). Another Nor-

vessels will be stocked with essential equipment and have

wegian supplier helping Allseas with pipe laying is T.D. Wil-

subcontractors on board. Important tasks for Deep Ocean

liamson Norway. They are delivering a special kind of plug

and DOF Subsea vessels:

used to seal any leaks during the pipeline laying. Allseas

•

will purchase the necessary gravel (used as a protective layer over the weld sections/joints) from Stavanger. The

Pre-lay surveys, where they verify the seabed where the pipe is to be laid

•

Trenching activities

provisions and supplies are from Vestbase in ­Kristiansund.

Foto: Vestbase

28

Aasta Hansteen and Polarled

• •

•

Installing counterweights on the pipeline before and

mated at about 630 000 tons. The dumping contract was

after installation

awarded to Van Oord Offshore and Boskalis Offshore Tide-

Installing the Pull-in-wires. When Solitaire arrives to

way Joint Venture. Stone is important because it helps

commence laying operations, one of its first tasks is to

stabilize and protect the pipeline and the other subsea

lay a wire is to pull the pipe off the vessel to Nyhamna

installations.

Installing PLEM (pipeline end manifold) at Aasta Hansteen. After laying the pipe a spool is added to the end

Intermediate storage of pipes

to connect the parts together. Meterological data must

Vestbase AS has a contract with Wasco Coatings Norway to

be collected to aid in fabricating of the final piece to

store the Polarled gas pipes at the company's Averøy site.

facilitate installation on the seabed

Space is needed for about 20 000 pipes from October 2014

•

Touch-down monitoring is needed to make certain the

to August 2015. The concrete-coated pipes are 36 inches in

pipe is installed in the proper position

diameter and 12 meters long. About 500 000 tons of pipes,

•

A post-lay survey is required to verify that the pipeline

will be shipped in and out of Vestbase, Averøy (the new

was installed relative to the specified route

quay at Hestvikholmen).

•

Half of the pipes will be shipped from Wasco Coatings

Ready for operation (RFO)/startup assistance

factory in Mo i Rana to Vestbase Averøy daily from October Both companies employ subcontractors. Deep Ocean

2014 to January 2015. The pipes will be stored temporarily

handles most of their equipment from its own station in

at Vestbase until March 2015 when the lay vessel begins

Haugesund. A wide range of ripple effects can be expec-

transporting them to sea. The remaining pipes will be ship-

ted in and around Kristiansund, where they plan to stay

ped directly from Mo i Rana to the lay vessel.

one month during lay support. The shortest route to land is

The deliveries from Kristiansund will probably reach 34

a decisive factor in determining where crews will be trans-

million kroner. Most of this amount involves pipe storage,

ported by boat. It is logical to assume that a vessel will

harbor services, the helicopter base and the purchase of

be stationed in Sandnessjøen, if other services are requ-

miscellaneous parts. This figure will probably rise signifi-

ired later in the project. Deep Ocean leases a vessel from

cantly during the construction phase.

Vollstad Shipping in Ålesund for that purpose. Purchasing the provisions and supplies for this assignment is done

Ripple effects from the Polarled project

through Vollstad Shipping, but the supplies will come from

At this stage of the project it is not possible to provide a

abroad. DOF Subsea uses Kristiansund as its base due to

complete picture of all ripple effects in Norway during the

its proximity by boat. Provisions and supplies will also be

development phase. This preliminary report is only describ­

purchased locally. DOF Subsea uses some equipment

ing ripple effects that have been verified up to now. We still

subcontractors, mostly from Bergen. The choice of harbor

do not have reliable data for transport or support functions

will be of great significance in determining ripple effects.

that allows us to provide a complete picture. Ripple effects

Sailing time will determine whether the vessel will head for

are categorized in terms of deliveries from national compa-

Sandnessjøen or Kristiansund.

nies or local companies. Even though many contracts have

Sea floor intervention

we did try to determine the time ripple effects would take

The entire pipeline route will require stone/gravel dumping,

effect. We asked the main Norwegian contractors to provide

concurrently with seabed installation work. The process

us with estimates of what they expect to import so we could

been signed, much work is not covered in this report, but

is divided into pre-lay (completed in 2014) and post-lay

deduct these figures from the final values stated here. We

(which will be finished in 2015). The need for stone is esti-

also added the export value of deliveries going to the pri-

Table 5: Anticipated deliveries to Polarled.

Polarled

Committed dec 2014

Project management

Norwegian deliveries %

Regional deliveries

Mill 2014 - kr

%

Local deliveries

Mill 2014 - kr

%

Mill 2014 - kr

700

91,3 %

639

0,0 %

0

0,0 %

0

Fabrication

3 640

27,7 %

1 009

67,4 %

680

95,9 %

652

Maritime operations

1 549

46,6 %

722

2,9 %

21

4,8 %

1

300

0,0 %

-

0,0 %

0

0,0 %

0

6 189

38 %

2 369

29,6 %

701

93,2 %

653

Insurance Total All numbers in MNOK

Preliminary Ripple Effect Study

29

mary foreign contractors. Our study identified contracts for

bor services. The reason is described above. There is great

6.2 billion kroner of a total budget of NOK 7.5 billion kroner

uncertainty about what kinds of ripple effects could be

(83 percent), which represents a Norwegian share of 2.4 bil-

generated here, since we still do not know which harbor the

lion kroner (38 percent). It appears that the project will reach

ships will use. Insurance will only have a marginal effect.

the defined goal of 35 percent Norwegian share. Fabrica-

All the major suppliers were asked to estimate degree of

tion amounts to 3.6 billion kroner. Wasco Coatings Norway,

completion by 31 December 2014. Based on their estima-

Marubeni and Kongsberg Oil & Gas are included in this amo-

tes, we were able to classify values for two distinct periods:

unt. The Norwegian share of this is 27.7 percent and mostly

2013-2014 and 2015-2017.

related to Wasco’s work in Mo i Rana. Total Norwegian deli-

Of Norwegian deliveries worth 2369 million kroner, about

veries are approximately one billion kroner; of this amount,

1009 million kroner were produced in 2013–2014. That

local deliveries are 680 million kroner. Maritime operations

amounts to about 43 percent. The rest will come in 2015–

usually have a higher share of ­Norwegian content. The Nor-

17. Regional deliveries amounted to 409 million kroner in

wegian deliveries amount to 46.6 percent for this project.

2013/2014, of which 58 percent has been identified so far.

We assume the ­Norwegian share for pipe transport vessels

Regional deliveries will be 292 million kroner in 2015. Local

and supply services will amount to 95 percent. Only a limited

deliveries amounted to 60 percent in 2013–2014, about 392

share of provisions, supplies and other equipment will come

million kroner. Regional deliveries here will amount to 261

from abroad. Maritime operations thus far only include one

million kroner in 2015. We assume local deliveries for mari-

contract for a Northern Norwegian shipping company and a

time operations will increase in the second period.

very conservative estimate for local ripple effects from har-

Table 6: Overall ripple effects from the Polarled project for 2013–2014 & anticipated deliveries for 2015–2017 Norwegian deliveries Totalt

Project management Fabrication Maritime operations Insurance Total

2013-14

%

Regional deliveries

2015-17

639

371

58 % 268,38

1 009

613

61 %

722

26

4%

Totalt

2013-14

%

Local deliveries 2015-17

Totalt

2013-14

%

2015-17

0

0

0%

0

0

0

0%

0

396

680

409

60 %

271

652

392

60 %

260

696

21

-

-

21

1

0

0%

1

0

-

0%

-

0

0

0

0

0

0

0%

0

2 369

1 009

43 %

1 360

701

409

58 %

292

653

392

60 %

261

All numbers in MNOK

Figure 1: Schedule Polarled Development Project Tie-in Aasta Hansteen,PLEM: Q3 2015 Preparation: Q1–Q2 2017 Pipeline installation: Q1–Q3 2015 Seabed intervention: Q2–Q3 2015

Preparation on land + tie in: Q1–Q3 2015

2013

30

Seabed intervention, rocks: Q2–Q3 2015

Rock installation - seabed: Q1–Q3 2014

Fabrication Line Pipe, Coating: Q2 2013 – Q2 2015

2014

2015

2016

Startup, first gas to Aasta Hansteen: Q2–Q3 2017

2017

Aasta Hansteen and Polarled

Photo: MIP

The ripple effects from activities at Wasco Coatings Norway are significant.

to deliver pipes for future develop-

cipality of Rana or in neighboring

ment projects in the North Sea, the

municipalities around Helgeland. The

Norwegian Sea and the Barents Sea.

employees work in shifts that make

Wasco Coatings ­Norway leases 13 000

the facilities highly effective and

m2 of production facilities in the Mo

allow for operations six days a week.

Industrial Park, in addition to the lar-

Major investments have been made in

ger area at their disposal at the Rana

buildings, local utilities and infrastru-

Industrial Terminal. The company spe-

ctures, and more than half of procure-

Statoil awarded Wasco Energy Ltd

cializes in concrete coatings to protect

ments in this context are local. Major

the contract to coat the pipes for the

subsea oil and gas pipelines. Wasco in

procurements are also being made

Polarled project in February 2013.

Mo i Rana will be coating 40 000 pipes

for the facilities at Mo from other

Wasco Energy chose to do parts of

for the Polarled project with a prote-

businesses in Nordland, and there is

this work in Norway, although it could

ctive layer of steel reinforcements and

a significant amount of activity con-

have been done abroad. They decided

concrete before the pipes are lowered

nected to harbors in Mo i Rana and at

to set up a production facility (Wasco

to the seabed. The first pipes were

Vestbase’s areas at Averøy.

Coatings Norway AS) with 180 employ-

en-route from Malaysia to Mo i Rana

ees at the production base in Mo i

in November of 2014.

Rana. Wasco’s facilities in Mo i Rana

Recruiting employees to work at

is the Malaysian company’s biggest

the new facilities was not difficult.

commitment in Europe. They intend

Most employees live in the Muni-

Preliminary Ripple Effect Study

31

8. Location and Investment decisions Several companies have positioned themselves to compete on the Aasta Hansteen and Polarled contracts. Much of this activity occurred after the contracts were signed, which required investment decisions about new facilities, equipment and infrastructure. Some of these preparations, decisions and investments were a direct result of the aforementioned projects. Examples of this are Wasco's facilities in Mo i Rana and the subsequent construction and investments, and the expansion of Aker Solutions in Sandnessjøen. Many investments in infrastructure would probably not have occurred without the Aasta Hansteen and Polarled projects. This includes investments in new office for Statoil Harstad. We can also see proof of these investments in Sandnessjøen, at the growing base, the construction being done near the harbor, extended runway at the airport, hotels/accommodations have become developed, and a new cultural center was built.

Decisions about where to locate facilities

industry. There are approximately 666 persons employed

Localization decisions for business and departments are

by these companies. Although not all these employees are

usually based on several criteria that are emphasized by

associated directly with the Aasta Hansteen and Polarled

the decision maker. We gathered data for this report to

projects, the data indicate these projects contributed gre-

determine whether these decisions were directly related

atly to the decision to locate specific functions in the region,

to the Aasta Hansteen and Polarled, or not. We found a

and these projects are and will account for a significant

number of examples that indicate locations were chosen

share of resources at these companies in the region as far

based on expectations from Aasta Hansteen and Polarled,

as figures for 2014 have indicated.

or related to specific contracts that were signed for these projects:

Investment decisions

•

Statoil’s expansions in the region north of Harstad

of Aasta Hansteen and Polarled. The forthcoming reports

•

Wasco setting up company in Mo i Rana

will present a more detailed overview of investment acti-

•

Aker Solutions setting up branch in Sandnessjøen

vity by Norwegian suppliers for each project when the pro-

•

Aker Solutions Tromsø

ject was the reason for the investment.

•

Subsea 7 Tromsø

We have focused on investments that were a direct result

Investment decisions are made according to a number of specific criteria. For most of the Norwegian suppliers,

All this requires hiring employees, ensuring access to

these criteria involve an assessment of existing infrastruc­

professionals, finding office space nearby, which also influ-

ture and capacities the company already has in place. That

ences and reinforces the growth of professional environ-

is why Norwegian suppliers did not need to make major

ments in Northern Norway associated with the petroleum

investments for these projects.

32

Aasta Hansteen and Polarled

Photo: Aker Solutions

•

The construction of the harbor facilities at

infrastructure and equipment, as a direct result of Aasta

•

Harbor construction and growth at Sandnessjøen

Hansteen and Polarled (by Norwegian suppliers). 67 mil-

•

Development, construction and upgrades to hotels in

•

Investments in a cultural center and swimming

used. Even though these figures include a certain amount

•

Extending the runway at Sandnessjøen Airport (Stokka)

of import, the investments must be seen as important for

•

Expansion of the helicopter base at Brønnøysund

value creation leading up to 2015.

•

Expansion of offices in Helgeland and Harstad

Preliminary figures indicate that investments of appro-

Sandnessjøen

ximately 71 million kroner were made in the region for

Brønnøysund and Sandnessjøen

lion kroner is related to upgrading facilities. The local share of this amount to about 55 million kroner in which local

facilities in Sandnessjøen

contractors and Norwegian equipment suppliers were

Infrastructure development

Future reports will try to quantify the scope of these

There has been a great amount of optimism in Sandnes-

investments, and in which way Aasta Hansteen influenced

sjøen and Helgeland since the development phase started

the decisions to invest.

on the Skarv field. The optimism grew even further after the decision to commit to Aasta Hansteen and Polarled was made. This resulted in many large projects related to future activities for the Aasta Hansteen project about investment and later, during the operational phase. We can mention these projects as examples:

Preliminary Ripple Effect Study

33

Foto: Aker Solutions

9. Local and Regional Input The entire region has great expectations about increased ripple effects from increased petroleum activity off the coast of Northern-Norway. Geographical proximity and environmental gains are two benefits favoring local and regional suppliers. Expectations are based on previous activity and experience from both successes and failures in the past.

Expectations from development and operation of Aasta Hansteen

Statoil’s efforts to generate ripple effects in the North of Norway

We interviewed suppliers, municipalities and county muni-

The respondents and informants in this study had the

cipal representatives from Nordland and Troms and other

impression that Statoil show a sincere desire to generate

operators about their expectations for the Aasta Han-

ripple effects in the region during field development. All the

steen development project. They all expected major ripple

respondents felt the interaction with Statoil as very posi-

effects for the supplier industry, but they also anticipated

tive. The dialogue with Statoil's representatives in H ­ arstad

positive effects for the region as a whole. There seems to

and Stjørdal is positive, but uncertainty is experienced

be some uncertainty about which phase, development or

about whether to communicate with Harstad, S ­ tjørdal or

operations, would generate the greatest ripple effects.

Stavanger.

Statoil conducted several supplier seminars and implemented other measures to share information about the project and also to inform main national and international suppliers about the Northern N ­ orwegian supplier industry.

34

Aasta Hansteen and Polarled

The ripple effects in Harstad and Southern Troms are

They also support professional development. The respondents thought these measures were useful.

still limited, but when the operational headquarters are finally in place, and the area expects to see big differences.

Perceptions about the regions own efforts

Statoil is investing big in Northern Norway, especially after

Differing opinions exist among the informants from business

they set up their new offices in 2017 (See the illustration

and industry, county representatives and municipal repre-

of the new Statoil building on page 36). After the operati-

sentatives about the effort that went into positioning the

onal headquarters for Aasta Hansteen came to Harstad,

Northern Norwegian supplier industry for Aasta H ­ ansteen

the city now has a much better foundation to build on. The

and Polarled assignments and contracts. However infor-

informant from Subsea 7 said their company business

mants did agree that the regions in the north had made

strategy includ­ed a goal of setting up a branch in Northern

more progress positioning their suppliers for the petroleum

Norway. Aasta H ­ ansteen made that possible.

market as a whole. There is still some way to go before local and regional businesses, industry and other influential parties reach a level of professionalism to compete with their competitors in the south. Many informants indicated how

This is what Statoil should do in the future to generate more ripple effects in Northern Norway

municipalities in the north need to start thinking beyond

Our interviews and questionnaires gave indications about

their own borders; professional environments could help the

what people thought Statoil should do in the future to stim­

region develop even more by thinking big and participating in

ulate positive effects in Northern Norway. This list is a

debates about where and how to locate key infrastructures

summary of their thoughts (non prioritized). Recommenda-

etc. The Northern ­Norwegian Petroleum Council is an impor-

tions shown in the non-priority list:

tant driving force in this work.

Informants from Helgeland and North-Norway in gene-

•

Helgeland would greatly benefit from another opera-

ral were disappointed when the contract for mating and

tional support unit in Sandnessjøen; one of the tasks

completion the Aasta Hansteen platform was lost. Despite

of the unit should be a purchasing department that understands local markets and local companies

this disappointment, the H ­ elgeland region today knows that this type of work is feasible in the area, with a thought

•

tracts should be divided into smaller ones, which is of

to future projects. One informant felt this contract would

particular importance during the operational phase

only have led to the construction of one platform, so Helgeland should focus energy on contracts that lead to las-

Redesign the current contract structure. Larger con-

•

Less focus on risks and sign contracts with companies

ting ripple effects, i.e. contracts that create more jobs and

even if they have a lack of experience from the petro-

long-term activity in the region that companies can build

leum sector (but have proven they are competitive in other sectors)

on to expand markets, increase employment and grow professionally.

•

should be seen in the context of transport and f­ reight

The informants told us about a number of positive

costs. Statoil should facilitate this to give local

events that to a greater or lesser degree were related to

­businesses a competitive advantage

expectations around Aasta Hansteen in the development phase. Professionals in Helgeland were especially ple-

•

Continue good communication by staging more supplier

•

Contribute to professional development within the

seminars

ased with the decision to locate the supply base in Sandnessjøen, a helicopter base at Brønnøysund and establish

Geographic proximity is an environmental gain; this

supplier industry, i.a. through programs like LUNN

a subsea base in Sandnessjøen. These informants also thought Aasta H ­ ansteen brought optimism to the region

in Northern Norway. There is still a need for more

and inspired people to open new businesses, new hotels,

skilled project managers within the offshore

extend the runway at Sandnessjøen Airport, expand cultu-

industry in the north

ral initiatives and create a sense of opportunity for employ-

•

Continue to require the main contractors to use

•

Provide Northern Norwegian companies with real

regional suppliers

ment close to home.

The informants from the supply industry experienced

opportunities to compete on maintenance and

a lot of interest in their recruitment processes. Many peo-

modification contracts

ple applies for advertised positions despite the fact there is virtually no unemployment in Helgeland. For many young

•

Access to capital is essential if the Northern

•

Use local workers, which will reduce travel and

­Norwegian supplier industry is to grow and develop

adults these kinds of development projects provide opportunities for exciting jobs close to home.

personnel costs

Preliminary Ripple Effect Study

35

Illustrasjon: Statoil ASA

10. Expectations for Ripple Effects in the Future – the Operational Phase Statoil Harstad is responsible for all land-based operations related to the Aasta Hansteen field. The decision in 2012 to locate the operational headquarter in Harstad is in line with Statoil's ambition to strengthen landbased activities in Northern Norway as petroleum activities are moving farther north. The ripple effects generated by the operational phase will be especially visible in Harstad, Sandnessjøen and Brønnøysund.

36

Aasta Hansteen and Polarled

Harstad – The Petroleum capital of the north

the supplier industry. Employment in and around Harstad

The planning for the Aasta Hansteen production phase has

in recent years has risen rapidly within the financial and

already begun. The organization should be operational by

commercial services.

2017. Statoil is trying to create synergies with Norne field

Increased activity at Statoil’s Harstad office also crea-

operations, so many of the same people will be dedicated

tes opportunities for local suppliers or subcontractors who

to operations at both fields. The land-based operational

will benefit from Statoil’s presence in the region.

organization covers tasks such as managing operations,

Statoil's presence is the reason many new businesses

reservoir management, production support, maintenance

have appeared in Harstad over the past few years. This is

and modifications, logistics, procurement and EHS.

especially apparent in the branch offices of major inter-

Statoil is the second largest employer in Harstad. The new office building will accommodate 600 jobs. This con-

national and national companies now setting up offices in town. Aside from Statoil, the biggest operators in Har-

firms Statoil's long-term plans for Northern Norway. The

stad in 2014 were the Norwegian Petroleum Directorate,

Municipality of Harstad is expecting great ripple effects

Total, Det norske, Aibel, Schlumberger and DNV Northern

after Statoil decided to run Aasta Hansteen from Harstad.

­Norway. More growth and activity associated with Aasta

The city hopes to see more operational headquarters in

Hansteen will stimulate further growth of new businesses.

Harstad in the future.

Future expectations for growth in Harstad The informants in this study thought the decision to station the operational headquarters in Harstad was of great importance both to maintain and strengthen the ­Statoil organization in Harstad. The number of employees at

"Aasta Hansteen is a symbol of prog­ ress in Northern Norway, and proof that Northern Norway is the future of the oil sector" Marianne Bremnes, Mayor of Harstad

­Statoil is expected to rise, but growth is also expected in

Preliminary Ripple Effect Study

37

Statoil Harstad is working heavily in orderd to facilitate

for the platform during the operational phase. Food, water,

professional development within education and industry.

chemicals, equipment and spare parts are some examples

Increased activity from Aasta Hansteen is the foundation

of these goods. Maintenance to subsea installations and

for professional opportunities at local companies that are

assistance during drilling operations are common services

trying to get a foothold in the petroleum sector as suppli-

offered by the supply base at Sandnessjøen.

ers. Statoil is an important factor in making Harstad an

The heliport for the Aasta Hansteen field is in

attractive place to work for people with higher education

Brønnøysund. The helicopter base will transport personnel

who want to live in Northern Norway. Harstad’s population

and equipment to the platform during the operational phase.

is highly educated, which partly can be explained by the

The respondents have different opinions about which

fact the city has a University College located there, but it is

effects the operation phase will give in Sandnessjøen and

now a city that can offer jobs that require higher education.

Brønnøysund. They believe the scope of ripple effects will

It was Statoil and the other major petroleum operators that

largely depend on Statoil’s final contract strategy. This is

brought these jobs to town.

particularly true for the maintenance and modification

There is a lot of excitement as to which companies would

contracts, but it will also apply to elements like provisions,

be chosen for maintenance and modification contracts.

supplies etc. that are needed on the platform. One of the

Several of the respondents pointed out the importance of

respondents feared Sandnessjøen would only profit from

Statoil selecting local suppliers for these tasks.

the development phase, to become a "delivery boy" for the

Growth in employment will stimulate consumption and housing construction that can be seen as significant ripple effects in the community.

duration of the operational phase.

The majority of the respondents however thought that Aasta Hansteen would contribute to maintain and strength­­ en the petroleum industry in Sandnessjøen

The supply base in Sandnessjøen and the heliport in Brønnøysund

referred to how the Aasta Hansteen development, as with

Activities at the supply base will change when the field

previous development projects, increased volume at a

throughout the operational phase of this project. They

development phase ends and the operational phase

local level above a critical mass, which is important for

begins. The supply base will provide goods and services

supplier industries.

Figure 2: Anticipated deliveries in the operation phase of Aasta Hansteen Industry

Source: Agenda Kaupang

Transport Trade, hotels and restaurant Constructions Petroleum Other services Total 0

100

200

Helgeland

300

Harstad

400

Regional deliveries

500

600

700

800

Norwegian deliveries

The operating costs for Aasta Hansteen will vary over time, but an average year will require 850 million kroner (2011-­kroner).

Of this amount, Norwegian deliveries are estimated to be 741 million kroner per year. Of Norwegian deliveries, an esti­ mated 28 percent are expected to be local, which means Northern Norwegian value creation for an average year will be 205 million kroner. The biggest ripple effects in Helgeland will probably be within industries that offer distribution serv­ices, supply operational materiel and spare parts, and provide maintenance on subsea installations, as well as catering.

38

Aasta Hansteen and Polarled

Svalbard

Petrokartet Olje og gass i Nord 2014

Olje og gassfelt

Longyearbyen

© Copyright 2014 Petro Arctic www.petroarctic.no Petro Arctic har kontorer i Hammerfest, Harstad, Bodø og Sandnessjøen.

Kartet utgis i samarbeid mellom Petro Arctic, Kunnskapsparken Bodø og Kunnskapsparken Nord.

Norne

PL 128 og 128 B Operatør: Statoil Partnere: DONG, Eni, Petoro, Statoil Ressurser Olje: 103,5 mill. Sm3 Gass: 25,4 mrd. Sm3 NGL: 2,6 mill. tonn Kondensat: 2,9 mrd.

Havdyp: 380 m.

Design: riktigspor.no

Jernbane

Oljeselskaper - operatører Svalbard-boksen

Gassrørledning

Oljevernberedskapsdepot

Fremtidig gassrørledning

Landanlegg gass

Fremtidig oljerørledning

Landanlegg olje

Antatt maksimumsutbredelse Danmark av

Gassfelt - feltsenter

sedimentære bergarter som kan inneholde petroleum

Olje- og gassfelt - feltsenter Ikke åpnet for petroleumsaktivitet

Universitet/høgskole

Ingen petroleumsaktivitet

Servicebedrifter - olje og gass

Åpningsprosess startet

Subsea lager/verksted

Åpnet for petroleumsaktivitet umodent område

Norge

R

Johan Castberg (under utvikling)

BARENTSHAVET NORD PL 532

PL 218 Operatør: Statoil Partnere: ConocoPhillips, OMV Norge, Statoil Ressurser Gass: 46,3 mrd Sm3 Kondensat: 0,8 mill tonn Sm3 Havdyp: 1300 m.

Operatør: Partnere: Ressurser Olje: Havdyp:

2000

Bjørnøya

Lisenser Barentshavet russisk side

3000

PL 229 Operatør: Eni Partnere: Eni, Statoil Ressurser Olje: 30,6 mill. Sm3 Gass: 7,3 mrd. Sm3 NGL: 0,3 mill. tonn Havdyp: 360 – 420 m.

Aasta Hansteen (under utbygging)

Åpnet for petroleumsaktivitet modent område TFO

200 km

1979-2

Centra

Forsyningsbase

3000

PL 110, 097,077, 064, 078, 099, 110 og 100 Operatør: Statoil Partnere: GDF SUEZ, Petoro, RWE Dea, Statoil, Total Ressurser Gass: 172,8 mrd. Sm3 rs måned NGL: 8,7 mill tonn ense ma r g s i Kondensat: 21,8 mrd. avSm3 gh Havdyp: 310 ttli - 340 m.

ni ms no n e GjGoliat (under utbygging)

PL 262, 159, 212 B, 212 Operatør: BP Partnere: BP, E.ON Ruhrgas, PGNiG, Statoil Ressurser Olje: 15,3 mill. Sm3 Gass: 43,4 mrd. Sm3 NGL: 5,7 mill. tonn Havdyp: 320 – 420 m.

Helikopterbase

Statoil Eni, Petoro, Statoil 65 – 95 mill. Sm3 365 m.

3000

20 00

20 0

Kilder: Sokkelkartet Oljedirektoratet, Petro Arctic m.fl.

3000

00 15

400

3000

20 00

00 20

10 00

3000

Hopen

Skarv

Oljefelt - feltsenter

Norge

Snøhvit

BARENTSHAVET SØR

500

BARENTSHAVET SØRØST

2000

20 00

2500 00 20

00 10

Johan Castberg

1,5 time

30 00

2000

500 400

20 00

3000

3000

300

Snøhvit

8 timer

Goliat

200

00 20

200

300

VEIDNES

300

Honningsvåg

MELKØYA 3000

Hammerfest 200

200

20 0

100

H

10 0

0 30

25 00

0 30

100

40 0

Tromsø

Finnmark

500

200

3000

den meste måne p. for den var Gjennomsnittstem

under 10º

C

2000

0 20

NORDLAND VII

Vesterålen Lødingen

2500

200

1500

20 00

Lofoten

1,5 time

30 00

NORDLAND VI

Troms Harstad

0 10

00 10

NORGE

0 10

NORSKEHAVET NORDØST 1500

0 30

400

3000

Kirkenes

Alta

TROMS II

Narvik

0 20

Kiruna

200

Aasta Hansteen 100

00 20

Bodø

200

400

0 50

3000

0 30

300

NORSKEHAVET 400

1500

Barentshavet

Skarv 400

2500

00 30

Nesna

Træna 200

2000

Norne

Nordland

Kemijärvi

Polarsirkelen

Gällivare

Rovaniemi

Mo i Rana Mosjøen

300

Kemi

30 0

T/R 14-20 dager

Kristin

Brønnøysund 0 20

Åsgård

200

H

Luleå Oulu

Stavanger 200

Draugen

Njord

2000

400

500

300

40 0

Ormen lange

15 00

FINLAND

Haparanda

Sandnessjøen 400

Heidrun

Kolari

SVERIGE

0 20

8 timer

Vadsø

Nord-Trøndelag

200

300

10 00

TJELDBERGODDEN

0 20

0 10

500

NYHAMNA

Kristiansund

40 0

This is a part of Petrokartet 2014 30

Stjørdal Trondheim

0 10

20 0

Ørland

V

Østersund

Kunnskapsparken Bodø AS has many years of experience doing research and reporting growth of regional business and industry and evaluating district and regional policy, public agencies and business development. Petroleum is one of Kunnskapsparken Bodø’s areas of commitment.

Business school UiN is today one of the four faculties at the University of Nordland doing research and providing education at the highest international level within business economy and other areas that naturally fall within HHB’s educational disciplines. HHB promotes innovative, creative and international research and aims to be among the leading international research environments within HHB’s areas of commitment.

Petro Arctic is the supplier network for petroleum operations in the north. This network has established collaborative agreements with oil companies with fields in operation or fields that are under development in the Norwegian Sea, the North Sea and the Barents Sea. The network’s portfolio includes Snøhvit and Norne operations. Goliat, Aasta Hansteen (along with Polarled) and Johan Castberg are in their development phases. The network is collaborating with operating companies and key suppliers so Petro Arctic can help stimulate ripple effects from these projects, including deliveries from its member companies.

Design: by north™