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Tananger base – Ekofisk’s lifeline

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ConocoPhillips – a leading energy company Page 21

On the look out for new employees Page 6

Greater Ekofisk Area redevelopment

Greenland pioneers Page 3

Pages 8–11

Teesside – “the Installation of the Ekofisk 2/4 L jacket.

upstream refinery”

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Editorial

“Always looking for improvement!” ConocoPhillips Europe President Steinar Våge compares the company with a top athlete, always striving to be best.

“New” company – new opportunities As one of the largest independent exploration and production companies in the world, ConocoPhillips is in a good position to compete successfully and be a strong player within its core activity. The “new” ConocoPhillips sees the company’s European activities gathered in one region, headed from Norway. The top priority for the North Sea in the next three to five years is to complete the company’s major development projects on the Norwegian and British shelves and at Teesside, as efficiently as possible. This will increase production and strengthen the company’s position in the North Sea. Growth Further growth will primarily be organic. This mainly entails exploration, development of discoveries as well as increased production and recovery from existing fields. We will have strong focus on exploration in the North Sea, the Norwegian Sea and the Barents Sea. Exploration in northern areas requires additional expertise and vigilance, and we are positioned to deliver that. In the 21st licensing round, ConocoPhillips was awarded ownership interests in two licenses in the Barents Sea – one as operator. We are currently assessing these. In Baffin Bay, west of Greenland, we are currently preparing collection of new 2D seismic and drilling of shallow wells for core samples. Balanced portfolio ConocoPhillips in Norway has a balanced portfolio comprising operated fields and fields operated by co-venturers. There is a high level of activity in projects, with the new major developments on Ekofisk and Eldfisk, the cessation project and several projects in the implementation phase in the portfolio operated by co-venturers. The development projects in the Greater Ekofisk Area represent capital investments of up to 83 billion Norwegian kroner (2011 value). The unique reservoirs form the basis for this. More wells will be drilled – and this requires renewal of infrastructure – both above and under water. Ekofisk has produced since 1971, Eldfisk since 1979 – and with this, the fields’ lifetime will be extended by decades. Today’s multi-billion kroner investments will be tomorrow’s value creation.

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Publisher: ConocoPhillips Norge Ekofiskveien 35, P.O.Box 3, N-4064 Stavanger Phone: +47 52 02 00 00 E-mail: contact@conocophillips.com Editorial board: ConocoPhillips communication and government affairs Nyhetstjenester AS Photo: Kjetil Alsvik Design: Eirik Moe AS Print: Stavanger Aftenblad This publication contains forward-looking statements within the meaning of the «safe harbor» provisions of the Private Securities Litigation Reform Act of 1995. Actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Economic, business, competitive and regulatory factors that may affect ConocoPhillips’ business are generally as set forth in ConocoPhillips’ filings with the Securities and Exchange Commission.

As head of ConocoPhillips in Norway, the UK and the rest of Europe, Steinar Våge has many eyes upon him. With the responsibility for a production of more than 200,000 barrels of oil equivalent per day, from Ekofisk alone, he is concerned with maintaining focus and prioritizing when speaking of future challenges. “What you say is one thing, another is demonstrating that you can deliver as agreed and add value,” says Våge. Capacity and personnel When visiting Våge’s office in Tananger, it is easy to forget that the activities he leads generate a turnover of 100 million Norwegian kroner per day, 365 days per year, in Norway alone. When the Norwegian state and the other licensees have taken their share, large parts of the profit is invested in new projects. Steinar Våge has the overall responsibility for several major development projects in the Greater Ekofisk Area, including the construction of three major platforms. A major field development in the British part of the North Sea comes in addition. “It is very important to maintain progress in all parts of the development projects,” says Våge. In total, the Norway business unit will invest 83 billion kroner over the next three to five years, corresponding to one-fifth of the coming investments on the Norwegian shelf. Våge stresses the need for integration and planning between the development projects and the ongoing operational activities in the Greater Ekofisk Area (platform operations, drilling and well maintenance, maintenance and modification projects). Here we really get to test our integrated operations (IO) model. An important requirement for success is also getting skilled personnel in all disciplines. “We are hiring many new employees, and adding to our team in Norway. We are also transferring employees from operations to the major development projects, we are bringing in project personnel from ConocoPhillips in the US and other countries, and we are hiring personnel from contracting companies,” says Våge. 100-meter dash Although production rates are falling the North Sea is still home to a significant part of the world’s proved oil reserves. Steinar Våge’s faith in the North Sea is undiminished, and ConocoPhillips plans making one-fourth of its total global investments in the North Sea in the coming years. “Our strategic perspective is 50 years,” says Våge. This spring, ConocoPhillips was split into two companies, focusing on downstream and upstream, respectively.

ConocoPhillips is now a pure-play exploration and production company, which pleases Våge. “It is comparable with running a 100meter dash and 3,000 meters. You can be good at both, but you can never become the world champion at both,” says Våge. “Exploration and production requires us to be quick and nimble, doing things right – we must both find the oil and develop the fields. The industry is cyclical and more exposed to fluctuations than the downstream activities, which makes the risk correspondingly higher,” says Våge. He believes a lot of the success in Norway is due to ConocoPhillips always being on the look-out for improvement opportunities. “We have high standards and we always ask ourselves how we can improve,” says Våge. Environmental awareness The public debate concerning the environment and oil production often directs a critical eye at the oil companies. Steinar Våge appreciates the public discourse, and feels confident that ConocoPhillips’ activities are prudent. “Critical voices are good, but it is important to consider the facts and realities. The industry is both technologydriven and environmentally aware, and we have an intense focus on safe and environmentally prudent operations,” says Våge, who is also the chair of the Norwegian Oil Industry Association. “As a company, we are happy to communicate our operating model, which offers exciting technology and tasks. The majority of our value creation goes to the society at large, as taxes and fees,” says Våge. He believes that the company and the rest of the industry will continue to attract young talent for the foreseeable future. “If you appreciate diverse tasks, international career opportunities and working in an industry that powers the world, there are great opportunities for you in our industry for development and contributing to making a difference,” concludes Steinar Våge.

Steinar Våge, ConocoPhillips Europe President


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Exploration ConocoPhillips in the Baffin Bay

Greenland pioneers Acquisition of new 2D seismic and drilling of shallow wells for core samples are two of the activities which will be carried out in the Qamut exploration license on West Greenland this summer. There is only a two-month weather window, due to ice and environmental concerns.

EXPLORING ARCTIC WATERS: From the left: Peter Bormann, Niels Jørgen Ventzel, Chris Parry and Roy Leadholm.

Qamut

Norway Roy Leadholm

In December 2010, ConocoPhillips was granted operatorship of a 10,000 km2 block in Baffin Bay on West Greenland. This is the northernmost concession, and was a top priority in ConocoPhillips’ application. With the award comes an obligation to carry out an exploration program over four years. “Environmental studies and reprocessing of the 2D seismic have already been carried out,” says Roy Leadholm, manager, new exploration ventures, who heads the work on Greenland. “With this knowledge, we plan to drill the first wells and acquire 3,000 kilometers of new seismic data,” he adds. Ice-free window Baffin Bay usually becomes ice-free some time in July, but seismic and drilling operations are only possible during an icefree eight-week window in August and September. However, there is a steady stream of icebergs drifting southwards.

The seismic vessels can steer clear of possible icebergs. Satellite images, specialized ice-radar and visual inspections will be used to spot the ice. But this provides challenges relating to acquiring seismic data in a regular grid pattern. The drilling vessel has a positioning system and tailored drilling equipment which enables the vessel to move 30 meters in any direction. If this should prove insufficient, the crew can detach the drill string and move the vessel to avoid impact. Encouraging aspects There is little doubt there is oil on Greenland. The question is rather whether it will be found in good quality reservoirs and in sufficient volumes to be commercially viable. Other players have proved hydrocarbon shows further south, but the reservoir quality and volumes were insufficient. “One of the most encouraging aspects

Exploration department:

Looks to the north ConocoPhillips’ long-term engagement in the northern regions is one of the most exciting initiatives in the company’s international operations. “It hasn’t been difficult to sell the northern regions at the headquarters in Houston,” says Paul McCafferty. The enthusiastic Scot works out of Tananger, where he heads exploration operations in Norway, the UK and Greenland. He has worked in the company’s business units throughout the world and he is very optimistic about the northern regions. “ConocoPhillips has extensive and broad experience in exploration and drilling in the northern seas. We're big in Canada, we’re the biggest in Alaska, and we’re the player who has the most exploration experience in Greenland,” says McCafferty.

22nd round in the Barents Sea Exploration activities in northern areas require additional expertise and vigilance, which ConocoPhillips is in the best position to provide. The company has been present in the area for many years, and showed a very good understanding of both environmental conditions and the geology of the seabed during the granting of licences in the Barents Sea in the 21st licensing round. Now the company is in full swing with preparations for the 22nd round. “We’re in the midst of an evaluation phase in which we carry on a dialogue with all stakeholders,” says McCafferty. Among the challenges that must be

about West Greenland exploration is that there is abundant natural oil seepage from the subsurface in the area. These seeps have been found onshore and are also recognized offshore through satellite monitoring. Also, the sandstone reservoirs we are exploring for are well developed in

addressed are the high costs associated with the exploration drilling, and the long supply lines to the Barents Sea. In the event of production the distance to the markets will play an important role. “The advantage of the Barents Sea is that it is free of ice,” says McCafferty. Impressive Greenland ConocoPhillips’ licences off the west coast of Greenland are full of opportunities – and challenges. McCafferty believes it is crucial to understand the local conditions, both in terms of the environment and population, for those who wish to succeed in Greenland. “When I got off the plane on my first visit to Greenland, it was thirty degrees centigrades below zero. The scenery is dramatic, rugged and impressive. I was struck by the challenges and the respect that Greenland inspires,” McCafferty relates, emphasising that no one is better equipped than ConocoPhillips to involve all stakeholders in operations in Greenland. “I dare to say that our environmental

outcrops that have been mapped on Disko Island, further south,” says Leadholm. The exploration on Greenland is headed from the company’s office in Tananger. The Greenland team also has several global resources at their disposal from the corporate pool of arctic experts.

conscience and concern for the local population are far deeper than people back home are aware of. Exploration activities represent a joint effort between the population and the players on the shelf, whether we are talking about Norway, the UK or Greenland. The results will be that communities will be supplied with new resources, which also serves our company,” concludes Paul McCafferty.

Paul McCafferty


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Integrated operations The Norway drilling optimization center.

A look into the future ConocoPhillips is pioneering interaction between the onshore organization and offshore. The new operating model takes yet another step – into the future. “We use models that describe expected behavior of the systems and that thereby predict the future. This means we can be proactive,” says Ole Klingsheim, manager, integrated operations in ConocoPhillips. The models he is speaking of represent the

best within planning and maintenance of material and operations offshore. A key component is the “onshore reliability center” (ORC), one of the integrated operations centers at the company head offices in Tananger. The engineers

Ole Klingsheim

working at the center monitor and analyze the condition of the equipment on Ekofisk through a stream of signals. “You can compare the system with two ways of changing a light bulb. One approach is that you know how many thousand hours it is supposed to work and replace it well ahead of time, even if many of the bulbs will work longer. Alternatively, you find an indicator for every bulb that the lifespan is nearing its

end and replace it just before. That is predictive maintenance,” Klingsheim explains. “The blood circulation” The new operating model ensures the maintenance of the massive and heavy machinery that drives the operations at Ekofisk. The pump systems are powered by generators, which contain heavy rotating equipment. If these should stop,

Jonas Rydland


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Increased recovery

Tripled the recovery rate – wants more Every percent recovery increase from the Ekofisk field equals a medium-sized oil discovery – and significant added value.

“We want to get more from our existing fields, and our approach is still water injection, new technology and drilling new wells,” says Brage Sandstad, operations manager, ConocoPhillips in Norway. production would shut down. “These machines power all our functions – our blood circulation – out there,” Klingsheim says. If you are able to predict exactly when the various components must be replaced or maintained, you can coordinate operations, making the downtime as short as possible. So far, these predictions have yielded profit in contrast to regular intervals, which was how things were done before. “We’re moving towards a system which works better and better, at the same time as the safety performance keeps improving,” Klingsheim says. From data to knowledge Being predictive – seeing into the future – means interpreting a vast volume of signals that by themselves do not tell you what to do. These signals, or data, must first be collected and aggregated into information, which then form the basis for knowledge. This is ConocoPhillips´ big project – connecting several types of knowledge, communicating and interacting. The objective is better, safer and more efficient operations. “Competent employees in our various centers for integrated operations utilize technology that enables interaction and operations across disciplines and work locations, says Klingsheim. Acid test In January this year, the ORC and the new operating model had their acid test. During bad weather, a fire hydrant was

triggered at Eldfisk. When the facility was restarted, engineers on shore discovered that a bearing in a gas turbine was running warm. It was discovered that the fire hydrant had flushed the lube oil system with seawater, and the crew had to get new lube oil quickly and clean the saltwater from the system. During start-up of the gas turbine, it was discovered that the temperature in one of the bearings along the main shaft did not increase at the same rate as the circulation of the hot lube oil. “We had to stop the start-up of the machine, and we called our global expert on turbines in Houston,” says Jonas Rydland, who heads the center. They were referred to an employee in Darwin, Australia, who instructed the Eldfisk engineers how to enter the oil canals and use inspection tools. The global expert group then discovered that the most vital bearing had been damaged by the seawater and it was decided to replace the turbine. All bearings in the switchgear and all three compressors were checked at the same time, and they all had taken damage from being exposed to ‘impurities’. “By replacing the turbine, we avoided a breakdown of the entire compressor train, which would have caused a shutdown of several weeks,” Rydland says. The incident provided ConocoPhillips with a hint of how successful the new operating model can be. “We try to interpret the signs as early as possible in order to get a view of what awaits us around the corner,” Klingsheim says.

Since the start, more than 40 years ago, the total value creation from the Greater Ekofisk Area has been 1,858 billion Norwegian kroner (2011 value). Had the initial prognoses for the Ekofisk field been correct, only 17 percent of the hydrocarbons would have been produced. The current prognosis is 52 percent, and Brage Sandstad, ConocoPhillips’ operations manager in Norway, says that the goal is to increase recovery further. “In the 1970s, it was estimated that the Ekofisk field’s lifetime would be over in 2011, after 40 years of production. But on the very date of the 40th anniversary for the production start-up – 9 June 2011 − we celebrated that the Norwegian Brage Sandstad Parliament approved the Plans for development and operation (PDO) for Ekofisk South and Eldfisk II. We now have the foundation for another 40 years of production,” Sandstad says. The enthusiast from central Norway has worked for the company since 1978. He is head of operations in Norway, at the same time as ConocoPhillips is expanding heavily with new installations and undergoing a generational shift in its staff. Production rate from the 1980s Not everybody is aware of the sheer dimensions at Ekofisk. 4,000 people have the installations in the Greater Ekofisk Area as their work place. At any given time, around 1,300 employees and contractors are working offshore. They all arrive by helicopter from Sola, and Ekofisk has for many years been among the busiest “airports” in the country, based on the number of arrivals and departures. This says quite a bit about the activity level. Every day, more than 200,000 barrels of oil equivalent are produced from the fields in the Greater Ekofisk Area. An even greater volume of water is pumped into the reservoir. This water injection is the main reason why production remains high on Ekofisk. “Any reservoir will experience a drop in the production rate as oil is produced and natural pressure decreases. In the 1980s, the owners made a bold decision to start water injection in order to maintain the reservoir pressure. The result has been fantastic, and we have to go back to the 1980s to find a production rate as high as what we currently have,” Sandstad says. Norway’s largest industry project The development projects in the Greater Ekofisk Area represent capital investments of up to 83 billion Norwegian kroner (2011 value). The investments include drilling of several new wells and construction of new platforms and new infrastructure, as well as modification of existing platforms. “A lot of the job is to make good plans and have people work well together. At the same time, we need to produce with high regularity – and without unintended incidents,” Sandstad says. egian orw billion N be invested kroner to

Driving force ConocoPhillips is a driving force for interaction and integrated operations in the offshore industry. Brage Sandstad has for years pushed for closer cooperation between onshore and offshore – an effort that is now yielding results. ConocoPhillips has more than twenty centers for integrated operations, and focuses on interaction across disciplines, players and geography across the entire organization. “The basic principle of our operating model is that we need to work closer together, have better communication and a more efficient and safer operation in the North Sea. We create venues where we work together. Technology is a catalyst which enables us to do this. We’re fully focused on developing our operating model further,” Sandstad says.


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Recruiting

On the look out for new Over the next three years, ConocoPhillips is planning to recruit many new employees. Geology, geophysics, reservoirs and wells are key disciplines in the onshore organization. The company is also looking to recruit new offshore employees.

Hilde Motland

The activity level in the company is high as activities in connection with the Ekofisk operations and the major development projects are under way. In recent years, the number of Norwegian employees has been around 1,850. Few employees resign, but after 40 years of operation, an increasing number are reaching retirement age. In addition, employees go on international assignments and the internal job market is large. “This means that we constantly need new employees to fill positions,” says Hilde Motland, head of recruitment in ConocoPhillips. The recruitment department continuously works to select new employees in order to cover the human resources needs in coming years. “We’re planning on hiring around 170 employees this year and around 120 next year, before we level out at a slightly lower figure,” Motland says. These figures include recent graduates and apprentices for skilled workers positions. Four categories ConocoPhillips has four main categories of recruitment: Internal recruitment,

external experienced personnel, graduates from the universities and apprentices. “All available positions are advertised internally, so that employees get job rotation opportunities and new career options,” Motland says. Most positions are also advertised externally. This involves traditional newspaper advertisements as well as online advertising. The company also uses recruiting agencies – particularly for key positions. “Sometimes we need to go abroad to find what we’re looking for,” Motland says. When it comes to experienced workers, especially within certain technical disciplines, there is stiff competition between the companies. The external experienced personnel group has a few years of experience from the oil industry. Graduates are recent master’s degree candidates who are offered permanent positions in ConocoPhillips from day one, and who, over the course of one or two years, rotate between various departments before taking up a regular position. “We’re very pleased with the response; we had more than 900 applications for the 20 graduates positions last time around,” Motland says. Apprenticeships in the company are also popular − both onshore and offshore. Earlier this year, the company received 1,552 applications for 24 apprentice positions. Informal atmosphere ConocoPhillips is well-known for offering employees competitive terms, excellent career options and a culture characterized by an informal atmosphere and efficient cooperation. “Although a lot of people work here, we have a tradition of saying good morning to each other in the hallways,” Motland says. Office doors are open, and it is easy to contact colleagues – even across departments. On a professional level, people embrace the principles of collaboration and knowledge sharing. “Ability to cooperate and enthusiasm are qualities we look for in any candidate,” says Motland.

New employees in ConocoPhillips Over the next few years, the company plans to recruit 300 new employees. New employees are needed within the follow competence areas:

Onshore

Offshore

Geology Geophysics Reservoir Drilling and well service Process Mechanical Electro Instrumentation HSE Finance

Process Mechanical Electro Crane

of new number es e y lo emp

DEDICATED APPRENTICES AND MENTORS: Front from the left: Apprentices Bente Svåsand, Ruben Kristiansen, Knut Åne Svendsen, Eivind Lillestø and Espen Danielsen Rear from the left: Mentors Jim Jensen, Kolbein Midthun, Arve Steen Jacobsen and John Magne Nilsen


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Recruiting

employees Sylvain Ferro

Wants to contribute to technology development Sylvain Ferro from France sets high goals for his work, which is why he chose ConocoPhillips. clear visions and expectations for his job, which is why his interest was aroused when he met ConocoPhillips during the career days at university. “I came along for a screening interview for the graduate program, and was offered a job in Rogaland just after my exams,” he says. Cultural mix One of the first things Ferro noticed about ConocoPhillips was the company’s spirit, or l’esprit as he would say. “The company balances its culture of personal performance with Norwegian values such as solidarity and distribution of benefits,” says Ferro. He started his graduate period in the well optimization department, and has also worked in the department for partner-operated assets, which handles ConocoPhillips’ assets in important fields such as Alvheim, Oseberg, Troll, Visund, Huldra, Grane, Gimle and Heidrun. “After two years at the Norwegian University of Science and Technology (NTNU), I was ready to leave Norway again,” says Sylvain Ferro. The French 26year-old is a petroleum engineer and has

Great social life Although he is very focused on his work and profession, he finds time to play team handball and socialize with friends. When

he came to Rogaland last year, he knew noone. “ConocoPhillips really goes out of its way to make new arrivals to the region feel welcome and enable them to establish a social network,” Ferro says, smiling. He lauds the graduate group, which holds gettogethers with both social and professional focus. The company also has a special forum for young employees, where young professionals from all over the organization meet to exchange experience and raise their knowledge of the company. Wants to learn and contribute Ferro wants to specialize further in well technique – and he dreams of going abroad. He is also concerned with finding solutions to the challenges facing the industry. “Many at my age talk about environment, and in that context I am proud to say that I work for ConocoPhillips, who is very much aware of the challenge. I always think: How can we contribute?” says Ferro, replying to his own question: “Creativity, innovation and technology development will be of major importance.”

Dagny Håmsø

Attraction to action As a former tank commander, Dagny Håmsø likes her job to be challenging and fun. She found both at ConocoPhillips.

break horsepower and 45 tonnes at her fingertips, nothing could stop her when she led the way on new exciting missions. Graduate Today, her situation is exciting in a different way. Håmsø is one of 19 recent master’s degree graduates who earned a place in ConocoPhillips’s graduate program last year. After leaving the Army, she earned a degree in petroleum engineering from the University of Stavanger. “I was really excited about all the different things you can do in the oil industry,” she says.

Dagny Håmsø was a tank commander in the Army, operating a Leopard battle tank in Bardufoss, Troms County. With 850

Hands on As a graduate, you receive good follow-up and the opportunity to get to know various departments in the company. In May, Håmsø worked at the reservoir optimization department at the head office in Tanager. She enjoyed her time there, and later got the opportunity to work in the well intervention department. “I enjoy working hands on and getting things to happen, so this

suited me very well,” she says. She has also had a chance to “sneak offshore”, as she says. “The working environment on the platforms is just fantastic, everybody helps out, and you learn quickly by seeing things in practice,” Håmsø says. Personal involvement ConocoPhillips is always on the outlook for employees who are personally involved – also outside the job. During the graduate application process she realized that her potential employer was looking for a combination of many good things. “I have a wide-ranging background, with officer’s training from the Armed Forces, folk high school and various summer jobs. I’m also a support person for an autistic person,” she says. She has so many interests that she is unable to say what her dream position might be. “I’m a bit like a multi-tool, I love to learn a bit of everything,” Håmsø says, smiling.


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Redevelopment

The Ekofisk Complex, seen from the south-east – July 2012.

Redevelopment of the Greater Ekofisk Area On 9 June 2011, ConocoPhillips celebrated the 40th anniversary of the production start-up at Ekofisk. On the very same day, the Norwegian Parliament passed the plans for development and operations for the Ekofisk South and Eldfisk II projects.

ConocoPhillips’ ambition is to remain a key player on the Norwegian shelf in 2050. In the coming years, investments totaling around 83 billion Norwegian kroner will be made in the Greater Ekofisk Area. In addition to the Ekofisk South and Eldfisk II projects, a new accommodation and field center platform, Ekofisk 2/4 L, is being built. The projects also include modification of existing platforms and infrastructure. New pipelines are being laid and the drilling of many new wells will contribute to continued high value creation on Norway’s pioneering field in the North Sea.


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Redevelopment

Ekofisk 2/4 L

Ekofisk 2/4 L facts:

Illustration: Trainor AS

The new accommodation and field center platform is an important part of the renewal of the Ekofisk Complex and the area in general. The new platform will replace the existing accommodation platforms Ekofisk 2/4 H and 2/4 Q, as well as the chartered accommodation rig. With its 552 single-bedded cabins, Ekofisk 2/4 L will be the largest hotel platform in the North Sea. In addition to the accommodation module, the platform will house a number of field center functions and systems. It will be a regional telecommunication center, and will handle air and sea traffic control. The platform will also house offices, helicopter hangars, a hospital, a cafeteria and recreational areas. The platform will be equipped with free fall lifeboats and be the mustering area and preparedness center for search and rescue. Travel to and form the Ekofisk Complex will also go via Ekofisk 2/4 L. The jacket (built by Aker Verdal) and the bridges (built by the SMOE, Singapore) were installed on the field in June 2012. The topsides is currently being constructed by SMOE, and will be installed on Ekofisk in 2013.

Illustration: Trainor AS

– new “hotel” for the Ekofisk Complex

• Height: 110 meters (jacket) • + 60 meters (topsides). Helicopter deck in addition. • 552 beds, all in single cabins. • Office facilities. • Hospital, cafeteria and recreational areas. • Center for preparedness and safety functions, including fire water. • Two helicopter hangars. • Helicopter deck with a capacity of 50 departures and arrivals daily. • 10 free fall lifeboats, each with 70 seats. • Workshop and warehouse. • Interior floor space 15,000 m2. in beds, all bins single ca

Busy times for Norway Capital Projects ConocoPhillips’ Norway Capital Projects (NCP) organization is currently undertaking the construction, installation and handover to operations of three major projects to prepare the Greater Ekofisk Area for the future. The Ekofisk accommodation and field center project, the Ekofisk South Project and the Eldfisk II project all are large projects in the execution phase. In addition, extensive modifications are being carried out on existing facilities within the Greater Ekofisk Area. When I look at the portfolio of projects, there is a diverse set of locations where work is being carried out. For the Ekofisk accommodation and field center project, contracted work is being done in Norway, Singapore, Denmark and Finland. With the Ekofisk South and Eldfisk II projects, work is being done in Norway, Spain, Poland, Finland and India. One of our accomplishments is being able to attract highly skilled and motivated people. Teamwork is a must! The most important objective in all our activities is to safeguard the health and safety of our people, and I am proud of our ongoing safety commitment and performance on the various locations. Times are busy and the work challenging, but I’m pleased to say that we are on the right track to deliver the projects that we have in execution safely, predictably and competitively. We are focused on quality and delivering best-in-class performance.

John Devins Manager, Norway Capital Projects

Installation of the Ekofisk 2/4 L jacket and bridge support.


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Redevelopment wells to d be drille

Illustration: Trainor AS

Ekofisk South

Ekofisk 2/4 Z

The project includes the construction of the wellhead platform Ekofisk 2/4 Z, and the subsea facility Ekofisk 2/4 VB. A total of 44 new wells are to be drilled and a new water transport pipeline will be installed. The unique chalk reservoir forms the basis for the project. The purpose is to have more production wells enter operations and to expand the water injection capacity. This means we can maintain safe and stable production for a long time ahead. The jacket for Ekofisk 2/4 Z (built by Dragados in Cadiz, Spain) and bridge to connect the platform with the rest of the Ekofisk Complex will be installed in the summer of 2012. Pre-drilling of wells will commence once the 2/4 Z jacket has been installed and ready. The pre-drilling will be handled by a jack-up drilling rig. The topsides is being constructed by Aker Egersund and will be installed in 2013. Ekofisk 2/4 VB is located on the seabed three kilometers south of the Ekofisk Complex. Installation work started in the summer of 2012. Water injection will start in the first quarter of 2013. Ekofisk 2/4 Z jacket under construction in Cadiz, Spain.

Ekofisk South facts: • Increased production of 25 – 35 million Sm3 oil equivalent. • Wellhead platform Ekofisk 2/4 Z with 36 wells; 35 production wells and one for return of cuttings. • A 116-meter long bridge will connect the platform to the Ekofisk Complex. • Subsea facility Ekofisk 2/4 VB with eight water injection wells. • Electro-hydraulic and fiber optic control umbilical from the subsea facility Ekofisk 2/4 VA to Ekofisk 2/4 VB. This means that also Ekofisk 2/4 VB can be operated from shore. • A five-kilometer long pipeline for transport of injection water from the Eldfisk Complex to Ekofisk 2/4 VB. • Modifications of existing platforms to tie the new facilities to the existing facilities.

The Ekofisk 2/4 VB subsea water injection facility.


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Redevelopment

Eldfisk II The new pipeline going into the sea.

The project includes Eldfisk 2/7 S, a new integrated platform with wellhead and processing facilities, 40 new wells and 154 cabins. The platform will be connected to the Eldfisk Complex by a bridge. Other main elements include a new local equipment room, new pipelines, new electricity cable and umbilical, as well as extensive modifications to existing facilities and infrastructure. The purpose of the Eldfisk II project is to increase recovery rates and maintain safe and stable production, as well as continue operation of the remotely operated Embla field, tied in to Eldfisk via a pipeline. The project is a further development of infrastructure in an area that is already well developed, and which has been in continuous operation since 1979. The current Eldfisk field produces from 44 wells. Eldfisk II will increase the recovery rate from the Eldfisk field from 22 to 28.5 percent. The jacket for Eldfisk 2/7 S is under construction at Dragados in Cadiz, Spain, and will be ready to be shipped to the field in 2013. The topsides is being constructed by Aker Stord, and will be completed in 2014. The new equipment room for Eldfisk 2/7 A is being built by Aker Egersund and was installed in July 2012.

Pipelaying at the Eldfisk Complex.

The LER module (local equipment room) under construction in Egersund.

Eldfisk II facts: • Increased production 35-45 million Sm3 oil equivalent. • New platform 2/7 S with 40 wells, process facility and 154 beds, connected to 2/7 E via a bridge. • New oil and gas export pipelines, connection of a receiving pipeline from Embla 2/7 D and an external power cable. • Drilling of two new wells and conversion of Eldfisk 2/7 A to a wellhead platform, conversion of Eldfisk 2/7 FTP to a bridge and pipe support platform and upgrade of key systems on Eldfisk 2/7 B. • New local equipment room, LER, on Eldfisk 2/7 S. • Power and fiber optic cable for transmission of up 20 MW to Ekofisk 2/4 Z and Eldfisk 2/7 S. This will secure energy efficient flexibility between the fields in the Greater Ekofisk Area.

Eldfisk 2/7 S facts: • Accommodation module • Wellhead facility • Process facility • Central control room for the Eldfisk Complex • Treatment system for produced water • Workshop and warehouse • Power generator • Flare on new bridge support between Eldfisk 2/7 S and Eldfisk 2/7 E

new beds


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Suppliers

Eight of ten contracts to Norway

Providing growth for Norwegian suppliers

ConocoPhillips awarded contracts worth 36 billion kroner in 2011. 30 billion went to Norwegian suppliers.

Linjebygg Offshore in Molde has worked safely and efficiently offshore for ConocoPhillips for 20 years. This year, the two companies signed a new five-year contract.

“For most of our procurements, we have a broad international approach,” says Tove Nina Klemmetsrud, procurement manager in ConocoPhillips in Norway. According to last year’s figures the company, on average, spent 50 million Norwegian Tove Nina kroner every Klemmetsrud single day, a total of around 18 billion kroner, on goods and services from external suppliers. Of the 365 contracts awarded in 2011, 313 companies had a Norwegian postal address. This means that some of the sub deliveries may in turn come from other countries, but that the value benefits a Norwegian player which normally creates its value though Norwegian employees. “Norwegian players have won these contracts in stiff competition on equal terms with international players,” Klemmetsrud says. She believes part of the explanation why Norway does so well in this competition, is that Norwegian suppliers have adjusted to the needs of the oil industry and often lie at the forefront of the technological developments. 011 cts ntra in 2

co rded Joint efforts awa A typical contract with ConocoPhillips will last between three and five years. “We attempt to facilitate a win-win situation where the suppliers use their relationship and contracts with ConocoPhillips as a platform to develop new technology,” Klemmetsrud says. One example of this is down-hole technology, a major field continuously driven forwards through research and development. “The offshore technology develops just as fast as onshore. Many of our contracts are industrial joint ventures for technology, which we don't yet know if we can utilize. The companies need us to test this new technology, and we’re willing to make this effort together with them,” Klemmetsrud says.

Not just economics Any purchase of goods and services done by ConocoPhillips, is subject to strict regulations (based on EU’s procurement directive). This means that all suppliers must follow the same requirements for qualification, and everybody needs to receive the same information beforehand. “The competition is about more than just economic requirements. We also consider financial and technical criteria, and we assess safety and management systems,” Klemmetsrud explains. Part of ConocoPhillips’ vision is to expand the interaction model to also apply to suppliers. “Interaction across companies, disciplines and locations, is one of our success criteria, which we invite our suppliers to take part in,” Klemmetsrud says.

Hans Christian Myhre, ROV supervisor and Tor Gunnar, LBO supervisor monitoring the operation at Ekofisk.

Suppliers, who work safely, efficiently and contribute innovative solutions, create great value together with ConocoPhillips. One of them is Linjebygg Offshore (LBO), who did their first job on Ekofisk in 1991. The job was cutting away boat fenders in the platforms’ splash zone − a demanding assignment, also in terms of safety. In 2001, LBO was awarded a larger framework agreement for Ekofisk. This provided the basis for the company’s development to become the country’s largest player within offshore access technology. In 2012, LBO has 500 employees and a budgeted turnover of 700 million Norwegian kroner. “We specialize in difficult access and rigging without crane cover, and our engineers are experts on both designing solutions and methodology,” says Bernt Schjetne, department head for engineering services in LBO. Bigger than ever The tasks include access technique and associated tasks within design/engineering, offshore work and training on Ekofisk. The contract also provides options for the delivery of complete projects (EPCI). On average, the agreement will employ around 100 people annually, and the contract is one of the largest ever awarded for access technique on the Norwegian shelf. The Ekofisk contract has already caused LBO to open an office at Forus, outside Stavanger, to remain in contact with employees offshore. “We have daily meetings with offshore, regarding health, safety and the environment, and what happens in terms of the facility,” says Tormod Thorske, responsible for LBO’s operations at Ekofisk. New tools Over the 20-year partnership with ConocoPhillips on Ekofisk, LBO has developed several new tools to perform work in areas that appear to be inaccessible. These include a cofferdam solution, which is a sort of miniature ‘dry dock’ fastened to the constructions in the splash zone, enabling workers to work efficiently and safely in the zone. Other

innovations include remotely operated operations as well as operations at the highest point on the platform − the top of the flare stack. “The new contract was a confirmation of our good cooperation with ConocoPhillips, and it is important so that we can continue to develop efficient, safe and environmentally friendly solutions for projects on Ekofisk in the coming years,” says department head Tore Larssæther in LBO. Safety first Many employees in companies like LBO has background as mountaineers, which gives them a unique combination of technical skills and understandig of risk. “Linjebygg Offshore has a sound safety culture and proven safety record,” says Knut Olai Slettebø, in charge of managing the Knut Olai contract in ConocoPhillips. Slettebø All suppliers who are awarded a contract with ConocoPhillips have been through a tough bidding contest, proving that they are the top supplier within their field. The main criteria are safety, professional content and price. ConocoPhillips appoints three different committees who assess their area independent of the other two. LBO can boast zero serious incidents through its 20-year history with ConocoPhillips. “We have a good dialogue regarding safety issues. They also use people who are creative and proactive in their approach, and who notify us of unforeseen events and conditions,” Slettebø concludes.

Rune Rognskog (right) and Tor Gunnar Leren.

Linjebygg Offshore gets to the most inaccessible areas on offshore facilities.


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Suppliers Photo: Terje Aamodt


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Technology

The first intelligent wells on Ekofisk The first intelligent well in the Greater Ekofisk Area entered production this spring. The second came online this summer. These are the two first intelligent production and water injection wells where known technology is applied in a new way adapted to the chalk reservoirs in the area. “The results are encouraging,” project manager Steve Actis says. this is to develop wells that produce for longer and better. This is why new technology and processes are tested.

Drilling at Ekofisk 2/4 B.

The first well, Ekofisk 2/4 B09C, was completed using IWS - Intelligent Well Systems technology. At start-up, the well produced around 4,000 barrels oil per day. Testing the valves in the well was performed at a water depth of 3,000 meters, and production is good from the various zones. “We control the well from the platform’s control room in order to achieve the desired production from each zone. The IWS technology works well, and the experience we now gain will be used in the completion of the next well,” Actis says. The first test well was a full-scale test of the IWS technology in a cemented well, while the next applied completion technology in an uncemented well with production packers which divide the zones. Strategically important Ekofisk has produced for more than forty years, and investments in the future are now being made. “Technology that increases the recovery rate from the field, such as the IWS technology, creates significant value," says Per Pedersen, well planning director in ConocoPhillips. The paramount goal for ConocoPhillips is to secure stable production and increased recovery. One of the means to achieve

Intelligent well systems – IWS The IWS technology utilizes valves in the well which are controlled from the surface by using hydraulic lines. This means you can control the amount of water in the production wells, or where water is injected in to the water injection wells. IWS also incorporates pressure and temperature sensors at each valve, in order to monitor the flow in each zone. This way, you achieve improved control of the reservoir. IWS completion is mostly used in sandstone reservoirs. Applying this technology to chalk reservoirs is new, and carries with it some challenges in terms of well completion. As many as eight IWS valves can be used for long horizontal wells. The valves and well system has been tested up to 60 barrels per minute to demonstrate how robust the system is, both in stimulation and production.

Flexibility The advantage with intelligent wells is that process technicians can control the production in the various zones in the well. This means that the hydrocarbonproducing zones can remain open, while water-producing zones are closed. Controlling the water in the well is important in order to reduce costs and improve the oil production. The production zones can be moved to adapt to changes in the reservoir. This flexibility is especially important for long, horizontal wells, as many wells produce from multiple layers with different reservoir pressure. The IWS valves can also be closed during maintenance, which prevents flow between formations. This also increased the production stability. The right stimulation of production wells in chalk reservoirs is necessary. IWS technology enables selective stimulation of the zones in the well, which saves both time and costs. Since 1987, water injection has proven to be efficient in order to maintain high production, increasing recovery rates and controlling subsidence. The IWS equipment can also be used in wells for water injection in the same fashion as for oil producing wells. “Well design using the technology helps us improve our management of the reservoir. This means we can achieve a high production level and improved reservoir utilization. Improved control of water injection means both increased production, improved control of the reservoir pressure and better utilization of the resources in the area,” Pedersen says.

Willy Coffey (left) and Jesse J. Constantine inspecting the valves on the drill string.

Knowledge sharing ConocoPhillips in Norway is also developing new expertise with the IWS technology through a series of sessions for training and knowledge sharing. Participants include not just people from the completion environment, but also the disciplines supporting drilling and well activities. “We continue to optimize IWS completion, even outside of Ekofisk. We work to achieve higher production volumes and to manage the reservoir in the best possible manner,” Actis says.

From the driller’s cabin at Mærsk Innovator.

The reservoir

A long history

The Ekofisk reservoir is located three kilometers below the surface, at a water depth of between 70 and 75 meters. The reservoir itself is ten kilometers long and five kilometers wide. At its thickest, the reservoir is 300 meters. The Ekofisk field is the largest of eight fields in the Greater Ekofisk Area. Of these, four are currently in production. Ekofisk, Eldfisk and Tor are cretaceous reservoirs where hydrocarbons are tied to cretaceous particles. Embla is a sandstone reservoir in the ‘basement’, about a kilometer further down from the cretaceous fields. According to estimates from the Norwegian Petroleum Directorate, as of 31 December 2011, the Ekofisk field contains the largest remaining oil reserves on the Norwegian shelf, with 120.9 million Sm3.

More than 60 million years ago, the North Sea was a shallow sea with vast amounts of tiny animals covered by a thin cretaceous shell – coccoliths. These fell to the bottom as they died, and throughout millions of years they formed layers that are several hundred meters thick. Later they were covered by mud and shale, and they are now in the middle of the North Sea, more than 3,000 meters below the seabed. In the 1960s, few believed that the cretaceous reservoirs contained recoverable oil, but geologists now know that they can be valuable oil sources. The hydrocarbons are found in the tiny pockets in the limestone. Due to extensive cracks in the stone, the hydrocarbons can move between various zones, and this also enables us to recover the oil. The cretaceous reservoirs are, in other words, somewhat different from the sandstone reservoirs, where hydrocarbons are found ‘between’ the grains of sand. Sound knowledge about complex conditions deep down in the earth’s crust is needed to maintain a stable and high production level and to utilize available technology for the special properties found on Ekofisk.


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Safety

The PSI falcon made up of portraits of employees dedicated to personal safety involvement.

20/20 hindsight beforehand Personal safety involvement (PSI) works. The method has been an important contribution to the significant reduction in the number of undesirable incidents in ConocoPhillips.

– Yeah, I suppose it could happen, maybe. “Then you’re among the 15 percent of the population able to do so,” says Teddy Broadhurst, born and raised at Sola, with a three year break in Australia as a young man. Broadhurst is an enthusiastic leader of the PSI behavior concept. Using a simple method of questions and answers, the method has contributed to changing the mindset surrounding undesirable incidents. PSI entered use in 2004, and has been one of several important measures to significantly reduce incidents since.

Teddy Broadhurst

– Did you wear your safety belt driving here today? – Yeah, otherwise it’ll beep... – So, you’d get behind the wheel without the belt on if you didn’t get a warning?

A short talk The method remains the same onshore and offshore: Have a short talk with colleagues, or yourself, before starting the day or the task at hand. The talk is focused on identifying remaining risk that could be present. Broadhurst has a note card of PSI questions anybody can ask themselves: – How can you and others be injured? – What type of accident could occur? – How can you and others avoid getting injured? – What if something unexpected happens? – What have you done to prevent injuries to you and your colleagues?

Out of the offices After almost 40 years with the company, Broadhurst knows his stuff. For 25 years he worked as a process technician, offshore installation manager and head of operations on Ekofisk before “going onshore” and starting as a safety advisor in the health, safety and environment department. “We needed a way to get the managers out of their offices, to get them away from just sitting there, saying ‘safety first,” Broadhurst says. During a major safety conference in 2003, a working group was given the mandate to propose how ConocoPhillips could best achieve this. “In March, a year later, we got the acceptance and approval for PSI,” Broadhurst says. In late fall 2004, training started for company employees. Using professional actors and educators, everybody on the course was challenged to participate actively and voice their opinions. According to Broadhurst, all types of employees become enthusiastic. “During the full day course we have a maximum of 30 minutes of powerpoint presentation. The rest is participation though involvement, with a healthy dose of humor. The result is that people become aware, get their priorities straight and care about each other. When we get people personally involved, it works,” Broadhurst says. Zero vision The objective for PSI is to cut the number of undesirable incidents to zero. At the same time as the Norwegian and European parts of the company are using

PSI to come closer to the zero vision. Broadhurst travels the world to promote the PSI concept to staff and suppliers. “There is a massive interest in PSI, and several business units have started using the tool. I’m convinced that there will be even more,” Broadhurst says, who currently is in charge of HSE at the construction of the Ekofisk 2/4 L platform in Singapore. “The SMOE yard has implemented the program, and we’re now training workers in various languages, such as Tamil, Bengali, Malay and Chinese,” Broadhurst says. In Norway the yards at Stord, Egersund and Verdal have adopted PSI. Broadhurst believes the issues remain the same no matter where in the world you work. “For many, it is a challenge to talk about something else than the weather or what your plans are for your off period. Now we have people talking about safety, be they welders, crane operators, or process technicians,” Broadhurst says.

PSI – personal safety involvement Behavior-based safety measure focusing on each individual taking an active responsibility for their safety and that of others. Everybody is trained to ask basic questions before starting a job, such as “What if something unexpected happens?” or “How can you and others avoid being injured?”


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Tananger base

Ekofisk’s lifeline Every year, nearly 400,000 tonnes of goods are transported to the installations in the Greater Ekofisk Area. Everything is transported through ConocoPhillips’ base, which has been located at Tananger since 1973. structures or removing old ones,” says Jan Bjerga. The Tananger base covers around 50,000 square meters. In addition, it has a designated quay measuring 165 meters. The area is divided between quay area for loading and offloading, pipe storage as well as buildings with storage, workshops and terminals. Jan Bjerga

At any given time, there are about 1,2001,300 people working on the platforms in the Greater Ekofisk Area. “Everything they need – food and water, work clothes, diesel, drilling fluid, tools, material and equipment are shipped out using supply vessels,” says Jan Bjerga, director, base logistics. The base area was put to use almost 40 years ago. It became apparent early on that an efficient logistics organization is important in order to ensure that offshore employees always have the correct materials and equipment at the right time. “A minimum of four supply vessels ply the route between Tananger and the installations in the Greater Ekofisk Area. In addition, ConocoPhillips has had several special vessels that operate partially out of other bases and perform work within well maintenance, lifting new

Pioneers ConocoPhillips is a pioneer within Norwegian oil activity – also within the supply service. In the beginning, the supply vessels were significantly smaller than the current vessels. Continuous work has taken place since the start to steadily develop better and safer load carriers such as containers, baskets and chemical tanks. Investments are also being made in new and safer equipment, such as trucks, cranes and lifting gear. “This has resulted in very high safety standards on the base today,” Bjerga says. Digital world The future focus areas within logistics concern development of new digital systems for increased efficiency and even better safety in the logistics processes, while modernizing the supply fleet. An important contribution to the

Loading a supply vessel in Tananger.

development is the establishment of a 24/7 staffed logistics centre in Tananger. The centre is staffed by maritime personnel. The employees are in continuous contact with the vessels and installations, with primary emphasis on monitoring and following up maritime traffic. Safety Despite all the modern technology, ConocoPhillips is very aware that a good logistics chain is always dependent on skilled and motivated employees who know what it takes. “Our first priority is always the personnel safety. This has been, and will always be, the core value we give the highest priority,” logistics manager Kjell Hveding says.

Tonnes of freight to Ekofisk • Approximately 400,000 tonnes are shipped to the field each year. This is equal to the weight of Norway’s entire population, or the weight of 300,000 cars. • On average, there is one departure from Tananger base to the Greater Ekofisk Area each day – 360 departures a year. • The vessels travel a total of 120,000 nautical miles per year. This corresponds to more than 220,000 kilometers or 4.5 times around the earth. • Each vessel takes about four and a half days for a round trip from the Tananger base – Ekofisk. It takes about 16 hours to sail to the Greater Ekofisk Area. • 70,000 lifts are carried out annually at the base area, i.e. one lift every three minutes during working hours.

Supply vessels at ConocoPhillips’ Tananger quay.

tonnes to shipped Ekofisk r each yea


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Tananger base Coordinates shipping traffic from land The logistics centre at ConocoPhillips’ main office in Tananger – the ’onshore logistics centre’ (OLC) – is open 24/7 for managing and coordinating the maritime traffic in the Greater Ekofisk Area.

Paal F. Bjåstad

Every vessel that carries out assignments in the Greater Ekofisk Area is followed up and coordinated from the logistics centre in Tananger, in close dialogue with the offshore radar service. Daily departures The centre receives daily requests for what the installations want and need. These needs must then be met within the deadlines and plans set. Implementing the sailing schedules for the various platforms is the top priority. “Therefore, it is like a giant puzzle to put together all the needs for efficient, safe and environmentally friendly sailing schedules,” says Paal F. Bjåstad, director, marine logistics.

Marine expertise The logistics centre is staffed by seven employees working shifts − as well as support functions. Most have marine backgrounds as officers on supply vessels and anchor handling vessels. “This means that they are very familiar with the situations and dynamics on board the vessels, at the same time as it increases the understanding of the possibilities and limitations of the resources,” Bjåstad explains. “24/7 onshore support contributes to us on board the supply fleet working more efficiently and communicating better. We avoid misunderstandings, and there is less downtime,” explains captain Kim Sekkingstad on board Skandi Kvitsøy. Coordination tool A lot of work and energy have been invested in tool and expertise development to achieve the best possible overview and systems. Tools for 3D displays of traffic in real time, such as Vispo, handle both monitoring, planning and communication for transport to and from the installations. “We have a good overview of all the vessels at all times, with the position, speed, course and capacity. This provides us with a better understanding of the marine scenario on the field. This helps facilitate improved safety. In addition, we can plan the cargoes centrally onshore and thus utilize capacity in the best manner possible,” Bjåstad concludes.

Skilled sailors – great ships “It’s all about the people,” says Tor Ståle Moen, director, chartering and compliance logistics. vessels, seismic vessels and vessels for subsea operations with their special assignments in the area. “During the course of a year, there could be around 100 different vessels that serve Ekofisk,” says Moen.

Tor Ståle Moen

“We are satisfied with having a modern fleet with environmentally friendly and efficient ships that serve the fields. But it is the skilled sailors who provide good safety and high regularity,” Moen ensures. Normally, four vessels serve the field with daily departures from Tananger. In addition, the company can employ an additional vessel or more during periods with extra high activity. ConocoPhillips also has up to four standby vessels in the Greater Ekofisk Area. These vessels handle preparedness tasks and are specially equipped for search and rescue, fire extinguishing and oil spill response. They also carry out some shipping assignments between the installations and serve as temporary storage space, when needed.

Unloading cargo at the Ekofisk Complex.

High activity During periods with complicated offshore tasks, such as installation of jackets and bridge supports, there will be project vessels, lifting vessels, special vessels, barges and tugboats in addition. At the same time, there could be well stimulation

Modernization During the last two years, ConocoPhillips has carried out a considerable modernization of the supply fleet. “We have entered into new agreements with ship owners to ensure that we have modern and environmentally friendly supply vessels, which are also attractive to the sailors in a tight labor market,” Moen says. All of the supply vessels have Scandinavian crews and sail under the Norwegian flag. The newly contracted ships have about the same capacity with about 1,000 square meter loading decks. At the same time, the company’s supply service ranks near the top as regards utilization of capacity. “But high regularity is the most important aspect, with daily departures from Tananger, enabling us to deliver what the installations need when they need it,” Moen says. Environmental benefits A modern fleet with energy-efficient engines, along with a sailing schedule which is set up to ensure high environmental standards, reap benefits. “So far, we see that modern ships can reduce fuel consumption by about 20 percent. Together with other emission-reducing measures, such as NOX cleaning, the modernization contributes to an important environmental benefit,” Moen says.


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Teesside terminal

Teesside –“the upstream Every day, more than 400,000 barrels of oil equivalent arrive from Ekofisk and other fields in the Norwegian and British parts of the North Sea at the Teesside terminal – non-stop! at the Seal Sands quays every other day. It can take up to 24 hours to fill the largest of the tankers with crude. The number of NGL vessels is even higher, with around 300 calls each year to export NGL products.

life extension program since 2006. In project engineering parlance this is truly ‘brown’ field work that comes with all the challenges of working in and around a producing asset. Oil fractionation units are being overhauled; gas turbines and compressors have been taken back to ‘zero hours’ conditions and enhanced with new technology; crude, cryogenic NGL and effluent tanks are being refurbished and reinstrumented; NGL columns, heat exchangers and pumps are being refurbished; gas treaters and the full site control system replaced – to name just a few of the activities. Due to the high activity level, the

Teesside terminal now has the highest number ever of personnel working there. Currently, ConocoPhillips has 300 staff at the site. In addition, there are more than 500 contractors in connection with maintenance services. “It is busy times, as we are preparing for the future,” Nick Lee says. “We’re looking forward to many more years of operation. Completing the work safely while staying online is a challenge. Success depends on our employees’ renowned professionalism and ingenuity. You can trust the Teesside terminal,” he concludes.

TEESSIDE TERMINAL Receiving spheres (4) Greatham Crude Storage (10) Stabilization trains (6)

NGL plant

Jetties for loading (7)

NORPIPE Receiving Norway and UK oil production spheres (4)

FACTS

Stabilised crude storage tanks (10)

Located at Seal Sands In operation since 1975 Receives more than 400,000 barrels per day of unstabilised crude oil Capacity of 800,000 barrels per day 800 people work on site Part of the Norway business unit

Ethane storage Propane storage

Butane splitter (1)

Cleaning processes

CATS Propane C4 Mixed C4

De-propaniser towers (2)

PROCESS

De-mathaniser tower (1)

Methane for plant fuel

De-ethanizer towers (2)

50 percent In 2011, the terminal received 121.5 million barrels of oil equivalent. This equals around 50 percent of the total capacity of the pipeline system. The decrease is mainly due to the oil fields maturing. In addition to the production from the Greater Ekofisk Area, the terminal at Seal Sands also receives oil and NGL from ConocoPhillips’ own fields and fields operated by others on the Norwegian and British shelves: Valhall, Hod, Ula, Tambar, Blane and Gyda (Norway) and the J-Block (Judy/Joanne), Jade, Fulmar, Auk, Orion, Clyde, Gannet AG, Halley, Janice and Affleck (the UK). It is expected that production will increase towards 500,000 barrels per day in coming years due to ConocoPhillips’ development of the Jasmine field in the UK and the further development of Ekofisk and Eldfisk, as well as BP’s Valhall field and new thirdparty fields. The stabilized crude is stored in ten gigantic tanks, with a storage capacity of 750,000 barrels each, before being exported. On average, one oil tanker docks

Teesside central control room. In the foreground are Ross McMillan (left) and Kevan Hunter.

Stabilization trains (6)

The terminal at Seal Sands on England’s north-east coast has been at the receiving end of the 356-kilometer long pipeline from Ekofisk since 1975. Crude and NGL (natural gas liquids) are desalted, fractioned and polished before the stabilized crude and NGL products are stored and exported around the world. The terminal has a capacity to receive as much as 800,000 barrels of oil equivalent from around 20 fields in the Norwegian and British parts in the North Sea – almost one percent of global daily production. Nick Lee, general manager at Teesside, says that Ekofisk and Teesside have been inextricably linked since the terminal opened 37 years ago. “Our business exists because of Ekofisk, and Ekofisk Nick Lee continues to deliver because of the services we provide,” he says. The plant was originally built to operate for a nominal 25 years. “We’re now looking forward, and we’re in the middle of a major investment program,” he adds.

High level of activity “2012 has the most extensive work program ever at the terminal since the plant was completed,” Lee says. Several hundred people perform inspection and maintenance work. Major projects include overhauling and upgrading the NGL facility and the storage tanks for the next 20 to 40 years. The facility still has some equipment dating back to 1975. As always, the question is whether to extend the design life or if the equipment is to be renewed or replaced with something different. The Teesside terminal is about halfway through a ten year plus program to set up the facilities to take business towards 2050. Employees have been busy with the

Loading ISO-butane storage

Normal butane storage

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Community relations Learning to ski in Sirdal.

refinery” Geoff Marsden (left) with Anthony Healey.

Connecting Tananger and Teesside For 25 years, lower secondary school pupils have crossed the North Sea to forge friendships and learn about each other’s cultures.

0 0 8

es employe on site

TANANGER/TEESSIDE: “The English pupils always come here in February, so we bus them to Sirdal valley to take them skiing – cross-country style! Most of them have never had skis on their feet,” says Jon Pettersen, vice principal at Tananger lower secondary school and in charge of the exchange program with the Northfield School in the Teesside area in north-eastern England. The exchange is supported by ConocoPhillips, which has major activities on both sides of the North Sea. The operations in the Greater Ekofisk Area are managed from Tananger, while oil and natural gas liquids are received at the terminal in Teesside. This means that many families in both areas have the same employer. “Our task is to create lasting cultural and linguistic contact, independently of what ConocoPhillips means to people in Tananger and Teesside,” Pettersen says.

host families organize a social event for all the exchange pupils. During the day, they take part in regular lessons as well as doing project work at school. Two teachers travel with them, and spend part of their time gaining insight into the British school system. “The Northfield School is a popular school with 1,800 pupils, and it is very far ahead in terms of natural sciences, technology/design and drama,” Pettersen says.

Friends for life The close partnership between the two lower secondary schools started in 1987, after an initiative by Phillips Petroleum Company. One teacher from each school met to lay the foundations for the program, and this tradition is kept alive by teachers from the schools meeting each year to plan the next exchange. In addition to having a go at crosscountry skiing in Sirdal valley and ice Staying with families skating in Siddishallen, the English pupils Every year, eight students from eighth form also take part in Norwegian folk dance at the Tananger lower secondary school are lessons and cooking. This year, the students selected to travel to the Teesside area for a also visited the Norwegian Oil Museum in week. The trip is in June, but the selection Stavanger and the Science Centre in process stars the previous fall. The Sandnes. competition is very popular among the The friendship between pupils in pupils, who must write a personal Northfield and Tananger go back as long as application in English with information regarding their interests and hobbies, friends the exchange agreement itself. Many of those that met as pupils 20 or 25 years ago and family. The applicant must also explain still visit each other. why she or he would benefit from traveling “Both teachers and pupils have forged abroad. close friendships that have resulted in trips During their visit to England, the Tananger pupils stay with the families of the across the North Sea for baptisms, weddings, as well as big birthdays, when English exchange students who visited Norway earlier in the year. Each evening, the someone turns 50 or 60,” Pettersen says.

Pupil exchange Norway-England Each year, eight pupils from Northfield School in Billingham and eight pupils from Tananger travel to each other’s country for a one week exchange. The program is sponsored by ConocoPhillips in Norway. The business unit which is managed from the Tananger office and includes operations in the Greater Ekofisk Area and the Teesside Terminal in north-eastern England.


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Research & development

Investing in northern areas research program One third of ConocoPhillips’ global production takes place north of the Arctic Circle. The company’s arctic research program provides knowledge regarding everything from arctic geology to marine eco-systems and glaciers. activities around Greenland, in the Barents Sea and the Chukchi Sea between Alaska and Russia. The common denominator for these areas is that they contain, or are expected to contain, oil and gas reserves. “Through research we gain better knowledge of the environmental aspects of activity in these areas. This enables us to recover these resources,” Lindefjeld says.

Ole Lindefjell

“There are vast amounts of oil and gas in areas where we so far have lacked the technical solutions in order to recover these resources,” says Ole Lindefjeld. He is in charge of ConocoPhillips’ research and development portfolio in Norway, which includes everything from operating challenges to basic scientific research. Between 2005 and 2011, the company spent 50 million Norwegian kroner on research through an arctic environmental program. Last year, this program was replaced by the new northern areas initiative – with a total frame of 130 million kroner. ConocoPhillips’ arctic venture comprises oil and gas fields in Alaska, Northern Canada and Russia. The company is also involved in exploration

More than 40 applications Last year, ConocoPhillips invited a broad spectrum of research environments to develop and present arctic issues. The challenges resulted in more than 40 project applications ranging from geology to nano technology. Initially, 11 projects received funding. Five of these are headed from UNIS, the University Center at Svalbard. “The program is very much focused on geology, but we have also funded projects on marine eco systems, glacial calving, micro organisms, communications infrastructure and nano particles to prevent icing of platforms,” Lindefjeld says. One of the projects will look into the energy transport from the sun through the outer section of the atmosphere. “This is an exciting project with a significant portion of basic scientific research. It will provide information regarding the impact of solar energy on the atmosphere and global climate,” Lindefjeld says. The results from the project will also contribute to more accurate GPS systems in the Arctic.

ARCTIC RESEARCH: ConocoPhillips wants to increase knowledge to strengthen sound exploration and production activities in the northern areas.

Sharing the knowledge The research program will yield knowledge about issues that have not been subject to research before. This is part of ConocoPhillips’ motivation – bringing facts into the discussion on energy resources in vulnerable areas north of the Arctic Circle. A third of the company’s oil and gas production is from the northern areas. “As long as no one can present facts, there’s a free for all in terms of making statements. This is why we want to be proactive and obtain factual knowledge on important issues,” Lindefjeld says. When the results are ready within the coming three to four years, researchers will publish their findings in scientific publications. The knowledge is then made available to everybody. ConocoPhillips encourages research environments to cooperate with other researchers and funding institutions to increase our knowledge of the Arctic.

ConocoPhillips’ arctic research program Research and development program with a framework of 130 million Norwegian kroner for the period from 2012 to 2016. Seeks answers to operating issues and environmental uncertainty. Four focus areas: • The hydrocarbon potential in the Barents Sea. • Operating aspects in the northern areas. • Biological patterns as well as environmental impact on glaciers. • Energy transport from the sun. Participating research environments include the University at Svalbard (UNIS), Akvaplan Niva, SINTEF, MARINTEK, Teknova and International Research Institute of Stavanger (IRIS).


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Corporate Headquartered in Houston, Texas, ConocoPhillips has operations and activities in 30 countries and approximately 16,500 employees as of June 30, 2012. Production averaged 1.59 million BOE per day for the six months ended June 30, 2012, and proved reserves were 8.4 billion BOE as of Dec. 31, 2011. The European activities are headed from the regional office in Stavanger, Norway.

ConocoPhillips’ headquarters in Houston, Texas.

ConocoPhillips – a leading energy company On 1 May 2012, ConocoPhillips carried out a repositioning of the company. The “new” ConocoPhillips is a pure-play upstream company – while the downstream business continues in a new company named Phillips 66. ConocoPhillips is today one of the world’s largest independent exploration and production companies. The size and scope of the company enables it to successfully compete across the world. ConocoPhillips produces oil and gas from legacy assets in

North America, Europe, Asia and Australia. In addition, the company has an increased focus on production from shale and oil sands in North America, many international development projects and a global exploration program in its portfolio.

The company benefits from more than a century of experience. It has a presence and capability in key technology-driven resource opportunities globally. Among these are conventional and unconventional reservoirs, oil sands and heavy-oil deposits, liquefied natural gas, and deepwater and Arctic operations. When the company now continues to build on its current strong position, the vision is to continue to be a pioneer for a new standard of excellence in exploration and production.

ConocoPhillips has always placed health, safety and environmental stewardship first. In addition, the company has an unprecedented opportunity to unlock potential by combining experience, asset base, technical capability and financial capacity with the focus and culture of an independent company. This enables us to create value for all stakeholders, and deliver a compelling formula of profitable growth, strong financial returns and a sector-leading dividend.


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Community relations

INSPIRATION: Students from Sandnes Upper Secondary School visited ConocoPhillips this spring. From left: Ingrid Wik Hallaråker, Jette Ås Harbo, Kristian Rosland, Knut Erland, Anders Svihus, science department head Bente Espedal and Marie Wik Skadberg.

Visiting to learn about science Seeing how ConocoPhillips works has made it easier for many young students to choose the sciences.

Bente Espedal

Every year, ConocoPhillips invites science students from Sandnes Upper Secondary School to come and see how the company works. They get to meet recent graduates who tell them about their own educational choices, and what it is like to work in a major operating company. During the fall term, geo subject students in their second year come to learn what geologists and geo physicists do and what tools they use, and in the spring, physics students in their final year visit to be inspired to take further science education. In Tananger, the pupils get a little taste of drilling and well planning at the company’s onshore drilling centre. “Technology and software programming are changing fast, and we receive students from secondary schools and universities to show them how the disciplines develop,” says Henning Lillejord. He is the IT project lead behind some of the computer tools used for ConocoPhillips’ integrated operations.

More understanding This spring, Jette Ås Harbo and her fellow pupils who take geo subjects visited ConocoPhillips. The visit and a demonstration there whetted her appetite for the subject. “Through geology I’ve gained a greater understanding of how the earth works, and how rocks can contain energy sources,” says Jette Ås Harbo. The visit to Tananger inspired her to continue to study geology. “The subject tells us a lot about renewable energy sources, climate and natural phenomena, so that we can understand how landscapes were formed,” she says. Means more science The six students we met at Sandnes Upper Secondary School right before summer vacation, have physics and mathematics among their subjects, in addition to geo subjects, chemistry, IT and English. Kristian Rosland studies third level physics and he was very interested in the connection between land and offshore facilities ahead of the visit to Tananger. “I thought it was very relevant to see the working environment, the data resources, the equipment and the connection between land and the platforms in the North Sea,” he says. According to Bente Espedal, who heads the science department at the school, the company visits have a major influence on what the pupils decide to study later. “We’ve carried out surveys afterwards,

OPTING FOR THE SCIENCES: From left: Kristian Rosland, Jette Ås Harbo, Ingrid Wik Hallaråker, Knut Erland, Marie Wik Skadberg and Anders Svihus have visited ConocoPhillips and become more sure they want to study the sciences.

and 80-90 percent of the final year pupils respond that the visit influenced their choice to study sciences after upper secondary school,” says Bente Espedal. IT, physics and electro Marie Wik Skadberg is studying third level physics. She also does maths and English. “My plan is to either become a drilling engineer or do my master’s in energy and environment at the Norwegian University of Science and Technology (NTNU). ConocoPhillips is definitely a place I could see myself working in the future,” Marie Wik Skadberg says after the visit. “It was great to see how the oil industry is run, and my visit to ConocoPhillips made me even surer about the education I have chosen,” says Knut Erland, who does IT subjects and physics. His plan is to become an electrical engineer. Anders Svihus does geo subjects and chemistry in addition to maths and physics.

His plan is to become a petroleum engineer. “My impression after the visit is that ConocoPhillips is an exciting place to work,” Svihus says.

School and student visits Sandnes Upper Secondary School and ConocoPhillips have for many years been cooperating to provide students with a greater insight into working life. The goal is to help them make better and more realistic choices concerning education and careers. The students who visit ConocoPhillips’ head office at Tananger each fall and spring get to see integrated operations in practice at the company’s drilling centre, which is open 24/7. Between 80 and 90 percent of the students say that the visit influences their choice of education. The company also receives engineering students from the University of Stavanger, among others.


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Spreading joy Happy musicians outside the ConocoPhillips office.

The band marches on ConocoPhillips has its very own marching band. It is a very popular part of Stavanger’s Constitution Day parade – and helps spread the joy through its performances.

“Our conductor is very good, and the level is high enough so that we sound good, and we can be very proud of ourselves,” says Arild Kleven and Hildegunn Landa.

Hildegunn Landa is a geophysicist and works as a well planner in ConocoPhillips in Tananger. She also plays the baritone saxophone in the company’s very own marching band, a band with wood players, brass players and percussion. She joined the band after her first Christmas in ConocoPhillips, after hearing the band playing carols in the reception area on 23 December. “I’ve been in marching bands since my school days, so I got in touch, and I didn’t even have to audition to join,” Landa says. The ConocoPhillips Janissary Band started 30 years ago as a social activity for the employees and their families. As it turned out, the company was teeming with musical talent and enthusiasm. Band practices usually see between 15 and 25 people turn up.

Seminars and concerts When the ConocoPhillips Janissary Band plays in public, the members and the conductor dress in ‘uniform’; orange boiler suits and white helmets with the company name and logo. These special uniforms attract a lot of attention during the Constitution Day parade in Stavanger. “We’re very visible, and when I talk about the band in other situations, it is enough to say that we’re the ones that play

Want more “Anybody who has played in a school marching band is welcome to join. We can help out with instruments,” says trumpet player and offshore installation manager Arild Kleven. He has been in the band for almost 23 years, and has no plans to quit. He is not unique in this. In fact, three of the current members have been in the band since its inception in 1981. Others have continued to play in the ConocoPhillips janissary band after retiring or leaving the company. “The band members are almost more loyal to the band than to their employer,” jokes Kleven.

Their repertoire includes everything from marches and film scores to pieces composed especially for this sort of band. During our visit to a Tuesday practice session before the summer, we were treated to a perfect play-through of the theme from Copacabana, conducted in style by Geir Illguth. The instruments were tuba, percussion, xylophone, a few clarinets, trombone, saxophone, horn and trumpets.

in boiler suits on Constitution Day. People instantly know who we are,” Hildegunn Landa says with a smile. Last year, the band traveled to Riga, Latvia, where they played in the Old City. Every year, the band has two seminar weekends, and in-between they perform during celebrations and anniversaries. During the 30th anniversary of the Alexander L. Kielland disaster, the band played Spring by Edvard Grieg, a performance which was warmly received. “The ConocoPhillips Janissary Band has many functions in our company, and we are very pleased to help promote the company in such a positive manner,” says Kleven.

The ConocoPhillips Janissary band playing outside the Norwegian oil museum in Stavanger.


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Pioner - CP 2012