How the Norwegian Service Industry was developed -Competence and Capacity Sjur E Bratland Regional Director, INTSOK, Norway

Willy H Olsen

www.intsok.com

The presentation

1. What were the instruments used?

Policies, legislation and external factors 2. The role of people, technology, research and development 3. Where is Norway today?

Willy H Olsen

Legislation approved before oil was found

The Petroleum Law is the foundation

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The petroleum resources shall be managed with a long term perspective The whole society shall benefit from the resources Resources shall be managed to secure revenues to the country Oil and gas shall contribute to welfare, employment, improved environment and industrial development Take care of regional interests

We wanted to develop a oil and gas service industry

Source: The Petroleum Law of 1965 – paragraph 1A

Policies were adapted to national traditions Sharing of technology and creating a local working environment

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The government worked deliberately to Norwegianize the oil sector US and French domination in the first decade Labour relations were built on strong trade union influence Worked in favour of domestic firms relative to foreign firms

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But did not jeopardize economic efficiency

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Ownership no issue Environmental friendly – take care of the resources The Ministry monitored the tendering process and bid evaluations Norwegian based firm got early access to all tendering information

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Using Norway’s competitive advantages

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Harsh environment - taking care of the environment Deep water Technological challenging Expensive labor cost 1.

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Innovative an risk willingness Established yards could convert to oil and gas industry Willing to use the Norwegian continental shelf as a test bench Deep fjords allowed building of concrete substructures

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Cornerstone in developing the Norwegian Oil industry Predictability – Risk reducing BP production mill b/d oe

Source: BP • •

Established a competitive and transparent environment

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Concession rounds every year, based on nomination from oil companies

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Ownership not important

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Today 60 active oil companies – many independents

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A lot of the service industry are owned by non Norwegian companies External factors worked in the favour of Norway

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IOCs were looking for new opportunities after the nationalisation

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Quite willing to accept tough terms

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Transfer of knowledge and experience to Norwegian firms

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Stick and the carrot used

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Taxpaying oil workers in every community

More than 1300 companies

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But clusters established

Maritime R&D Willy H Olsen Operators Drilling Subsea

Have to follow EU rules and regulations

No preference to Norwegian firms

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Norway joined the European Economic Area Had to introduce EU regulations The legislation from 1972 on in-country value had to be scrapped Legislation is based on competition as the key principle

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Predictability, transparency, traceability

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Prohibited to discriminate on the basis of nationality and to use standards and specifications to obstruct competition Infant industry argument no longer applicable

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The government stimulated technology partnership

Fiscal incentives and financial support

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Universities and R&D centers

The tax system made fields into laboratories

Testing and verifying new solutions

Troll Oil Kristin Tyrihans Tordis IOR Tapping a thin oil layer Drilling systems Advanced software High pressure High temperature Advanced wells Record long pipeline heating Subsea raw seawater injection

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Subsea separation boosting and injection system

Government top priority - EOR

Squeeze out the last barrel adds value

Revitalizing and extending the life of the Ekofisk field The initial plan

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The Ekofisk field, Norway’s first oil field, began production in 1971 Was hoping for 20% recovery ConocoPhillips is now aiming for 50% Field life extended to 2050 Norway’s average recovery factor is now close to 50% The government aim is 55% Huge R&D program to succeed 1%-point increase in recovery represents $35 billion in additional revenues to Norway

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Statoil is the dominating player - operating 80% of new projects The CEO will always be under pressure to add in country value

INTSOK was a new government initiative

Stimulating international growth

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60 40 20 0 120 100 80 180 160 140

Total Oil & Gas Expenditure for 2012-2015

Source: INTSOK Annual Market Report - Rystad Energy (2011)

Norwegian Oil & Gas ”World-class” Clusters

Catalogue presenting Norway’s world class capabilities

Minimizing discharges and emissions

Solutions for cleaner production

Capabilities in the Norwegian oil and gas industry for reducing energy consumption and minimizing discharges and emissions

Catalogue presenting industry’s IOR capabilities

Delivering increased oil recovery

Solutions for increased recovery

Capabilities in the Norwegian oil and gas industry for solutions that can increase oil recovery

Rogaland Training & Education Centre

“- Local skilled workers are the fundament for local content” Certified provider to the Oil & Gas sector in Norway and Denmark Achilles ID # 26088

Regional development Colleges Companies RKK

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Samples of content skills training for the Oil & Gas sector

Training and continuing education for the offshore and mechanical industry:

Subject areas: RKK Oil & Gas

Rules & regulations Health, environment and safety Economics and management Petroleum technology Drilling and well technology Automation Electro and electronics Heating, ventilation and sanitation Valve technology Mechanical processes Pressure testing  Hydraulics and pneumatics  Scaffolding and rigging  Surface treatment  Welding and plating  Flanges and gaskets  Isolation and casing  Chemistry and processes  Materials administration  Sub sea technology  Instrumentation  Safety and emergency preparedness  Navigation Certified provider to the Oil & Gas sector in Norway and Denmark Achilles ID # 26088

Kvaerner Caspian -Vision

Vision Create a top class Kazakhstani contracting company through technology transfer and training of employees.

Execution of Oil & Gas projects with the maximum possible workload ‘inside’ Kazakhstan 21 • • • • Kvaerner Caspian Group is jointly owned by KGNT and Kvaerner AS This is a true Kazakh company - Shareholding and Board representation are equal Initial activities are targeted towards fabrication and engineering Kvaerner Caspian aims to be the first full fledged EPC offshore contractor in the Caspian Region © Kvaerner 2011 24.04.2020

Kvaerner Caspian -Capabilities

• • • • Kvaerner Caspian’s business model is to deliver Offshore EPC Contracts. This is achieved through the following capabilities: Fabrication – Kvaerner Caspian currently building a new offshore module fabrication yard in Aktau. Engineering – Kvaerner Caspian have engineering offices in Atyrau and Aktau. Training – Kvaerner Caspian is the largest shareholder in the Aktau Training Centre (ATC) - be closely associated with the Aktau fabrication yard 22 © Kvaerner 2011 24.04.2020

Thank you for your attention

Looking forward to the B2B meetings