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www.intsok.com

How the Norwegian Service Industry was developed-Competence and Capacity

Sjur E BratlandRegional Director, INTSOK, Norway

Willy H Olsen

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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

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Legislation approved before oil was found

The Petroleum Law is the foundation

1. The petroleum resources shall be managed with a longterm perspective

2. The whole society shall benefit from the resources3. Resources shall be managed to secure revenues to the

country4. Oil and gas shall contribute to welfare, employment,

improved environment and industrial development5. Take care of regional interests

We wanted to develop a oil and gas service industry

Source: The Petroleum Law of 1965 paragraph 1A

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

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

But did not jeopardize economic efficiency

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

Willy H Olsen

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Using Norways competitive advantages

1. Harsh environment - taking careof the environment

2. Deep water3. Technological challenging4. Expensive labor cost

1. Innovative an risk willingness2. Established yards could convert to

oil and gas industry3. Willing to use the Norwegian

continental shelf as a test bench

4. Deep fjords allowed building ofconcrete substructures

Source:

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Cornerstone in developing the Norwegian Oil industryPredictability Risk reducing

Established a competitive and transparent environment Concession rounds every year, based on nomination

from oil companies Ownership not important Today 60 active oil companies many independents A lot of the service industry are owned by non

Norwegian companies External factors worked in the favour of Norway

IOCs were looking for new opportunities after thenationalisation

Quite willing to accept tough terms Transfer of knowledge and experience to

Norwegian firms Stick and the carrot used

Willy H Olsen

BP production millb/d oe

Source: BP

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Taxpaying oil workers in every community

More than 1300 companies

But clustersestablished

Willy H Olsen

R&D

Subsea

Maritime

Drilling

Operators

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Have to follow EU rules and regulations

No preference to Norwegian firms

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 Predictability, transparency, traceability Prohibited to discriminate on the basis of

nationality and to use standards and

specifications to obstruct competition

Infant industry argumentno longer applicable

Willy H Olsen

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The government stimulated technology partnership

Fiscal incentives and financial support

Universities andR&D centers

T h e

o p e r a

t o r s

Willy H Olsen

T h e o

i l a n d g

a s i n d u s t r y

http://www.cmi.no/http://images.search.yahoo.com/images/view;_ylt=A0PDoX9KhEdPGDcAU3.JzbkF;_ylu=X3oDMTBlMTQ4cGxyBHNlYwNzcgRzbGsDaW1n?back=http://images.search.yahoo.com/search/images?p=seadrill+logo&sado=1&n=30&ei=utf-8&fr2=sg-gac&tab=organic&ri=1&w=302&h=300&imgurl=www.smedvighytte.com/bilder/seadrill_logo.gif&rurl=http://www.smedvighytte.com/&size=6.5+KB&name=Seadrill+medlemssider&p=seadrill+logo&oid=c7f399e69c10669b89691044d349101f&fr2=sg-gac&fr=&tt=Seadrill+medlemssider&b=0&ni=112&no=1&tab=organic&ts=&sigr=10se1r854&sigb=13d7q9mmq&sigi=11d58q8pg&.crumb=UM6eMjJcYABhttp://www.slb.com/http://www.dnv.com/http://images.search.yahoo.com/images/view;_ylt=A0PDoX.KgUdPxFMAzVGJzbkF;_ylu=X3oDMTBlMTQ4cGxyBHNlYwNzcgRzbGsDaW1n?back=http://images.search.yahoo.com/search/images?p=ENI&fr=slv8-logi&fr2=piv-web&tab=organic&ri=4&w=1181&h=1175&imgurl=2.bp.blogspot.com/-7NtntaAbWSk/TiFYq0dnVyI/AAAAAAAADzY/zN12stN5v2c/s1600/Eni06logo.jpeg&rurl=http://smallworldnetwork.blogspot.com/2011/07/gheddafi-chiude-il-rubinetto-alleni-e.html&size=295.7+KB&name=...+Gheddafi+chiude+il+rubinetto+all&

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Kristin Tyrihans Tordis IOR

Highpressure

HightemperatureAdvanced

wells

Recordlong

pipelineheating

Subsea rawseawaterinjection

Subseaseparationboosting

andinjectionsystem

Troll Oil

Tappinga thin oil

layerDrilling

systemsAdvancedsoftware

The tax system made fields into laboratories

Testing and verifying new solutions

Willy H Olsen

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1 9 7 0

1 9 8 0

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2 0 1 0

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MBOE/D

The Ekofisk field, Norways first oilfield, began production in 1971

Was hoping for 20% recovery ConocoPhillips is now aiming for 50% Field life extended to 2050 Norways 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 additionalrevenues to Norway

Revitalizing and extendingthe life of the Ekofisk field

The initial plan

Willy H Olsen

Government top priority - EOR

Squeeze out the last barrel adds value

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Statoil is the dominatingplayer - operating 80% of

new projectsThe CEO will always beunder pressure to add in

country value

Willy H Olsen

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INTSOK was a new government initiative

Stimulating international growth

Willy H Olsen

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Total Oil & Gas Expenditure for 2012-2015

0

20

40

60

80

100

120

140

160

180

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

B i l

l i o n U S D

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Norwegian Oil & Gas World -class Clusters

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Catalogue presenting Norways world class capabilities

Minimizing discharges and emissions

Capabilities in the Norwegianoil and gas industry

for reducing energyconsumption and minimizingdischarges and emissions

Solutions for cleaner production

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Catalogue presenting industrys IOR capabilities

Delivering increased oil recovery

Capabilities in theNorwegian oil and gasindustry for solutions thatcan increase oil recovery

Solutions for increased recovery

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Rogaland Training & Education Centre - Local skilled workers are the fundamentfor local content

Achilles ID # 26088

Certified provider tothe Oil & Gas sector inNorway and Denmark

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Colleges

Regional development

Companies

RKK

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Samples of content skills training for the Oil &Gas sector

Subject areas:

Rules & regulationsHealth, environment and safetyEconomics and managementPetroleum technologyDrilling and well technology

AutomationElectro and electronicsHeating, ventilation and sanitationValve technologyMechanical processesPressure testing

Training and continuing education for the offshore and mechanical industry:

RKKOil & Gas

Achilles ID # 26088

Certified provider tothe Oil & Gas sector inNorway and Denmark

Hydraulics and pneumaticsScaffolding and riggingSurface treatmentWelding and plating

Flanges and gasketsIsolation and casingChemistry and processesMaterials administrationSub sea technologyInstrumentationSafety and emergency preparednessNavigation

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20.03.2014 Kvaerner 201121

Kvaerner Caspian -Vision

Kvaerner Caspian Group is jointly owned by KGNT andKvaerner AS

This is a true Kazakh company - Shareholding and Boardrepresentation are equal

Initial activities are targeted towards fabrication andengineering

Kvaerner Caspian aims to be the first full fledged EPCoffshore contractor in the Caspian Region

Vision

Create a top class Kazakhstani contracting company throughtechnology transfer and training of employees.

Execution of Oil & Gas projects with the maximum possibleworkload inside Kazakhstan

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20.03.2014 Kvaerner 201122

Kvaerner Caspian -Capabilities Kvaerner Caspians 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 Aktaufabrication yard

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Thank you for your attention

Looking forward to the B2B meetings