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2006-2007Norwegian Petroleum Directorate

Contribution to O i l f O r d e v e l O p m e n t

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The Norwegian petroleum sector governance system, the legislative, regulatory and concessionary framework for the petroleum operations is in many ways unique in the way it gives the government efficient management tools for securing prudent management of the petroleum resources, collection of a high share of the resource rent and due regard to health, the environment and safety. The system has been developed over more than 40 years, in parallel with the technological development of the industry, market changes and the requirements of the society. Norway has been able to develop a large petroleum sector which today constitutes around 25 per cent of GDP and 33 per cent of the total government income without significant negative impacts and without changing the fabric of the society. The establishment of a petroleum fund, the Government Pension Fund-Global, is securing that income from the sector also will benefit future generations. Strong interest have been expressed from many countries around the world in seeing if there are elements in the Norwegian petroleum governance system that can be applied elsewhere. The interest has been particularly strong in developing countries and countries with transitional economies.

The Norwegian Petroleum Directorate (NPD) shall contribute in the creation of largest possible values for the Norwegian society. The directorate’s challenge in maximising the oil and gas recovery is often to identify areas of misalignment between company interest and the interest of the society at large. When such misalignment is significant, the need for an independent authority is most critical, since company based evaluations may not necessarily reflect the aspiration of society.

NPD is also responsible for maintaining an overview and communicate facts of the upstream oil and gas sector. It further promotes realisation of the full resource potential on the Norwegian continental shelf and facilitates efficient industry processes. But most importantly NPD give advice to the Ministry of Petroleum and Energy (MPE) in important

matters related to resource management, including continuous development of the framework, as well as follow-up of the activity.

Based on the Norwegian experience and adapted to the particular needs of the cooperating partners, NPD has for more than 25 years assisted developing countries in petro-leum resource management. The MPE has specifically asked NPD to render technical advice and implement development assistance projects in the petroleum sector. This assistance is financed and coordinated by the Ministry of Foreign Affairs and the Directorate for Development Assistance (NORAD).

NPD is particularly pleased to see that Norwegian assistance to the petroleum sector in developing countries has got an increased focus trough the “Oil for Development” initiative (OfD). This initiative puts the petroleum resource management into a wider perspective, particularly focusing on income and environmental management and good governance and is based on a more formal cooperation between the relevant Ministries and Governmental bodies for assistance. Early assistance to young petroleum nations is particularly important, for establishing good governance systems before any significant revenues starts flowing.

This year we are pleased to publish our second report on the assistance to developing countries. We are focusing on some of the common challenges that we are facing in many projects like petroleum resource management, petroleum data man-agement and metering of petroleum production. Within a budget of seven man-years about 50 NPD professionals in ge-osciences, reservoir engineering, cost engineering, petroleum economy, data management and other disciplines have been involved during 2006. In addition we have received important assistance from the Petroleum Safety Authority Norway.

In 2006 special attention has been given to our projects in East Timor and Iraq, as well as to the preparation of new projects in Madagascar and Angola.

P R E F A c EPhoto: Emile Ashely

Acting Director-GeneralNorwegian Petroleum DirectorateBente Nyland

Norwegian Petroleum DirectorateP O Box 600

NO-4003 StavangerNorway

Telephone: +47 51 87 60 00Telefax: +47 51 55 15 71

E-mail: [email protected]

Norwegian Petroleum DirectorateContribution to

O i l f O r d e v e l O p m e n t

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1. INTRODUCTION

2. FACTS2.1 The Norwegian Petroleum Directorate2.2 The Ministry of Petroleum and Energy2.3 The Petroleum Safety Autority Norway2.4 Oil for Development2.5 PETRAD

3. ASSISTANSE UNDER THE NORAD/NPD AGREEMENT3.1 Visiting delegations3.2 Project Planning3.2.1 Sao Tome and Principe3.2.2 West Africa3.2.3 Angola3.2.4 South Africa Phase III3.2.5 Madagascar3.2.6 Bangladesh3.2.7 “Oil-fish-environment”3.3 Project management and coordination3.4 Technical assistance to NORAD3.5. Information and training3.6 NORAD/OfD Accounts 20063.7 NORAD/OfD Budget and plans 2007

4. BILATERAL PROJECTS4.1 Accounts 2006 Bilateral projects4.2 Plans 2007

5. ARTICLES5.1 Petroleum Data Management. A cornerstone in regulation oil activities to the benefit of the people5.2 Institutional cooperation between Mozambique and Norway regarding gas metering5.3 Managing the Norwegian Oil and Gas Resources, the Norwegian way

6. OfD Projects in NPD6.1 Angola6.2 Bangladesh6.3 cambodia6.4 ccOP6.5 India6.6 Iraq6.7 Madagascar6.8 Mozambique6.9 Nicaragua6.10 Nigeria6.11 Sao Tome and Principe6.12 South Africa6.13 Sri Lanka6.14 Tanzania6.15 Timor-Leste6.15 Vietnam

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The Oil for Development Initiative (OfD) was launched in September 2005. A ministerial steering commit-tee has been established for OfD with representatives from 4 ministries (Foreign Affairs (MFA), Finance (MoF), Petroleum and Energy (MPE) and Environment (MoE)). The Norwegian Agency for Development cooperation (NORAD) has the secretariat for OfD.

The Norwegian Petroleum Directorate (NPD) assistance is now an integral part of a comprehensive Norwegian assistance within the petroleum sector, including envi-ronment, health, safety, revenue management and good governance.

The NPD has assisted developing countries in petroleum resource management for more than 25 years. The assist-ance has changed focus over time. In the beginning the focus was towards specific technical assistance on an ad hoc basis, now it’s mainly directed towards long-term in-stitutional cooperation with sister organisations having similar governance functions on a wide range of issues.

The assistance is provided and financed under an agreement with NORAD and the MFA. In 2004 NPD was divided into two separate government institutions, NPD and the Petroleum Safety Authority (PSA). Both organisa-tions are now parties of the above agreement.

All existing institutional cooperation programmes that are conducted by NPD and PSA are now defined to be under the umbrella of OfD.

From a governmental point of view petroleum resource management frequently requires coordination with other sectors of society, as well as with neighbouring countries. In areas where such cross-sector or cross- border challenges are identified, NPD has a long tradition in promoting such projects.

Most of the cooperation programmes require assistance beyond the capacity of the NPD and the PSA. Expertise is then procured from national and international consult-ants and technical input is also provided by other Norwegian institutions.

NPD believes that these cooperation projects could have substantial impact on the cooperating institutions, as well as on the petroleum sector development and on the general economic development in the country in question. Access to efficient energy systems is important

to industrial development and poverty alleviation. At the same time it is important to ascertain that natural resources are managed optimally, that health, environ-mental and safety considerations are duly considered and that the host country gets its rightful share of the profit from the activity. The governmental institutions with which NPD are cooperating are met locally with considerable challenges in their contact with repre-sentatives from the international petroleum industry, an industry with very strong managerial, technical and financial resources.

Norway has particular experience and competence in the management of petroleum resources. The Norwegian regulatory framework for the petroleum upstream sector has been developed in parallel with the technological development of the industry, mar-ket changes and the requirements of the society. The Norwegian regulatory and concessionary framework is in many ways unique in the way it gives the govern-ment management tools for securing prudent resource management and due regard to health, the environment and safety in conducting the petroleum operations. The Norwegian experience is valid, but the solutions will always have to be adapted to the local requirements, traditions and to the institutional capacity that can be established. Some countries have established systems that cannot be changed in the short run. But long term improvements can sometimes be made to make the governance systems more efficient, transparent and equal to all participants.

In total in 2006 the NPD and PSA used 5.0 man-years for this international assistance (4.8 and 0.2 man-years re-spectively) out of a seven man-years budget for the NPD for international assistance. In 2005 the total NPD and PSA assistance was 6.1 man years (5.4 and 0.7 man-years respectively). This is significantly lower than planned due to delays in extending existing programmes and in the start up of new programmes.

A total of 50 NPD and ten PSA employees were engaged in assisting developing countries in petroleum resource management in 2006. The feedback from our profes-sionals in data management, geosciences, reservoir engineering, cost engineering, petroleum economics, metering and health, environment and safety is that the work is stimulating and that important competences are developed further.

1 I N T R O D U c T I O N 1. INTRODUCTION

2. FACTS2.1 The Norwegian Petroleum Directorate2.2 The Ministry of Petroleum and Energy2.3 The Petroleum Safety Autority Norway2.4 Oil for Development2.5 PETRAD

3. ASSISTANSE UNDER THE NORAD/NPD AGREEMENT3.1 Visiting delegations3.2 Project Planning3.2.1 Sao Tome and Principe3.2.2 West Africa3.2.3 Angola3.2.4 South Africa Phase III3.2.5 Madagascar3.2.6 Bangladesh3.2.7 “Oil-fish-environment”3.3 Project management and coordination3.4 Technical assistance to NORAD3.5. Information and training3.6 NORAD/OfD Accounts 20063.7 NORAD/OfD Budget and plans 2007

4. BILATERAL PROJECTS4.1 Accounts 2006 Bilateral projects4.2 Plans 2007

5. ARTICLES5.1 Petroleum Data Management. A cornerstone in regulation oil activities to the benefit of the people5.2 Institutional cooperation between Mozambique and Norway regarding gas metering5.3 Managing the Norwegian Oil and Gas Resources, the Norwegian way

6. OfD Projects in NPD6.1 Angola6.2 Bangladesh6.3 cambodia6.4 ccOP6.5 India6.6 Iraq6.7 Madagascar6.8 Mozambique6.9 Nicaragua6.10 Nigeria6.11 Sao Tome and Principe6.12 South Africa6.13 Sri Lanka6.14 Tanzania6.15 Timor-Leste6.15 Vietnam


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NPD charged NORAD and our institutional cooperation partners for assistance under OfD in 2006 a total of NOK 25.3 mill, up NOK 0.2 mill from 2005. A significant part of the total costs are related to procurement of external services. The total cost of these programmes are however higher because significant volumes of services and goods are procured locally.

The NPD also renders service to the MPE to assist in following up the Memorandum of Understanding agreements that have been signed with other petroleum producing countries. In 2006 the activity was particularly high towards Russia.

In 2006 the NPD support has comprised a number of issues and disciplines, but we have seen that a few of them are much in focus in several programmes:• Regulation through petroleum contracts or legal / regulative framework• Extension of the continental shelf under UNcLOS• The promotion and licensing process• Supervision of licence activity• Petroleum data management• Fiscal Metering• HS&E, including emergency preparedness planning• EITI and good governance

Through the Extractive Industries Transparency Initiative (EITI) several petroleum producing nations and major in-ternational oil companies have committed themselves to procedures and reporting mechanisms/institutions that will improve the transparency regarding the very large flows of funds that characterise this industry. Under OfD, Norway should be in a good position to supplement EITI on good governance and transparency in the petroleum sector. OfD has also strengthened the focus on environ-mental issues, which is very positive. Unfortunately OfD is not addressing health and safety issues directly, NPD and PSA will however keep focus on these aspects and see to it that HS&E is included as an integral part of the support to our cooperating partners. In Mozambique INP with assistance from PSA arranged a workshop on emergency preparedness related to gas distribution in the densely populated Matola area, an initiative that was very well received by the industry, local institutions and other stakeholders.

UN Convention on Law of the Sea (UNCLOS) As regards the UNcLOS, and potential claims from island and coastal states for extension of their sovereign ter-ritorial rights beyond the 200 nautical mile exclusive economic zone, the NPD has supported these issues in several programmes in 2006. NPD has close connection with GRID Arendal and UNEP who provide the compe-tence on the process that has to be followed and the data that is needed for the applications. Regional and cross sector networking The offshore petroleum industry has very important interaction with other sectors of the society like fishing, shipping and tourism, in addition to the direct impact on economic and industrial development. Environmental issues and restrictions for other users of the sea are im-portant. In 2006 the NPD has continued the cooperation with the Institute of Marine Research and the Norwegian Pollution control Authority to develop joint projects. Firm plans are now in place for Angola.

Many of the issues are very well suited for regional co-operation. We are now, in cooperation with OfD and the involved cooperating foreign institutions, facilitating the finance of such cross institutional activities when new programmes are designed. Regional networking works!

Planning of new programmes in 2006 Due to some delays in the start up of OfD, the formal process of establishing new programmes and to ex-tend existing programmes have taken more time than planned. We do however see progress as to the start up of a new programme with OMNIS in Madagascar, a new programme with Ministry of Petroleum (MINPET) in An-gola and the extension of the existing programme with the National Petroleum Institute (INP) in Mozambique. We expect all these programmes to be in place during the first half of 2007. The cooperation with Department of Minerals and Energy (DME) in South Africa has been extended under a programme administered by The Nor-wegian Water Resources and Energy Directorate (NVE) and a formal cooperation between Petroleum Agency South Africa (PASA) in cape Town and the NPD will most likely be established in 2007. cooperation with Sao Tome and Principe is also still under discussion between the National Petroleum Agency (ANP) and the possible do-nors OfD, World Bank and the African Development Bank.


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2 F A c T S

Photo: Einar Halvorsen

2.1 T H E N O R W E G I A N P E T R O L E U M D I R E c T O R A T E

NPD is administratively subordinate to the Ministry of Petroleum and Energy (MPE).

THE MAIN OBJEcTIVE:The NPD shall contribute to creating the greatest possible values for the society from the oil and gas activities by means of prudent resource management based on safety, emergency preparedness and safeguarding the natural environment.

THE PRIMARY FUNcTIONS OF THE NPD ARE TO:• exercise administrative and financial control to ensure that exploration for and exploitation of petroleum are carried out in accordance with prevailing legislation, regulations, guidelines, decisions and licensing terms• ensure that exploration for and exploitation of petroleum are pursued at all times in accordance with the guidelines laid down by the MPE• advise the MPE on issues relating to exploration for and exploitation of submarine natural resources• issue regulations relating to resource management• follow up the industry’s compliance with regulations for resource management• perform resource assessments and maintain a resource inventory• ensure that the petroleum activities minimize discharges and emissions to the external environment• manage and make available petroleum data and information.• audit fiscal metering systems• ensure security of deliveries• handle cO2 tax issues on behalf of the Ministry of Finance• emphasize cost-effectiveness in exploration and production, cost-effectiveness in utilization of the infrastructure and coordination across production licences• assist the Norwegian Agency for Development cooperation, (NORAD) and the Ministry of Foreign Affairs, in planning and implementing support in the petroleum sector (OfD) to authorities in selected countries and regional organisations• support sister organisations in other petroleum producing countries through institutional cooperation or technical assistance• assist MPE in implementing MoU’s with other petroleum producing countries


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2.2 T H E M I N I S T R Y O F P E T R O L E U M A N D E N E R G Y

Norway has developed from an inexperienced oil and gas nation in the mid 1960’s to one of the world’s largest exporters of petroleum. Daily hydrocarbon production is currently exceeding 4.5 million barrels of oil equivalents. This represents about 25 per cent of gross domestic product and 50-55 per cent of total Norwegian export.

Overall administrative responsibility for petroleum operations on the Norwegian continental shelf rests with the Ministry of Petroleum and Energy (MPE). Its job is to ensure that these operations are pursued in accordance with the guidelines laid down by the Storting (parliament), which determines the framework for petroleum operations in Norway.

THE PRIMARY FUNcTIONS OF THE MPE ARE:• development of the legal, and institutional framework• preparation and implementation of policies, such as opening new acreage and licensing, approval of field development plans, production and transport plans environmental issues• implementation of Memorandum of Understanding for cooperation with the authorities in other countries• internationalisation of the Norwegian petroleum sector, The INTSOK foundation has been established to assist the MPE in this process.• Monitoring state owned companies in the petroleum sector


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2.3 T H E P E T R O L E U M S A F E T Y A U T O R I T Y N O R W A Y

The PSA reports to the Ministry of Labour and Social Inclusion.

THE MAIN OBJEcTIVE;PSA stipulates premises for and follows up that the players in the petroleum sector maintain high standards of health, environment, safety and emergency preparedness, and thereby also contribute to creating the greatest possible values for society,

THE MINISTRY HAS DELEGATED TO THE PSA AUTHORITY TO:• issue regulations pertaining to HSE in the petroleum activity• enforce the regulations• grant consents and exemptions from regulations if necessary and justified

The PSA has the regulatory responsibility for safety, emergency preparedness and the working environment in the petroleum activities offshore Norway and on certain petroleum facilities and connected pipeline systems on land.By means of its own supervision and cooperation with other authorities with independent regulatory responsibility for health, environment and safety, the PSA shall ensure that the supervision of the petroleum activities are carried out in a comprehensive manner. Important attributes of the PSA’s regulations and supervisory activities are:• regulations expressed in terms of goal-setting requirements • supervision focused on the companies’ risk based safety management systems • supervision carried out by means of audits and verifications • conclusions focused on improvement potential in the management system, transparency, mutual respect and recognition of roles and responsibilities

Photo: Emile Ashely


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2.4 O I L F O R D E V E L O P M E N T

OBJEcTIVEThe Oil for Development (OfD) initiative aims at assisting developing countries with hydrocarbon potential in their efforts to benefit from petroleum resources in a way that generates economic growth and welfare to the popula-tion in general, and is environmentally sustainable.

BAcKGROUNDPetroleum plays and will play an important role in a number of developing countries. Oil and gas holds promise of becoming a vital resource for economic and social development, It has, however, in many cases proved difficult to translate petroleum resources into improved welfare for the inhabitants of these countries. The combination of large and sudden inflows of revenues and lack of relevant institutions and governance systems increases the risk of corruption, rent-seeking, conflict, dependence and crowding out of industries. As a result, many developing countries score conspicuously low on the current generation of international development performance indexes.

THE OIL FOR DEVELOPMENT INITIATIVEThe Oil for Development (OfD) initiative cuts across and involves the relevant Norwegian ministries, embassies, other governmental agencies in addition to organisations and consultancies. A brief description of roles and responsibilities for the different bodies involved follows below.

THE STEERING cOMMITTEE AND THE SEcRETARIATThe Steering committee for Oil for Development consists of the Ministry of Foreign Affairs (chair) the Ministry of Petroleum and Energy, the Ministry of Finance and the Ministry of Environment. The secretariat is in Norad (Norwegian Agency for Development cooperation), and is responsible for coordination and implementation of the initiative. The steering committee formulates strategic direc-tions, guidelines and priorities for the secretariat and implementing organisations, and decides on major project proposals. The committee ensures that relevant governmental bodies are involved and has an overall quality control function.

EMBASSIESThe Norwegian embassies play an essential role in Oil for Development, as extensive development cooperation responsibility is assigned to them.The embassies hold valuable local and regional knowledge and network extensively with government agencies, industry, civil society as well as international organisa-tions and other donors in their respective countries. Requests for Oil for Development assistance are normally channelled through the embassies, and embassy staff generally appraise and provide advice on proposals for cooperation.

NORADNorad is the hub of Oil for Development in terms of technical advice, coordination, information exchange and facilitation of quality control. Norad receives requests from governments and other partners, com-municates overall guidelines and steering committee decisions to relevant stakeholders, and conveys stake-holder response back to the committee. Norad utilises an expanded range of consultancies, law firms and research institutions through framework agreements that have been subject to competitive bidding.

IMPLEMENTING AGENcIESKey implementing agencies have been and remain the Norwegian Petroleum Directorate (NPD), Petrad (International programme for petroleum management and administration) and the Pollution control Authority Norway (SFT). A range of consul-tancies, research institutions and non government organisation are also involved, as are personnel from the relevant government ministries. The Norwegian oil and gas industry is also drawn upon in transfering competence and knowledge and Intsok - Norwegian Oil and Gas Partners – contribute.

THE ASSISTANcEThe Oil for Development programme will be able to provide in an efficient manner seminars and consultancy support of limited duration to many countries, based on a very simple application process (First line support).

A limited number of countries will receive long term institutional support under the Oil for Development programme. In these cases a more comprehensive application and selection process will be used.


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2.5 P E T R A D

International Programme for Petroleum Management and Administration

Petrad was established in 1989 to facilitate sharing of knowledge and experience related to petroleum management and administration.

Petrad arranges tailor-made seminars in Africa, Asia, Latin America and countries in the former Soviet Union in the upstream and downstream sectors, and offers two eight-week courses in petroleum management in Stavanger, Norway. These are implemented by specialists from the authorities, professional company managers, consultants and academic lecturers with extensive experience from the petroleum industry in Norway and internationally.

TAILOR-MADE SEMINARS:The tailor-made seminars cover a wide range of topics in the management of petroleum resources. They focus on management techniques applied to real problems of major interest to the participants. Some seminars also have a technical content. The objective of the programme is to identify solutions to assist the participants and their organisations in their work.

8-WEEK cOURSES:Two eight-week courses on petroleum policy and management and management of petroleum development and operations, are arranged once a year to provide professional support for a career in petroleum management. They focus on formulation and execution of petroleum policies and the operational aspects of the industry


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NORAD, holding the secretariat for OfD, is the most impor-tant cooperating institution to NPD for the implementation of our institutional cooperation programmes. NORAD is also a direct receiver of services rendered by the NPD, through a separate agreement with NPD (also including PSA).

The direct assistance to NORAD under the Assistance Agreement had a budget for 2006 of NOK 2.025 mill, an increase compared to previous years due to the OfD. The accounts show that the total assistance rendered under the Agreement added up to NOK 1 459 547 (including NOK 80 586.05 from 2005).

Total invoices 2006 amounted to NOK 1 178 740.54. The remaining part will be invoiced in 2007.

1 412 hours were used out of a budget of 1 800 hours. 53 hours were charged by PSA.

Assignments from NORAD regarding Sao Tome and Principe and Madagascar are reported separately in section 6.

Major activities in 2006:

3.1 VISITING DELEGATIONSThe total expenses under the Norad programme for delegations visiting NPD during 2006 were NOK 107 051. Expenses related to delegations from cooperating partners are charged to the particular programmes.

Below is information about the various delegations that were related to the international cooperation.• February 16: Innovation Norway. A delegation of 20, representing a large number of Innovation Norway offices abroad, was informed of the NPD international assistance programmes.• March 03: Member of Parliament Isabel Ortega Ventura, Bolivia visited Petrad and NPD. She was informed about resource management issues in general.• March 20 - 23, the cEO and 3 colleagues from Petroleum Agency South Africa to discuss future cooperation.• April 21: Minister of Energy, Somaliland. Discussions regarding petroleum sector governance.• May 08 - 12: 7 representatives of Ministry of Oil Iraq for Joint Steering committee.• May 16 - June 06: 3 representatives Ministry of Oil, Iraq for IOR on the job training.• June 08 - 30: 3 representatives Ministry of Oil, Iraq for IOR on the job training.• June 10 - 30: 5 representatives Ministry of Oil, Iraq for Data Management on the job training.

• June 24 - July 05: 5 representatives from Petrovietnam for Steering committee and geological excursion.• July 03 - 06: 5 representatives from Petrovietnam on workshop.• August 22: Director General at DPR, Nigeria, Mr Tony chukwueke visited NPD to discuss ongoing and further cooperation.• September 18 - 22: 6 representatives of ANP, Sao Tome and Principe to discuss planned cooperation. Assistance from PSA, SFT and Petrad.• September 25: 3 representatives from Staatsolie, Suriname - meetings with Petrad and NPD / PSA.• September 27: The president of the Senate in Bolivia to discuss future cooperation.• October 18: The Angolan Vice Minister Petroleum with 3 colleagues for information and to discuss planned cooperation pogramme.• October 18: The Minister of Mineral Resources, Mozambique, with 4 colleagues for information and to discuss a new 4 year cooperation programme as a continuation of the existing programme.• October 24: The Ambassador of Madagascar to Norway for information of planned cooperation.• November 20 - 24: 4 representatives from Ministry of Oil, Iraq for Joint Steering committee• November 26 - December 08: 4 representatives from OMNIS, Madagascar on HS&E training assisted by PSA.• November 30 - December 01: 3 representatives from BP MIGAS, Indonesia to discuss the use of Plan for Development and Operations• December 05 - 08: Delegation from Department of Minerals and Energy, South Africa to discuss joint programme with PSA, Petrad and NVE.

3.2 PROJECT PLANNINGAt the start of 2006 several new projects and extensions of projects were in the planning phase. The completion of these planning processes has taken some more time than expected. In total NOK 315 106 were used for planning purposes during 2006.

Status of the OfD planning activity at end of 2006:

3.2.1 Sao Tome and PrincipeNPD was requested in 2005 by the Norwegian Embassy in Luanda to assess the need for assistance to Sao Tome and Principe and some planning activities were carried out. This work has continued in 2006 and in September Agencia Nacional de Petroleo (ANP) visited NPD to discuss a coop-eration programme. The request was presented in October 2006 by ANP to Minister Solheim at the EITI conference in Oslo. The OfD secretariat has not made a final commitment to Sao Tome and Principe, and is currently discussing the need for Norwegian support with other donors. Ref. section 6.11.

3 A S S I S T A N c E U N D E R T H E N O R A D / N P D A G R E E M E N T

Photo: Petrad


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3.2.2 West AfricaAn initiative has been launched for a regional seminar on the management of geodata and on petroleum sector governance in Gambia, Guinea, Guinea Bissau, Senegal and Mauretania. NPD has given some advice in the plan-ning phase. If the seminar is successful, The North West Africa Sub Regional Hydrocarbon cooperation Org- anization (SHcO) will be established with the mission:- To promote cooperation and progress in the region concerning exploration for and exploitation of hydrocarbons- Enhance the attractiveness of the region in attracting companies with economic and technical capacity to carry out exploration for and exploitation of hydrocarbons in a safe and prudent manner- Support to the petroleum industry, to programmes and activities implemented by the SHcO member countriesThe initiative has been further developed in 2006 with particular focus on assistance to these countries in estab-lishing processes for assessing the potential for claims under the UNcLOS. OfD is evaluating the initiative.

3.2.3 AngolaFollow up activities regarding the MINPET application for a phase II programme. The agreement between Angola and Norway was signed on the 4th October. Meetings were conducted in Oslo during the EITI conference and the Vice Minister for Petroleum and the programme co-ordinator visited NPD on October 18th. The cooperation agreement between NPD and MINPET is planned to be

signed september 2007. The programmehave a duration of 3 years and a budget of NOK 27 mill.The 2006 planning costs also include cost for auditing the phase I programme and for coordination with other Norwegian institutions which will provide technical services under the new programme. 3.2.4 South Africa Phase IIIThe main components of the new “South African En-ergy Sector Policy Research and capacity Development Programme”, the South Africa III programme, are the responsibility of Department of Minerals and Energy. This programme was originally launched in 1996. NVE has been nominated the institutional cooperation partner in Norway. If required PSA, Petrad and NPD will provide services as subcontractors to NVE. The National Oil company Soekor was split in two parts, the commercial arm PetroSA and Petroleum Authority South Africa (PASA). PASA is responsible for promotion and licensing and has become the new Upstream Regu-lator for the petroleum sector in South Africa under the new Mineral and Petroleum Resources Development Act.

PASA will be an active partner in the South Africa III Programme. The NPD has assisted PASA in planning of their programme business plan, ref also activities reported under section 6.12, the South Africa project. It is expected that the PASA / NPD cooperation will commence during first half 2007.

Photo: Erling Kvadsheim


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3.2.5 MadagascarBased on an application from Office for National Mining and Strategic Industries (OMNIS) in December 2005 the OfD steering committee decided that Madagascar should receive short term support and that a long term programme was a possibility. The NPD participated on a fact finding mission to Madagascar in week 9. As a follow up of the mission, a short term support programme was designed, organized through Petrad. NPD was requested by Norad in August to assist Madagascar to develop the main programme and to facilitate co-operational activities and support until the long term programme could be signed. Ref. section 6.7.

3.2.6 BangladeshThe Asian Development Bank (ADB) has agreed to finance a project for increasing the capacity of the natural gas transmission and distribution network in Bangladesh - a USD 230 million programme. The Norwegian Embassy and ADB are discussing how to include an element of institutional support from Norway to the petroleum sector in Bangladesh under the umbrella of the ADB project. A continued support to the Hydrocarbon Unit is still being considered. A planning mission is scheduled for 2007.

3.2.7 Oil/fish/environmentIn cooperation with PSA, SFT and the Institute of Marine Research (IMR) NPD has prepared a report dealing with governance issues involving the petroleum sector, man-agement of aquatic life and environmental management. This report was presented to NORAD and MFA in 2005 and a follow up meeting was called by NORAD in June 2006. The draft pilot project made for Angola, to be included in phase two of the MINPET programme, has been discussed with IMR to coordinate this component with the ongoing IMR support to Angola.

This kind of cross sector support is relevant also for other countries and in some areas a regional approach to these challenges will be very relevant. Such support will also be at the core of the new OfD initiative.

3.3 PROJECT MANAGEMENT AND COORDINATIONNPD maintains a close contact with the OfD secretariat in NORAD, with the MPE, PSA, PETRAD, INTSOK and other institutions regarding the implementation of existing programmes and planning of new programmes. Experience from ongoing or completed programmes can represent valuable input to other programmes. In the same way the different OfD co-operating institutions can also benefit from mutual exchange of experience. Most of the programmes require input from several institutions and consultants. A close contact with other institutions in Norway and with consultants, research institutes and training institutions is therefore necessary.

NPD puts particular emphasis on quality control and on transfer of experience and competence between the different projects. A close contact with the NPD manage-ment is also required to be able to coordinate the inter-

national assistance work with the NPDs own work in a smooth manner. The total costs for administration and coordination in 2006 were NOK 468 974.

3.4 TECHNICAL ASSISTANCE TO NORADThe NPD has rendered assistance in various areas, from part or full assessments of particular projects to general advice regarding petroleum sector assistance, some examples:• Assistance regarding the tendering for and follow up of an external “Assessment of Petroleum Sector Assistance”• Presentation on NORAD / WB: Private Investment Forum Workshop• Participation at the Trade and Industry conference on Development Assistance • Develop discussion paper on EITI in relation to the Mozambican Petroleum Sector• Participation on the EITI conference in Oslo• Update report to OfD on Oil, Fish and Environmental management• Presentation on World Bank Gas Flaring Reduction Initiative (WBGFRI) conference in Paris• Presentation at Safety and Emergency Preparedness Workshop in Ghana• Provide input to OfD discussions on mandate, organisation etc• Establish routines for and access to data regarding international petroleum resource data • Deliver specific country reports on petroleum resources to OfD on request• United Nations, Law of The Sea: Design of projects to prepare costal and island states in the third world to prepare claims for an extended continental shelf. Discussions also with UN GRID, Arendal. Total costs for these activities for NORAD in 2006 were NOK 257 298.

3.5 INFORMATION AND TRAININGIt is very important to disseminate information to the parties involved,and to the public in general regarding development assistance, to increase the awareness of such issues, to create discussion and to get valuable feedback. A number of information activities were carried out in 2006:• Further development of our web site on www.npd.no• A comprehensive 2005 Annual report on the NPD institutional cooperation programmes was prepared and distributed to cooperating institutions, NORAD, MFA, Embassies and to the industry (2000 copies)• Presentation to Innovation Norway Oil and Gas delegation in Stavanger • Presentations at INTSOK network meetings• Information for NORAD fellowship students at NTNU and UiS.• Information on institutional assistance and resource management to a large number of country delegations and to other donor countries

Photo: Erling Kvadsheim


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• Information on institutional assistance and petroleum resource management to NGO’s like Global Witness, Publish What You Pay, Open Society Institute’s Revenue Watch Programme• Presentation to NPD employees

To further develop the internal competence, internal workshops were arranged and relevant courses were provided for employees.

Total cost for these activities for NORAD in 2006 were NOK 230 532.

3.6 NORAD/OfD ACCOUNTS 2006The NORAD accounts in NPD have been approved by the State Auditor for 2005.

The accounts 2006 are given in the following table. The accounts do only include work performed directly for NORAD/OfD. The bilateral projects are reported separately in chapter 4. The rate for consultancy assistance in 2006 was NOK 730.

NORAD/OfD accounts 2006

3.7 NORAD/OfD BUDGET AND PLANS 2007Budget and plans for 2007 show an expected increase in the work load, but experience tells us that the plans frequently have to be changed due to unforeseen circumstances. OfD is still in the start up stage and it is difficult to know when new projects will start. The budget represents a level that can be accommodated by NPD.

The budget for assistance to Norad/OfD is based on a hourly rate for 2007 at NOK 730.

The focus on quality control, transfer of competence between projects and training of new personnel will continue. The general high work load in the NPD and the industry due to high oil prices will make access to key personnel a challenge. We expect an increased interaction with other institutions due to the wider focus of the OfD programme. Good coordination will be very important to maintain quality and efficiency.

In the 2007 budget NPD plan for:• An increase in the number of delegations coming to learn about petroleum sector governance• Start-up of long-term projects in Bangladesh and Sao Tome. • Some assistance and progress in planning for a long term project in Bolivia and possibly Sudan• Planning short term first line assistance to two or three new OfD countries• Technical assistance regarding • Support to countries preparing claims under UNcLOS. The NPD is having a close contact with UNED/GRID, Arendal in these matters, • Support to NORAD in cooperation with the World Bank • Support regarding the Global Gas Flaring Reduction initiative • Support to OfD regarding EITI • Assistance regarding HS&E and emergency preparedness (PSA) • Assistance regarding the interaction between fishery, petroleum activity and the environment • Expanded dissemination of information, particular to non-Norwegian institutions and individuals.

Costs Hours Costs Budget Difference

*December 05 80 586.05

Delegations 127.00 107 051.00 226 000.00 118 949.00

Project planning 242.00 315 105.79 405 500.00 90 394.21

Administration and coordination 615.00 468 974.29 538 000.00 69 025.71

Information and training 183.00 230 532.00 302 500.00 71 968.00

Technical assistance 245.00 257 297.82 472 000.00 214 702.18

2006 costs 1 412.00 1 378 960.90 1 944 000.00 565 039.10

Invoiced 2006 1 178 740.54

To be invoiced 2007 280 806.41

NORAD/OfD budget 2007

N

A U S T R A L I A

NPD - International cooperation

Venezuela Nigeria

Angola

Sao Tome & Principe

South Africa Mozambique

Madagascar

Seychelles Tanzania

Sri Lanka

Singapore

Bangladesh

Iran Iraq

Sudan India

China

Kazakhstan Azerbaijan

Russia

Japan South Korea Vietnam Thailand Cambodia Malaysia

East Timor

Nicaragua

Mexico Philippines

Indonesia Papa New Guinea

Bilateral agreementsof collaboration

NoradCCOP

Norad projectsunder planning


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countries with NPD bilateral projects are marked on the map below. Most of our projects are in Africa. We also have some important projects in Asia. Nicaragua represents the only project in Latin America. One of the projects, the ccOP PPM project, is a multilateral project. Our cooperation partner is an international organisation serving a number of countries in South East and East Asia. The bilateral projects are all long term projects of 3-5 years duration.

4.1 ACCOUNTS 2006 BILATERAL PROJECTSThe status and progress of each project is reported separately in chapter 6. As a general comment the NPD can report a reduction in the total number of NPD/PSA hours used of 20 per cent. Half of the reduction was due to reduction in the PSA services. The reported costs of NOK 25 mill, which is the same level as in 2006, include only costs booked in the NPD accounts. Several projects manage significant funds to meet local expenses or they do the procurement of external advisors and services locally. 62 per cent of the NPD costs are for external services and supplies, consultancy being the most important.

The NPD used about 4.75 man years for this work in 2006 and we received 0.2 man year assistance from PSA.

4.2 PLANS 2007For 2007 the NPD plans an increase in the activity level back to the 2005 level of 10 000 hours. Large projects

such as Mozambique, Nigeria, Iraq and Timor Leste are progressing well and the plans are relatively firm. In addition the new Madagascar project and the Angola Project will see increased activity. Some delays in activi-ties may occur and surprises are not a surprise in this business. The project in South Sudan, currently man-aged by PETRAD, and Sao Tome also associated with much uncertainty and the future involvement and role of the NPD is uncertain. This comment is also applicable to the Bangladesh project, which will be managed by ADB. At the turn of the year, the NPD will most likely have capacity to take on new tasks under the OfD programme . As it looks at the moment, the existing MPE approved capacity limit for this kind of work of seven man years, will be adequate in 2007. Demand for particular com-petence, like data management and geo scientific assistance, may present a challenge. It is therefore very important to qualify new resource persons in the time ahead. The NPD also have the option to employ new personnel or to buy such capacity in the market. In this part of the Annual report we present a short sta-tus for all ongoing projects under the management of NPD and PSA with finance from Norad and MFA. Each of the projects are formally reporting the progress and the plans directly to the respective embassies or to NORAD.

4 B I L A T E R A L P R O J E c T S


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Projects Hours OfD 1800 Iraq 1300 Sri Lanka 200 South Africa 400 Vietnam 0 ccOP 300 Vitra 2 300 Timor Leste 1000 Nigeria 1400 Tanzania 150 cambodia 500 Sao Tome 200 Madagascar 1200 Mozambique 1350 Angola 800 10900 6.61 Man years PSA, others 900 0.55 Man years NPD 10000 6.06 Man years

Projects Hours Amount Budget Difference OfD 1 412.00 1 378 960.90 1 944 000.00 565 039.10 Sri Lanka 205.00 1 860 503.50 2 115 000.00 254 498.50 South Africa 158.00 173 358.11 792 000.00 618 641.89 Vietnam 166.00 271 473.80 271 473.80 0.00 ccOP 407.50 544 326.40 438 000.00 - 106 326.40 Vitra 2 373.00 976 572.18 1 200 000.00 223 427.82 Timor Leste 866.50 10 903 650.19 14 095 000.00 3 191 349.81 Nigeria 1 097.75 2 345 147.22 4 000 000.00 1 654 852.78 Tanzania 245.50 524 257.67 855 500.00 331 242.33 cambodia 235.50 318 895.43 3 765 000.00 3 446 104.57 Sao Tome 137.50 462 293.99 2 192 000.00 1 729 706.01 Iraq 1 645.00 3 617 139.75 6 314 000.00 2 696 860.25 Madagascar 394.00 776 982.60 2 175 000.00 1 398 017.40 Mozambique 853.50 1 333 340.92 2 843 200.00 1 509 859.08 Angola 5.00 4 826.75 103 000.00 98 173.25 Total 8 201.75 25 491 729.41 43 103 173.80 17 611 444.39

The plans are presented in the table below. Out of the planned 6.6 men years, NPD hope to receive 0.55 from PSA, almost back to the 2005 level.

2006 Account Bilateral Projects

Assistance from externally recruited resident advisors is not included.



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Projects Hours Amount Budget Difference OfD 1 412.00 1 378 960.90 1 944 000.00 565 039.10 Sri Lanka 205.00 1 860 503.50 2 115 000.00 254 498.50 South Africa 158.00 173 358.11 792 000.00 618 641.89 Vietnam 166.00 271 473.80 271 473.80 0.00 ccOP 407.50 544 326.40 438 000.00 - 106 326.40 Vitra 2 373.00 976 572.18 1 200 000.00 223 427.82 Timor Leste 866.50 10 903 650.19 14 095 000.00 3 191 349.81 Nigeria 1 097.75 2 345 147.22 4 000 000.00 1 654 852.78 Tanzania 245.50 524 257.67 855 500.00 331 242.33 cambodia 235.50 318 895.43 3 765 000.00 3 446 104.57 Sao Tome 137.50 462 293.99 2 192 000.00 1 729 706.01 Iraq 1 645.00 3 617 139.75 6 314 000.00 2 696 860.25 Madagascar 394.00 776 982.60 2 175 000.00 1 398 017.40 Mozambique 853.50 1 333 340.92 2 843 200.00 1 509 859.08 Angola 5.00 4 826.75 103 000.00 98 173.25 Total 8 201.75 25 491 729.41 43 103 173.80 17 611 444.39

5.1 IMPORTANCE OF RESOURCE MANAGEMENT SySTEM Managing the Oil and Gas Resources - the Norwegian way It is generally appreciated that the management of the Norwegian oil and gas resources has been fairly successful, institutions playing an active governance role protecting the interest of the country and high national participation in all stages of the activity. The development of a state pension fund based on petroleum revenues is taking care of some of the inter generation aspects of this activity.

In our institutional assistance projects, we are drawing on the experience gained since the activity started in the1960s. Some of the major issues in this regard are presented below, but it is important to understand that what Norway achieved, was a result of the work of particular individuals, our traditions and not the least the access to capital, technology and human resources that could be trained to serve this new industry. Nevertheless we still hope that some of the is-sues related to petroleum resource management are of general interest to many petroleum producing nations. The goal of Norway as a petroleum producing country is to maximise the long-term social value of the hydrocarbon assets. To secure this objective it has been of great importance to establish a legal and contractual framework and create an efficient and competent public petroleum administration that is able to serve the country’s needs. The competence of the companies, the efficiency of the technology, strategies for state participation, local participation, data manage-ment, reservoir management, HS&E, and for the fiscal system; they all influence the resource recovery and the economic efficiency of the upstream petroleum sector.

The first production licences on the Norwegian continental shelf were granted in 1965, and the first exploration well was drilled the following year. The Ministry of Industry had the constitutional responsibility for these activities.

As activities increased during the 1960s and after a ma-jor discovery in 1969 the need for organisational change gradually became apparent. In 1972, the Storting (Parliament) decided to establish the Norwegian Petroleum Directorate (NPD) as a regulatory agency and Statoil to take care of the state´s business related functions. The policy and the legal framework for the activity were still the responsibility of the Ministries and the Storting. Exploration for hydrocarbons offshore Norway started

in the North Sea in 1966 and moved into areas in the Norwegian Sea and the Barents Sea in 1980. New large areas were opened for exploration in deep waters (1000-2000m) in the Norwegian Sea in 1994.

The current level of oil production is approximately 2.8 mill. bbls/day, and the amount of gas transported to the market and sold each year is approximately 90 bln. ScM. At present this makes Norway among the largest oil and gas producing countries in the world and it is expected that Norway will continue to be a major oil and gas producer for several decades.

In Norway, an ambitious strategy has been established to maximise the long-term value of the petroleum asset in order to improve the fortune and wealth of the coun-try. An important element in the Norwegian policy is to find a good balance between the national interests and the interests of the multinational companies. It is impor-tant to create win-win situations. A good environment for cooperation and dialogue between the authorities and the companies has been created.

It has been of great importance for Norway to establish a legal framework that at all levels serves our specific needs. Sovereignty to the Norwegian continental shelf was proclaimed in the royal decree and act of 1963. The Royal Decree of 9.4.1965 pawed the way for the concessionary system that we still operate today, where most of the general terms are to be found in the, at any time, applicable laws and regulations. The key Act for the petroleum activity is the Petroleum Act, but also acts like the Pollution Act and the Working Environment Act apply to the petroleum activity. By virtue of the acts and as a supplement to these, regulations have been issued.

The necessity for petroleum resource management is stipulated in the Petroleum Act § 1-4: ”Management of petroleum resources shall be carried out in a long-term perspective for the benefit of the Norwegian society as a whole. In this regard the resource management shall provide revenues to the country and shall contrib-ute to ensuring welfare, employment and an improved environment, as well as to the strengthening of Norwegian trade and industry and industrial development, and at the same time take due regard to regional and local policy considerations and other activities.”

An important part of the policy established when the petroleum activities in Norway started, was the part concerning an efficient integrated public petroleum ad-ministration. The ambition was, within specific important areas to create the same level of competence in the ad-ministration as in the multinational oil companies. This

5 A R T I c L E S



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was a prerequisite in order to create an environment for efficient cooperation and dialogue between the Norwe-gian authorities and the foreign companies.

In Norway several ministries, directorates and agencies take part in the petroleum administration. The ministries are dealing with questions of principles, general policy, legislation and concession policy. Then, underlying the ministries, several directorates and agen-cies have been established as advisory bodies to the ministries with special responsibility related to technical matters and day to day supervision of the activity. The oil companies do their job which is to produce petro-leum and deal with the commercial interests of the com-panies. It has proven important for the overall efficiency in the petroleum industry that the oil companies are subjects to ordinary commercial competition.

The Ministry of Petroleum and Energy (MPE) has the overall responsibility for the petroleum activities on the Norwegian continental shelf. The Ministry´s task is to ensure that the activities take place in accordance with the guidelines of Storting and the parliament.

Health, Safety and Environment – HSEWithin the HSE area, the Petroleum Safety Authority Norway, the Norwegian Pollution control Authority, the Norwegian Social and Health Directorate cooperate in a joint regulatory regime on safety, health and environment.

Petroleum Resource ManagementThe technical issues related to efficient petroleum resource management are taken care of by the Norwegian Petroleum Directorate (NPD).

The Norwegian Petroleum Directorate is administratively subordinated to the Ministry of Petroleum and Energy, and advises the Ministry on matters concerning management of the petroleum resources on the Norwegian continental shelf. In order to obtain an efficient exploration and exploitation process which maximises the social value for Norway, a structure to assess and monitor the activity has been established. This structure is based on the following main elements:

1. Goal setting: The goal is to maximise the economic value within each single phase of the activity and assure that the long term value creation along the whole chain is satisfactory. To make sure that the different activi-ties are in concurrence with the goal, a set of reporting systems and methodologies for evaluation have been established. 2. Experts and professional staff: In order to perform analyses, to evaluate the impact of different strategies and to pursue future planning the MPE as well as the NPD has been staffed with experts and given facilities

that enable the authorities to make independent evalu-ations. The MPE is staffed with highly qualified experts within legislation and economics, while the NPD has a multidisciplinary staff with competence within all the classical petroleum disciplines like geophysics, geol-ogy, reservoir engineering, facility engineering, resource economics, etc.

3. Data and information: The authorities’ resource administration depends on access to information and documentation from the companies. In Norway the petroleum legislation has a large number of rules which demand the licensee/operator to submit information. Furthermore representatives from the MPE and the NPD have the right to be present as observers in the liaison committees established in connection with the activities within each licence.

4. Reporting: In addition to the reporting requirements the oil companies and the industry,the NPD on regular basis reports to the MPE on the status of the activities. The status of the petroleum activity is reported to the public through “Facts”, a comprehensive annual publication covering all phases of the activity. A “White paper” on the status of the petroleum industry is prepared and forwarded to the Parliament for infor-mation and evaluation every second year. This report may also include recommendations for industrial plans that the Storting has to consider.

The Directorate keeps track of all the important data in connection with the petroleum activity, including a complete, up-to-date survey of reserves, resources, production, costs and other relevant information.

All data are reported to the databases digitally either online or on media, and security and rules of confiden-tiality are highly respected. The data are regarded as a valuable national asset with due attention to safe stor-age, maintenance and managers’ attention. This activity is decribed in more detail in section 6.3 of the report.

Two times a year the Norwegian Petroleum Directorate (NPD) is up-dating the forecast for estimated petroleum production from all fields on the Norwegian continental shelf. Forecasts of costs related to the development and operation of the fields are up-dated. These are based on reports from the oil companies. The reports include the operators´ best estimates regarding production and operating cost from all fields. Also plans for future investments are reported.

The forecasts by the NPD serve as one of the main elements in national budgeting and economic planning and are important in estimating total net present value of the petroleum assets. Prudent reservoir management is a basic requirement. The licensee has to monitor the reservoir with regard to production, pressure and flow conditions.


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Also the composition of the produced petroleum has to be monitored. The processing facilities have to be monitored in order to to achieve optimal operation.

NPD is responsible for the statutory supervision as far as oil and gas measurement is concerned, and to supervise the operator’s adherence to Norwegian law relating to fiscal measurement activities.

The objective of the supervisory activity is to verify the accuracy of the measurement equipment and to verify the status of related procedures that are being used by the licensees to quantity/quality determination of fiscal hydrocarbon streams. Oil and gas measurements serve as a basis for the stipulations of gross revenues, for royalty calculations (presently not applied) and for determining the licensee’s income.

In the countries where Norwegian petroleum is landed, the authorities’ responsibilities and roles are stipulated in treaties and cooperation agreements. There exists extensive cooperation between the authorities in order to safeguard the individual country’s requirements for fiscal metering. NPD is supporting many institutions regarding metering. Ref section 6.2 on metering in Mozambique.

Oil companies can access acreage in Norway through a discretionary licensing system where the applicants for concessions are being evaluated and awarded based on technical performance, and financial strength. There is no auction and no signature bonus is being paid. Before the authorities release acreage for exploration, NPD performs an evaluation of the areas. In unexplored areas, geophysical and geological reconnaissance surveys have to be done prior to licensing. In areas

where exploration has been going on for some time, the assessment is based on existing data. The evaluation will give an indication of the hydrocarbon potential of the respective basins and a ranking of the areas in terms of prospectivity. Most licences are formed by a group of companies, national, international, state or private.

The Norwegian authorities require that all petroleum operations on the continental shelf are carried out in accordance with the legal requirements and internationally accepted standards. In different stages of the activity, applications/plans have to be submitted for approval:• Drilling programme• Development plans (PDO)• Plans for the installation of pipelines or for onshore terminals• Revised PDOs• Abandonment plansAs a result of the policy of establishing a competent public administration, the authorities are in a position to discuss and challenge the plans of the companies prior to the approval, or to request further studies or documentation to be presented for consideration before an approval can be made by NPD, the Ministry or by the Storting.

The government take in Norway is mainly collected through the taxation and through the state direct participation. The petroleum tax system is based on a corporate tax of 28 per cent and a special tax of 50 per cent. The system is very close to being a cash flow tax system and gives few distortions. (Royalties have been put to 0per cent.)The government takes the same level of the costs as it takes of the profit.

Fig. 2, The Norwegian Petroleum Administration

Stortinget (Parliament)

The Government

Ministry ofPetroleumand energy

Ministry of theEnvironment

Ministry ofFinance

Ministry ofLabour and

Social Inclusion

TheNorwegianPetroleum

Directorate

The PetroleumSafety Authority

Norway

The NorwegianCoastal

Administration

GovernmentPension Fund

- Global

ThePetroleumTax Office

Petoro AS

Gassco AS

Gassnova

Statoil ASA

The NorwegianPollutionControl

Authority

Ministry ofFisheries and

Coastal Affairs


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All income and expenses from Norwegian upstream petroleum operations are consolidated on a corporate level, there is no ring fence between the licences.

The tax system is defined in the law and has been adjusted from time to time to reflect the profitability and the challenges of the industry.

In Norway several initiatives have been taken to improve development efficiency and increase the total value of the petroleum assets though extensive cooperation between the authorities and the oil companies. The initiatives relates to procedures for more cost efficient exploration and development, technologies for increased oil recovery as well as improvement of the administrative structures. The Norwegian experience is that an open policy encouraging transparency and close dialogue between the parties involved creates the best basis for cooperation and good results. It is important that the

objectives of each party are mutually understood and that the work performed among the different partners are based on a common set of incentives. This has proved valid for the cooperation taking place in Norway, and it is also valid for the international cooperation. In this regard, it has been important for Norway to participate in international organisations working to achieve prudent management of petroleum resources and to learn from other countries.

With a proper system for petroleum resource management on company level as well as on govern-mental level the potential for improving the recovery, the efficiency, the security of supply and the total value creation of the petroleum sector is substantial. This is of prime importance for the world at large, particularly for less developed countries where the need for energy at affordable prices are important to support economic growth and reduce poverty.

Photo: Øystein Kristiansen


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5.2 INSTITUTIONAL COOPERATION BETWEEN MOzAMBIqUE AND NORWAy REGARDING GAS METERING

The local authority in Mozambique, Instituto Nationale de Petróleo (INP) has established a fruitful cooperation with the NPD in the field of gas metering. Based on Nor-wegian experience gained over a long period of time, the INP has quickly managed to establish routines for the measurement and reporting, in order to assure the national interests of the gas activities in Mozambique.

A fruitful cooperation has also been established with the operators of the metering systems, who needed to establish competence and procedures to run such large scale metering facilities.

The gas from the fields Temane and Pande in Mozambique is processed at a central Processing Facility (cPF) near the gas fields. Produced gas is transported via a 26 inch steel pipeline to Secunda in South Africa. The pipeline is 865 km long. The operation of the gas fields, the transport and the marketing of the gas is performed by subsidiaries of Sasol, ( South African Synthetic Oil ltd). Sasol has a high level of competence in oil/ gas activities as well as production of chemicals. Adjacent to the South African borderline a pipeline branch is taking a minor part of the gas to an industry area named Matola, close to Maputo. This branch is operated by an independent company. Here the gas is delivered to local industries like aluminium production, food industry etc. A compressed natural gas plant (cNG) is also installed here.

The facility in Temane removes water and condensate from the well stream before the gas is injected into the pipeline. The condensate is transported with roadtank-ers to Maputo, for further shipment to the marketplace.

The production started in 2004. Instituto Nationale de Petróleo in Maputo, (INP) is the government body

responsible for the supervision and auditing of the petroleum activities, including fiscal metering activities. In 2004, regulations pertaining to health, safety, environment as well as resource management was put into force. Included are also requirements for the fiscal metering.

Audits of the fiscal metering systemsThe pipeline system has three fiscal metering points; at the inlet, at the main outlet in South Africa, and at an offtake bringing gas to Matola. The results of the outlet-metering is compared to the inlet metering. The orifice metering system at the inlet is the primary fiscal metering point. At the outlet in South Africa an ultrason-ic metering system is reading the gas volumes received. At the Matola offtake near Maputo a gas turbine meter reads the volumes extracted at this entering the distribution system of Matola Gas company.

The Norwegian Petroleum Directorate´s unit for fiscal measurement has assisted INP in their auditing of the metering systems and the required reporting routines. After production start up, a metering audit revealed frequent deviations from the specified requirement of the system. Sasol quickly managed to establish routines for calibration and operation, commensurable with the steering documents. Also at the Matola offtake, mis-measurement was revealed and remedied. At the Secunda outlet the ultrasonic meters seemed to work well, however a software upgrade for improving the control of the meters was installed after a metering audit.

Pipeline system balance and reporting. The pipeline operator has established a monthly reporting routine, comparing volumes entering into the pipeline with volumes taken out of the pipeline. This report gives the fiscal values, and INP receives a copy. It is a continuous challenge to improve the pipe-line balance further, and this work is still not finalized.

Compressed natural gas container at Matola filling station. INP and Sasol inspects orifice of gas metering at Temane.



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5.3 PETROLEUM DATA MANAGEMENT. instrumental in regulating upstream activities to the benefit of the people - the experience of NPD NPD was established in 1972. Seismic activities had been ongoing for about seven years, and by that year some 80 exploration wells had been drilled. The flow of data was already very large.

The authorities’ need to have access to relevant informa-tion generated by the industry was recognized. Rules and regulations were issued to ensure a sufficient flow of data to the NPD. The NPD staff were ensured access to technical and management meetings between the operator and licensees in all production licences, and a lot of routine reporting and copies of seismic data and well logs were sent to the NPD.

coping with all this data, often available on films and non-digital data formats, was a major challenge for NPD as the data kept growing with the upstream industry activity in general. Efforts were made to establish internal knowledge on how to handle the various types of data and how to organize internal digital databases of core samples, seismic sections and well logs. The NPD man-aged to keep full control of the seismic data acquired on the Norwegian continental shelf by various parties (oil companies and spec companies), and the NPD-systems were continuously enhanced as technology and computer capabilities improved.

The need for information was not limited to copies of the operators´ technical data and records of produced oil and gas. The NPD asked for resource estimates, esti-mates of future production and profiles of present and future expenditures. In addition to this, information on environmental discharges and emissions from the offshore installations were asked for and compiled by the tailor made internal NPD computer systems.

NPD’s ability to work with all this data and top it with internal professional analysis and evaluation compe-tence, made it possible for the Norwegian authorities to build the petroleum policy on a comprehensive fact base, independent from the big companies. The stream of information to NPD also made it possible to calibrate both resource management regulations and fiscal frame condition to the benefit of both the government and the society. A vast information base in combinations with professional competence have never been a draw-back in negotiations on terms and conditions, and there is no doubt that the NPD’s ability to manage petroleum infor-mation has been and is one of the key reasons for the successful management of this sector that has grown to become Norway’s greatest asset. One of the guiding principles in the Norwegian pe-troleum data policy has been to offer as much data as possible to the public. During the 35 years of operation, NPD has published maps, technical, research and statis-tical reports, publications and booklets. Now the NPD

webpages with all its facts and articles have become an important distribution channel. The general information is mostly used by individuals and newspaper journalists, in this way securing the publics need for information in a democracy like Norway. The technical information is used by oil companies, research institutes and entrepreneurs with creative and new approaches to exploration. For the last few years, areas have been allocated to oil companies for the second time after the first companies failed to dis-cover petroleum. In this situation, the value of publishing previous reported information is very much appreciated.

Even if the authorities have encouraged oil companies to trade data among themselves, there is no doubt that the release regulations, which say that all data should be made public after a certain period, have contributed to considerable value creation both for oil companies and society. In this way the authorities keep control of the data instead of leaving this to the commercial interests of “data brokers”. One prerequisite for such a strategy is, however, to continuously spend sufficient resources, build technical IT solutions and maintain a devoted competent staff to manage the systems and keep the quality and com- pleteness in databases and archives. This requires recognition and support from the top management regarding petroleum data management. How NPD’s experience can benefit developing countriesDuring the last years we have experienced that other countries find themselves in the same position as Norway at the end of the sixties and in the early seventies. New petroleum provinces are emerging and the need for inviting international oil companies to invest in petrole-um exploration and production is increasing. Exploration, particularly in deep waters, is very expensive and most nations are dependent on involving multinational oil companies to share risk and rewards. The capacity of national oil companies is normally not sufficient. To organize bid rounds and select the right companies to achieve a balanced risk/reward situation is demanding. It is also more commonly recognised that there is a need for a separate regulatory body when foreign investors get involved. The national oil companies have traditionally pursued both commercial, supervisory and political tasks. But the new situation requires a regulatory body inde-pendent of the national companies.

Operating an expanding petroleum activity requires well planned administrative systems to keep track of all rights and obligations. To achieve quality in such records may be almost impossible if the systems are not properly organized from the beginning. Tedious and costly law suits may be the result of unclear definitions of rights and area management.

Also when preparing bid rounds and awarding


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exploration and production licences to oil companies, the authorities’ knowledge of geological and commercial potential is important. A modern resource classification with independent and reliable data is of vital importance. The combination of professional skills and relevant geological data is a powerful tool for the authorities. A legislation(petroleum act and regu-lations) should be established as early as possible in all petroleum producing countries to ensure a sufficient flow of information to the authorities.

In the process of inviting investors to the country, promotion material is important, and internal produced analysis, data packages and illustrations add preferences in the competition which exists among new petroleum countries. Easy access to data will lower the threshold for oil companies who want to investigate new frontier areas.

What developing petroleum countries need is very much the same as we over time have developed for Norway, such as

• Systems to keep track of obligations and rights• Inventory of resources and potentials• Inventory of petroleum resources and potential for new discoveris• Easy access to data for resource assessment

• Promotion material, technical data and quality statistics for foreign investors • Production and economic data for taxing and statistical purpose• Transparent systems to ease access for a variety of users• Internal skills/petroleum administrative capacity• High quality data for technical and scientific analysis

The NPD has more than 35 years experience with storing data and knows a lot about regulatory agencies. NPD has by tedious trials and errors developed useful systems and methods. The biggest market for software vendors is the oil companies with their different needs. Therefore there are few ”off-the-rack” tools or “black box applications” to be bought for the regulatory bodies. It is NPD’s goal to maintain internal expertise on data management matters, in order to avoid being too dependent on smaller- or world dominating private consulting companies. What NPD offers through cooperation projectsData management projects are often part of institutional co-operation projects between the NPD and similar organizations in other countries. The projects often aim at improving the petroleum administrative capacity and



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the national control of the petroleum activities. Some projects are, however, more specific like establishing seis-mic tape reformatting capabilities or setting up an archive for magnetic tapes containing digital seismic information.

As the scope of the cooperation may involve both Resource Management and HSE (Health, safety and Environment), it is of vital importance to clarify the cooperating organization´s role and relation to other agencies. The data management solution must be tailored to fit the relevant responsibilities, and a realistic level of ambition must be set. The challenge is often to tailor a total solution that can serve different departments in the same agency or ministry, improving communication and collaboration and to avoid double storage of the same data in parallel systems.

As the role of the agency is clearified, the next step is to review the petroleum legislation and to look for possible improvements related to data management. This could be establishing who is entitled to information, streamlining reporting regulations and ensure consistent definitions of rights and obligations.

Experience shows that terminology and definitions used by different departments and professions are often not the same. This needs attention, as any integrated system relies on a shared understanding of terminology. Lack of quality in database solutions is often caused by misunderstand-ings and different use of same words. If standardisation of terminology is neglected, this may back-fire later. As far as international standards are available, these are important input to this work. NPD projects often include workshops involving professionals from different departments and professions (geoscientists, engineers, economists, lawyers and IT-people). The purpose is to agree upon a common understanding of all data types and their relation. Such workshops may also deal with mapping existing work processes in the governmental organization as they influence the data management solution. The product after this exercise is a consistent, multidisciplinary data model. The goal is also to sort out inconsistencies between terminology used in the legislation and the understanding among the technical staff. Agreeing upon a resource classification to be used is also important.

In the projects the NPD representatives together with the local staff construct a MS Access database to store all basic information on companies, contracts/concessions, wells, and seismic surveys. This “pilot database” (sometimes also called “cultural database”) will serve as a reference

database to other detailed technical databases, or as links to vendor data bases (like PetroBank). The clue in such a “national data repository concept” is to maintain a unique identification (ID) which makes the different physical databases behave like one big virtual data warehouse. A long - term solution - a permanent multi-user administrative database based on Oracle or MS-SQL server will later replace the pilot database. Part of the national data repository concept will also involve an integrated geographic information system (GIS). With a populated GIS useful maps can be constructed, accurate licence area management performed and an overview of well locations, discoveries, fields, pipelines etc is available. GIS will also be an impor-tant tool for quality control of old records when informa-tion in old documents are converted into the computer files. NPD strongly recommends generating internal capacity to handle such tools, and workshops and training activities for the local staff are a natural part of the coop-eration programme. Another important recommendation is to select a small group of people to take the role as “data custodians”. These will manage the quality of the various data types, and hopefully over the years represent the continuity and integrity of the information.

According to local needs and publication policy, NPD also assists in establishing internal local infrastructure (LAN and servers) and technical solutions to continuously update an internet homepage with links from the internal databases of administrative data.

The goal of these projects is that the governmental agency over a period of 3 - 5 years, should build their own capacity to maintain the content of the databases, inte-grate this as part of the regular work processes of their regulation role and manage further expansion into new data types, more advanced information technology and possible cooperation with local and international oil companies and data management consulting companies.

countries where the oil activity is about to start, will benefit strongly by building such a data management “foundation” up front of the activities, but we also see that nations with a long oil history can increase efficiency and improve the quality of their national control by applying the principles outlined above.

6 OfD Projects in NPD


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27Photo: Jan Stenløkk


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6.1 A N G O L AProject: Institutional cooperation programme regarding petroleum sector development MINPET – NPD (Phase II)

Cooperating institution: Ministry of Petroleum (MINPET)

Goals: To promote improved management of national petroleum resources as one of the tools for sustainable economic and social development in Angola.

Purpose: Improve capability to exercise regulatory control and to develop policies and strategies to ensure better administration of the Angolan petroleum resources.

The Programme will work in five areas of cooperation:• Regulatory framework• Responsibilities and organisation of MINPET• Data management and information systems• Multi-sector activities• Angolanization and general training

Project period: 2007 - 2010

Total budget: NOK 27 mill

cOUNTRY FAcTS: Official Name: Republic of Angola

Capital: Luanda

Chief of state: President Jose Eduardo dos Santos (since 21 September 1979); The president is both chief of state and head of government

Population: 12 127 071 (July 2006 est)

Petroleum sector, key figures:Average oil production: 1.24 mill bbl/day (2005)Gas production: 8.8 bill m3 (2005)

Organisation of the sector:Ministry of Petroleum Policy, regulatory and supervisory body

Sociedade Nacional de combustiveis de Angola (Sonangol)State owned Oil company.Sole concessionaire and partner in concession agreements and in some PSAs with the international oil companies

Source: PetroView


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6.1

Programme: • Increase MINPET control of activities of oil companies in the execution of petroleum industry operations regarding protection of the environment, safety and health.• Build capacity in different MINPET departments in policy formulation and information management. • Establish petroleum resource database.• Improve administrative IT system.• Prepare Project Proposal on Multi-sector Institutional Support to Oil, Fish and Environment.• Sharing relevant experiences at a regional level.• Revise Decree 20/82 on Angolanization.• Prepare report on how benefits of petroleum exploration in Angola can contribute to improvement of scientific knowledge.• Arrange petroleum technology seminars.• Support research and academic training in Angolan institutions. • Assist Agostinho Neto University with scientific knowledge and equipment to provide oil-oriented academic courses and research projects.

Contact:MINPET: WWW.minpet.gv.aoNPD: Else Ormaasen, Project coordinator, [email protected]

A brief history of the cooperation between MINPET and NPD.Norwegian assistance within the Petroleum Sector in Angola started in 1987 when Norway and Angola signed an Agreement for a four year (1987 - 1991) assistance programme with a budget of NOK 17 million. The assistance was extended in 1991 when a new Agreement was signed for a new period of four years (1991 - 1995) with a budget of NOK 28,5 million. The objective of the Norwegian assistance has been to

assist Angola in institutional competence building to improve the government capabilities to develop, direct and control the petroleum activity. Later, Angola requested continued assistance and the Phase I of a new programme was carried out in the period 2000 – 2004, with a budget of NOK 22 mill.

Activities 2006 - 2007A Phase II of the new programme was planned by MINPET with input from NPD, during the period 2005 – 2006 and a new Agreement between Norway and Angola regarding Technical assistance in the Petroleum Sector was signed 4th of October 2006. Planning of the implementation of Phase II of the new programme was carried out during last quarter of 2006 and the 1st quarter of 2007.

A delegation from Norway together with the Minister of development, Mr Erik Solheim and deputy Minister of Petroleum and Energy Ms. Anita Utseth, visited An-gola early February 2007 for discussion of further coop-eration between Norway and Angola specifically in the petroleum sector. At the same time a delegation from NPD had meetings with MINPET regarding the imple-mentation of the programme activities. The cooperation agreement between NPD and MINPET was discussed during a visit by NPD to MINPET in June 2007.

Plans 2007The agreement between MINPET and NPD is expected to be signed september 2007. The work will start 3rd quarter 2007 with 3 years duration and have a budget of NOK 27 mill. As a starting activity of the new pro-gramme, the NPD has proposed a strategy process to be carried out within MINPET. This strategy process is vital for the performance and success of the different programme activities. The programme will also require a resident technical advisor within MINPET for the dura-tion of the programme as a prerequisite for efficient implementation of the activities.


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6.2 B A N G L A D E S H

Project: Strengthening of the Hydrocarbon Unit (HcU) Project

Cooperating institution: Hydrocarbon Unit (HcU) under Energy and Mineral Resources Division (EMRD) Ministry of Power, Energy and Mineral Resources (MOEMR).

Goals and objectives: The Hydrocarbon Unit (HcU) was set up by the Government of Bangladesh in 1997 under the administrative control of the Ministry of Power, Energy and Mineral Resources. The objective of establishing the HcU was to split the responsibilities for commercial and regulatory governmental functions. Both functions have previously been the responsibility of the national oil company Petrobangla. Actual work on the project started in 1999.

The development objective of the project is to address the need for MOEMR to assume new responsibilities as a result of the arrival of foreign companies for operations in the petroleum sector in Bangladesh under production sharing contracts (PSc), and an increasing commercial role of the state owned petroleum company, Petrobangla.

The Objective of the Project is:Strengthening of the HcU to become a full-fledged functioning, permanent body in the ministry, authorised to:• Implement Government policies and regulations for upstream activities for the petroleum sector• Promote and supervise private sector activities in the petroleum sector.

Programme The programme is concentrated around the following components:• Establish an institutional Model• Establish a revised legal framework• Supervision of license activities• Resource policy and management• Resource assessment• Training and other institutional support activities

Contact:NPD: Mr. Jan Bygdevoll, Project coordinator,

[email protected]

cOUNTRY FAcTS:Official Name: People’s Republic of Bangladesh

Capital: Dhaka

Chief of state: President Iajuddin Ahmed

Head of Government: Prime Minister Khaleda Zia

Population: 147 365 352 (2006)

Petroleum sector, key figures:Average oil production: 3.400 bbl/day (2005) Annual gas production: 14.5 bill m3 (2005)

Organisation of the petroleum sector:Ministry of Power, Energy and Mineral Resources has a division named Energy and Mineral Resources Division (EMRD) which HcU is reporting to.

Bangladesh Oil, Gas & Mineral corporation (Petrobangla) consists of several companies of which three are engaged in explora-tion and production. Some international oil companies (IOc’s) have operations in Bangladesh. This is organised by production sharing contracts with Petrobangla


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6.2

Status of the project:

Phase I-1: Build up period for definition and forming of the HcU including employment and basic training of key personnel.

Phase I-2: Implementation phase, where regulatory, planning and monitoring functions are put to work. Initially the duration of the project was 4,5 years, but due to slow progress it was decided to prolong the project in two

stages until end of June 2005. This also included some extra funding.

Plans for an extended project (Phase II) are being prepared in cooperation with Asian Development Bank (ADB) as a part of ABD’s programme for further development of infrastructure for gas in Bangladesh. This process has been delayed and there has been little activity from the NPD side in 2006. It seems likely that the activity will resume in 2007. It is at the mo-ment unclear which role the NPD will play in the next phase of the project.

Source: PetroView


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6.3 cAMBODIA

Project: Development of cambodia’s Oil and Gas Industry

Cooperating institution: cambodia National Petroleum Authority (cNPA)

Goal: to strengthen cambodia’s ability to govern the exploration and production of its petroleum resources by improving cNPA’s ability to: 1. Write and maintain the legal framework for its upstream and downstream petroleum industry2. carry out bilateral negotiations and establish a legal framework under which two or three neighbouring countries can utilize petroleum resources in overlapping claims areas3. Negotiate petroleum licences with oil companies4. Promote cambodia’s petroleum resources by maintaining a competitive licensing system and model petroleum contracts.

Objectives:• Improve the upstream, mid-stream and downstream petroleum law of cambodia• Finalize agreements with Thailand concerning the Overlapping claims Area (OcA)• Enhance the licensing procedures and Model Petroleum contracts• Improve the Human recourses and organisational structure of cNPA • Increase awareness of the importance of good governance and anti-corruption measures.

Project period: 2006 – 2008

Total budget: NOK 7 mill (USD 1.1 mill)

Programme The programme will be supervised by a resident project coordinator and consists of the following main elements:• Legal framework - Preparation of draft legislation• Bilateral negotiations – treaty negotiations with Thailand regarding overlapping claims area.• Licensing and model petroleum contract.• Organization and human resource development

Contact:cNPA: Mr. Te Duong Tara, Director General, [email protected] [email protected]

NPD: Mr. Gunnar V. Søiland, Project coordinator, [email protected]

Cooperating institutions in Norway: NORAD

cOUNTRY FAcTS: Official Name: Kingdom of cambodia

Capital: Phnom Penh

Chief of state: King Norodom Sihamoni

Head of Government: Prime Minister Hun Sen

Population: 13 881 427 (2006)

Petroleum sector, key figures:No oil or gas production

Organisation of the sector:The cambodian National Petroleum Authority (cNPA), which reports directly to the Prime Minister. Deputy Prime Minister Mr. Sok An is chairman of cNPA


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6.3

Brief history of the project:cNPA has received assistance from Norway related to petroleum governance for several years through projects run through the ccOP organisation. Several employees from cNPA have attended Petrad’s 8-week courses in Stavanger over the years.

cNPA applied to the Norwegian Embassy in Bangkok for aid related to the development of cambodia’s oil and gas industry on February 25th 2004. Petrad conducted a Training Need Assessment (TNA) cNPA in 2004 with the report finalised by the end of the year. Following the re-sults from the TNA, an initiating seminar was conducted in Phnom Penh in March 2005 with representatives from NPD, NORAD, Petrad, cNPA and other cambodian Gov-ernment agencies in addition to several Norwegian and International legal firms. Based on the findings from the seminar a revised application for aid was sent to NORAD on June 7th 2005. The final Agreement between NORAD and cNPA was signed on December 30th 2005.

Activities in 2006The contract between cNPA and NPD for technical cooperation was signed 19.6.06. Tenders for the legal work and for the position as resident project coordinator for the project was then sent out. Among 5 applicants, contracts were finally signed with the Norwegian law firm WikborgRein in agreement with cNPA. Mr Børre Gunnerud was appointed to the position as resident project coordinator and commenced his duties in Phnom Penh on December 5th.

Mr. Gunnar V. Søiland held planning meetings with the Director General of cNPA HE Mr. Te Duong Tara in July and October where the various agreements and contracts were signed. NPD also attended Donors cooperation meeting at the ADB and UNDP office in Phnom Penh in order to assure that the Norwegian funded project are in line with other ongoing and planned Technical assistance projects towards the petroleum management in cambodia.

Plans 2007A series of workshops concerning legal advice is planned for 2007 by the legal advisors from Wikborg Rein. The themes are: Drafting a Petroleum act , creating a downstream market for Natural Gas, Petroleum tax-ation, OcA matters, establising of National Oil company, Supply bases and free trade zone, Government take – securing the values for the people of cambodia. cooperation with UNDP will be established for support to an important seminar in the later parts of 2007 on cambodia’s management of potentially large income from its petroleum recourses. Petrad may be involved in facilitating high level lecturers for this event. Technical assistance and advice for the staff of cNPA is also planned. This includes ability to do geophysical and geological interpretation on digital workstations, understanding and interpreting data and reports received from the industry. Some funds will be spent to improve the IT-situation at the cNPA office, primarily access to the internet in addition to copier/printer/scanner and a Pc.


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6.4 c c O P

Norway has, as a cooperating country, supported ccOP since 1976. From 1989 the support to ccOP has been substantial and Norway has been the major supporter of ccOP’s petroleum programmes.

The Project Petroleum Policy and Management (PPM) project commenced in June 2002 and Project coordinator Mr. Gunnar V. Søiland reported to the ccOP secretariat office in Bangkok for a two year assignment. A regional Project coordinator, Mr. Simplicio P. caluyong from the Philippines was appointed in 2003 and commenced his duty in April 2003. The project was completed by December 2006 and the final report distributed. Planning for a new project with financial support from Norway started in 2006 and NPD and others assisted in this process. The new initiative is called Enhanced Public Petroleum Management (EPPM), and an application to Norway for assistance is expected delivered in 2007.

The PPM ProjectThe goal of the project was to enable government organisations responsible for petroleum resource management in the ccOP member countries to:• establish a sustainable and efficient national petroleum management and policy, • envisage the mechanism and importance in revising and improving their petroleum management and policy arrangements due to changes in political, economic and market conditions, and• enhance their capacity and capability in petroleum resource management

The objectives of the PPM were to transform gained knowledge into efficient petroleum resource management models in the public domain of the ccOP member countries with respect to: • Exploration strategies and licensing procedures• Models and arrangements of regulations and framework conditions for the petroleum industry, and their consequences on the exploration and development activities• Balancing between the government take and the industry profit in order to maximise the economic potential derived from the petroleum resources• Enhancing the expertise in petroleum resource management of member countries• Optimal development of the petroleum resources with good environmental consideration and good management practice


Total budget: NOK 19.6 mill (USD 2.8 mill)

Programme: The case study concept was being introduced to give selected member countries practical experience in integrating resource assessments, resource management and petroleum policy, partly guided by foreign experts.The primary activity in the project consisted of four case studies in cambodia, china, Indonesia and the Philippines. The case studies covered frontier, semi-mature and mature basins, and addressed questions related to gas development, marginal fields problems, and exploration strategies. The main elements of the external support to these case studies were:• Workshops for the case study members in the host countries• Open seminars covering subjects that will support the case studies• Dissemination seminars primarily targeted at the national stakeholders

Contact:ccOP: Mr. Simplicio P. caluyong, Regional Project coordinator, [email protected] Mr. chen Shick Pei, ccOP Director, [email protected]: Mr. Gunnar V. Søiland, Project coordinator, [email protected]

Cooperating institution in Norway:NORAD


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6.4

Impact of project:The final report of the PPM project was completed by December 2006. 47 activities were organised through the project split by 19 case study workshops, 9 Seminars and 19 Expert visits. The total number of participants in the PPM Project is 395 representatives from the ccOP Member countries. The Final Report lists some of the impacts from the project as reported by the National coordinators: a) Improved understanding of the petroleum potential and policies of the ccOP Member countries, especially the case study countries b) Information and knowledge learned are disseminated through reporting and conduct of seminars in the participant’s respective organization c) In cambodia cNPA staff have better understanding of resource assessment and have performed realistic assessment of the Khmer basin. The team that participates in the PPM Project from Philippines and Thailand are members of their investment promotion team and have applied the knowledge learned into their own investment promotiond) The open sharing of experiences of experts in the region during expert visits and workshops are evidence of enhanced (internal) cooperation among Member countries e) Indonesia supported the education and training of cNPA staff at their petroleum training center (PUSDIKLAT MIGAS) in chepu f) Experts are provided by Member countries to address issues and challenges faced a case study country. This, in a way, promotes a “Member country helping another Member country” in ccOP g) PPM is easily implemented based on the lready established network. This network also functions outside the project. h) The experience of the Technical Secretariat in the management and coordinating the PPM project has considerably helped in efficient facilitation of new projects in ccOP.

ccOP activities in 2006 with NPD participation Ms. Mari Kvaal together with Mr. Espen Myhra (MPE) lectured about Petroleum Economy at the 5th Workshop of the Philippines case study in cebu city, Philippines in March.

Mr. Gunnar V. Søiland together with Mr. Egil Meisingset (MPE) lectured about EOR/IOR technology and implications at the 4th Workshop of the Indonesian case study in Jakarta, Indonesia in June.

Mr. Erling Kvadsheim lectured on Knowledge Management at the 5th PPM Seminar in Bangkok, Thailand in July.

Mr. Gunnar V. Søiland participated in a planning workshop for the coming EPPM project in Bangkok, Thailand in October. This planning activity was cooperation between ccOP, NPD, Petrad, PSA and Asian institutions and used LFA (Logical Framework Approach) to formulate the project.

Plans 2007 Surplus funding from the PPM project have been approved by the Embassy to be spent for planning and introductory activities towards a new cooperation program between Norway and ccOP – “Enhanced Public Petroleum Management (EPPM)”. NPD is planning to have an advisory role towards two out of five project elements.1. Petroleum Resource Management with Focus on the Undiscovered Resources (NPD)2. Natural Gas Development and clean Development Mechanism (Petrad) 3. Promoting effective Health, Safety and Environmental Regulations in Upstream Petroleum Sector (PSA)4. Metadata on Natural Gas Resources in the ccOP Region (NPD)5. Feasibility Study of Networking of Petroleum Geoscience Institutes and Organizations in the ccOP Mc One workshop is planned for April with focus on Know-ledge Management and a second in June on Geographic Information Metadata, where NPD is requested to participate. Dependant on approval of EPPM, NPD will participate actively in the implementation of this programme.

Singapore

China

Japan

ThailandCambodia

Vietnam

Malaysia

Korea

Philippines

Indonesia

Papua New Guinea


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6.5 I N D I A

cOUNTRY FAcTS: Official Name: Republic of India

Capital: New Delhi

Chief of state: President A.P.J. Abdul Kalam Head of Government: Prime Minister Manmohan Singh

Population: 1 095 351 995 (2006)

Petroleum sector, key figures:Average oil production: 816 000 bbl/dayAnnual gas production: 32.6 bill m3

Organisation of the petroleum sector:MPNG (Ministry of Petroleum and Natural Gas)DGH (Directorate General of Hydrocarbons)

In December 2004 the NPD participated in the first meeting of the Indian - Norwe-gian Joint Working Group on cooperation in Hydrocarbons together with the MPE. In the meeting it was decided to re-establish the formal cooperation between NPD and DGH that existed for almost 10 years under a particular Indo-Norwegian Programme for Institutional cooperation, which ended in year 2000.

In connection with the visit to Norway in 2005 by the Indian Minister of Energy, Honourable Mr. Mani Shankar Aiyera, an MoU between NPD and DGH was signed. The MoU includes a number of issues for cooperation. The NPD had meetings with DGH during the third Joint Working Group meeting that took place in New Delhi beginning November 2006. Based on this meeting three projects have been identified for joint cooperation in 2007.

1. System for Data/Knowledge Management2. System and Methodology for Resource Assessment and Forecasting 3. Integrated Operations

The “scope of work” for these projects is being evaluated and it is anticipated that work will commence during first part of 2007, subject to fundingbeing available. The matter is under discussion with the OfD secretariat.

Photo: Hans Stokka


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6.6 I R A Q

cOUNTRY FAcTS: Official Name: Republic of Iraq

Capital: Baghdad

Chief of state: President Jalal Talabani; Vice Presidents Adil Abd Al-Mahdi and Tariq al-Hashimi; The president and vice presidents comprise the Presidency council

Head of Government: Prime Minister Nuri al-Maliki

Population: 26 783 383 (2006)

Petroleum sector, key figures:Average oil production: 1.84 mill bbl/day (2005); pre war production (in 2002) was 2.03 mill bbl/day Annual gas production: 17.6 bill m3 (2005)

Organisation of the sector:Ministry of Oil:6 Directorates: Studies & PlanningReservoir & Field DevelopmentTechnicalEconomic & FinanceAdministration & LegalNational Manufacturing

15 operating companies, among them:North Oil companySouth Oil companyNorth Gas companySouth Gas companyOil Exploration companyIraq Drilling companyOil Projects co

Other companies for refining, transport and marketing

Project: Institutional and technical assistance

Memorandum of Understanding with: Ministry of Oil, Iraq

Goals and objectives: Institutional and technical governance assistance within the upstream and downstream petroleum sectors.

Project period: September 2005-December 2007

Total budget: NOK 27.5 mill

Programme The programme consists of the following elements:1. Data Management2. Transfer of technology regarding increased oil recovery (IOR)3. Petroleum sector training4. Industry technology assistance and transfer of experience regarding development of local industry capacities5. Policy

Contact: Ministry of Oil, Iraq,[email protected] [email protected]: Øystein Kristiansen, Project Manager [email protected] Activities in 2006Management/Joint Steering Committee2006 represented a gradual build up of activities under the MoU. The progress in some areas have been slower than expected due to the need to use time to align the expectations as to the expected output from the cooperation. Travelling arrangements and visa applications procedures have also been challenging and the reason for some delays in activities. It is easy to understand that the current circumstances in Iraq make planning difficult.

In general, the parties of the MoU are quite satisfied as to the 2006 achievements.

During the period 8th May - 10th May technical meetings were arranged in Stavanger regarding the sub projects of the programme. The 2nd Joint Steering committee (JSc) was arranged in Stavanger on the 11th May 2006.

Technical meetings were also conducted on the 20th - 22nd November in preparation for the third JSc, which was arranged in Stavanger, November 23rd.

The semi annual meetings with NORAD were arranged in Oslo on the 12th of May and on the 24th of November.

Data ManagementAt the technical meetings in May a revised plan for 2006 was agreed upon with the main aims:• Joint working groups: 2 visits + 1 optional• clean up of legacy data for an Iraqi oil field• Establishment of reporting guidelines for data• Focus on DM strategy in Iraq• Improvement of Schlumberger DM project 1st Joint working group, June 10.6 – 30.6 2006- 5 persons


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6.6 Content:• general introduction to Data Management in NPD, Statoil and Hydro• management of national data centre (Schlumberger – Sinas)• handling of seismic data and clean up of legacy data (Statoil)• handling of well log data and clean up of legacy data (Hydro)

Data – Pilot Field clean UpAims:• To examine data types in detail, identify problems and propose solutions• Establish workflows for seismic and well data and Qc routines• Loading of pilot field data into OEc database from Schlumberger office in cairo• cost estimate for total clean up of pilot field data• Set up guidelines for the handling of legacy data from other fields in Iraq

A significant amount of pilot field well data has now been cleaned up by Hampton Data, for use in final Qc and preparation for data loading (see plans 2007).

Work during the planned second joint working group, delayed until early 2007, will define the cost of the total data clean up. It is hoped that much of the planned seismic data clean up can be done by Iraqis themselves during secondments.

IOR ProjectIn the project IOR has the following definition:“IOR is the planning and execution of measures in-tended to increase or accelerate oil recovery from a field in a profitable manner compared to current plans (including EOR)”.

Technical Sub committee (TSc) meetingsThree meetings were held, in Stavanger (May), in Amman (September) and in Stavanger (November).

Scope of work A general IOR strategy was originally planned. The MoO decision to include only 7 fields in the study led to some redefining of Phase 1 scope of work. However, the project’s overall objectives have not been altered.

It has been a serious challenge in the project to gain a mutual understanding of the expected project results as well as access to relevant data for the planned quick look field analysis.

Joint working groupsTwo joint work periods with Iraqi (3+3) participants and Norwegian experts were arranged in NPD’s offices, Stavanger in May and June. The aim was briefly to assess the status and drive mechanisms of the 6 fields based on available data and simple working tools. Modern work processes including multidisciplinary open discussions on results and uncertainties were incorporated. Preliminary results have been discussed with MoO.

Planning for the third joint working groupDiscussions on the IOR/EOR potential of the fields and short and long term needs which started in the first two groups will continue and be finalized during a third joint working period. This was first planned for August, and then postponed several times. On 30. December MoO confirmed their participation with 10 participants in a workshop to be held in Amman 14. – 18. January 2007.

Additional work by the Norwegian groupAwaiting and preparing for the next joint work the Norwegian group worked on further field assessments and input to a preliminary draft report and informative presentation material.

Reporting from Phase 1The report from the project’s Phase 1 will be finalized shortly after the third joint working group has been arranged, early 2007. Recommendations for further work will be part of the report from Phase 1.

TrainingThe major activity has been the planning of the 18 week training programme for staff from MoO. The draft programme has been completed. A group of 19 participants arrived in cambridge on the 17th of November for commencement of English training with the Bell Institute. Due to practical challenges in getting visa and transport to the UK, 6 weeks training was completed before the group returned to Iraq on 22nd December. Additional English training will be provided for during the training in Norway.

The plan is now to commence the main training course on the 16th of January 2007 for approximately 11 weeks until the end of March.

Industrial cooperation A study tour regarding state of the art technologies within particular fields is designed but has been deferred to 2007.


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6.6 Plans 2007ManagementThe 4th JSc is planned for week 27 in July in Norway and the 5th JSc for November. An important matter for the 4th JSc will be whether Iraq Ministry of Oil will like to propose a new phase of the cooperation programme for 2008 onwards.

Data ManagementWorkshop on Data legislation, guidelines and proceduresDate: Q1 2007To establish reporting legislation (guidelines) for E&P data based on accepted industry standards and conventions.Location: Stavanger, NPD

Data clean up and Qc – On the job training. Seismic and well dataDate: Q1 2007Location: Stavanger and Bergen option Amman.An important task will be the Qc and preparation of the pilot field data for loading to the MoO database.

Data Loading to MoO databaseDate: Q 2 2007(to be decided)Location: cairo and Baghdad

IORJoint Workshop(s)A joint workshop on IOR strategy work will be carried out in Amman early 2007 and if required a second workshop will be conducted. Phase 1 ReportThe phase 1 report is planned for 1st quarter 2007.

Phase 2The phase 2 work will be defined when the Phase 1 report is completed. It is possible that the work will focus on development of some regulatory tools and assistance in commercialization of IOR projects. NPD will at this stage terminate the cooperation with Statoil and Hydro regarding the IOR work.

Training Training Need Assessment (TNA) Workshop A TNA workshop is planned for early 2007 in UAE. MSc programmes and other training needed will be provided within the remaining funds in the programme. Technical programmes of some duration and distance learning are also options to be examined. Petrad is coordinating the training part of the programme.

Vocational TrainingVocational training options are available through Rogaland Kurs og Kompetansesenter (RKK).

High Level Policy Work shopA 3-4 days High Level Policy Workshop proposal for senior managers has been developed by Petrad in cooperation with MPE and NPD. Petrad will assist MPE and NPD in arranging the Workshop. The final plans and timing are not yet in place, but 2007 implementation is most likely. Industrial CooperationA programme for a1 week R&D visit to Norway has been developed by INTSOK / ScANDPOWER. (INTSOK is coordinating the technology transfer part of the programme ).


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6.7 M A D A G A S c A R

Project: Management of oil and gas in Madagascar

Following an application from the President of Madagascar, dated 15.03.05, a delegation led by NORAD visited Madagascar in February/March 2006. The aim was to assess the possibility of conducting a project assisting the relevant authorities building their competence and capacity within the oil and gas sector. NORAD’s proposal regarding launching such a project was presented to the Oil for Development’s Steering committee at its meeting 11.05.06. The Steering committee approved the project, and asked NORAD to proceed with the work.

19.05.06 NORAD requested NPD to prepare a plan for a long term cooperation programme between Madagascar and Norway. Both environment and revenue management should be included as integral part of the cooperation programme as these elements are all parts of the scope for Oil for Development. The programme should indicate a time schedule as well as an overall budget.

A Terms of Reference document was approved 15.08.06 detailing the coming activities and budget. The planning work should be based on:• the application received from the President of Madagascar dated 15.03.2005, updated 01.06.2006• The report from the NORAD delegation to Madagascar 25.02. - 04.03.2006• The Functional and Financial Review of OMNIS, 10.07.2006• Petrad 2005 assessment of Madagascar Petroleum sector• NPDs own assessment of the requirements of • Ministry of Energy and Mines • Ministry of Finance • Office for National Mining and Strategic Industries (OMNIS) • BIANcO

cOUNTRY FAcTS: Official Name: Republic of Madagascar

Capital: Antananarivo

Chief of state: President Marc Ravalomanana

Head of Government: Prime Minister Jacques Sylla

Population: 18 595 469 (2006)

Petroleum sector, key figures:Average oil production: none Annual gas production: none

Organisation of the petroleum sector:OMNIS (Office des Mines Nationales et des Industries Strategiques) who reports toMinistry of Energy and Mines

Activities in 2006:NPD attended NORAD’s Fact Finding Mission to Madagascar in February/March together with NORAD and MPE.

NPD organised a visit to Madagascar together with SFT and FIN in September for drafting the project plan. A series of meetings were held with OMNIS and various government institutions. NPD also attended the Strategic Decision Meeting (SDM) arranged by the Presidency.

As preparation for the first offshore licensing round, two geophysicists from OMNIS spent 2 weeks at NPD in November/December to interpret the newly acquired regional seismic survey from offshore Madagascar. A management delegation from OMNIS and the Presidency also visited Norway for further detailing of the project plan and to have meetings with NPD, PSA and GRID, Arendal.

OMNIS delivered a new project plan and a revised application for cooperation with Norway to the Norwegian Embassy in Antananarivo on 20.12.06.

Contact:NPD: Mr. Gunnar V. Søiland, Project coordinator, [email protected]: Mr. Elisé RAZAKA, Director General, [email protected]


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6.7

Plans 2007NPD will continue to play an active part in order to finalize the overall Programme Document. Based on this NPD and OMNIS will sign an Institutional cooperation Agreement. Signing is expected in May 2007.The activities listed in the Terms of Reference document of August 2006 will be completed by first half of 2007, including both technical and legal sup-port for the offshore round. An UNcLOS workshop is planned for March in Madagascar as preparation for sending a claim to UN for extension of the continental shelf. The Petroleum Safety Authorities will arrange a workshop on Safety Audit methodology for OMNIS in

April and perform a joint audit towards Madagascar Oil later in the year. High level Training will be initiated and organized as Master degree education in Norway for selected staff at OMNIS and 8-week Petrad courses. NPD will select internally a Petroleum Advisor that will stay 2 years in Madagascar in the OMNIS office to ensure good cooperation between Norwegian and Malagasy institutions and ensure individual competence and organizational capacity building. The NPD advisor will commence her duties in Madagascar in June 2007. Activities on all the Programme elements will start fully during second half of 2007 and continue to 2011.

Source: PetroView


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6.8 M O Z A M B I Q U EProject: Institutional Support NPD - INP, New Programme

Cooperating institution: Instituto Nacional de Petro´leo (INP)

Goal: To strengthen the administration of the petroleum resources to enhance economic development and welfare in Mozambique.

Objectives: Further develop the administrative capacity related to petroleum resource management in Mozambique.


Total budget: 41 mill NOK (USD 6.5 mill)

Programme: The programme consists of the following main elements:• Further develop the upstream petroleum legal and contractual framework• Policy and strategy• Monitoring and control • Promotion of exploration acreage• Negotiations and licensing• Assessment of petroleum resources • Management of petroleum data• Administration, Human Resources and Financing

cOUNTRY FAcTS: Official Name: Republic of Mozambique

Capital: Maputo

Chief of state: President Armando Guebuza

Head of Government: Luisa Diogo

Population: 19 685 505 (2006)

Petroleum sector, key figures:Annual oil production: 0.5 mill bbl condensate (2005)Annual gas production: 2.2 bill m3 (2005)

Organisation of the sector:Ministry Of Mineral Resources (MIREM)

Instituto Nacional de Petro´leo (INP) is responsible for promo-tion, licensing and supervision of upstream petroleum operations.

Empresa Nacional de Hidrocar-bonetos de Moçambique (ENH)National Oil company - two daughter companies:

companhia Moçambicana de Hidrocarbonetos (cMH) - Manage Mozambican ownership in Pande - Temane Gas Project

companhia Moçambicana de Ga´sducto (cMG)- Manage Mozambican ownership in the Natural Gas Pipeline from Pande - Temane


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6.8

Other tasks/activities of co-operation may be agreed upon in the Annual Meeting referred to in the 2006 Agreement between Mozambique and Norway.

Contact:INP: Arsenio Mabote, chairman arsenio. [email protected]: Mr. Øystein Kristiansen, Project coordinator, [email protected]

Cooperating institutions in Norway:NORADPetroleum Safety AuthorityPollution control Authority NorwayInstitute of FisheriesPetrad

Brief history of the project:The National Directorate for coal and Hydrocarbons (NDcH) was set up by the Government of Mozambique in 1995 under the administrative control of Ministry of Mineral Resources and Energy. The objective of the Mozambican Government was to split the responsi-bilities for commercial and regulatory governmental functions. Both functions had up to that time been the responsibility of the National oil company Empresa Nacional de Hidrocarbonetos (ENH). INP was estab-lished in 2005 as an autonomous institute under the new Ministry of Mineral Resources. INP took over all functions of NDcH except governance responsibilities for coal.

The New Institutional Support Programme is the last in a sequence of Norwegian support activities to the petroleum sector in Mozambique starting as early as 1983. currently a team of NPD experts, experts from other institutions and international and local consultants assist INP.

The New Programme reflects that the petroleum sector in Mozambique has become much more active with a potential for significant increase also in offshore exploration. Expansion of the natural gas processing and transportation infrastructure is likely to go ahead. The local markets for natural gas is also fast developing. The petroleum sector will remain an important eco-nomic sector in Mozambique for many years and will have significant growth potential. INP, the government regulator, needs access to technical expertise to further develop governance capacity to face the increase in activity and new challenges. The new programme will strengthen the good governance and environmental issues and health and safety support will continue. Regional cooperation will remain important.

Activities in 2006LEGAL/REGULATORY FRAMEWORKA draft Regulation for the Licensing of Petroleum installations was elaborated by INP with assistance of local lawyers and the Ministry of Industry lawyers and is currently waiting for final completion.

A specific Environmental Regulation for the Petroleum sector is being prepared by INP and Ministry of Environment (MIKOA).

POLIcY/STRATEGYA Gas commission has been created by the Republic of Mozambique and the Republic of South Africa to harmonize and facilitate the transportation and com-mercialization of natural gas projects across the border. This commission held two meetings during 2006.

A gas strategy workshop was conducted in December, looking at future scenarios for Mozambican gas. The proven and potential resource base represents interesting options to increase gas and condensate production, both for export and domestic use. Options for further development of indigenous markets for gas should be further investigated.

Several matters including issues regarding gas metering, health, safety and environment, technical standards and pipeline specifications, regulations and thirty party access, tariffs, permits, authorizations and consents were analyzed and discussed. The Gas commission recommended that the new gas regula-tory body of SA and INP cooperate on those matters.

INP has also participated in the commission for the claim of the Extension of the continental Shelf and has contributed in funding training, in Kenya, of technical staff involved in this commission.INP is also cooperating with Petroleum Agency of South Africa (PASA) regarding the extension of the continental shelf. There have been meetings between INP, PASA and the Institute for Maritime and Border Affairs (IMAF) with a view to strengthen mutual cooperation on data ex-change and possible submission of the extension of the continental shelf claim. Apart from meetings, technical staff from INP, IMAF and Empresa Nacional de Hidro- carbonetos (ENH) have been involved in data gathering in preparation of the desktop studies. The above mentioned team has also carried out a reconnaissance field survey to gather data as basis for the digital base line of the Mozambique coast.Guidelines and evaluation criteria’s used for the Licensing round held on Rovuma Basin in 2005/2006 were improved and applied to comply with technical expectation and international practices.

A new block division has been introduced to comply with the Regulation of Petroleum Operations.


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6.8 MONITORING cONTROLINP has monitored through its exploration division the exploration activities performed by DNO, Petronas, Norsk Hydro and Sasol in Inhaminga, Zambeze offshore, Areas 2 & 5 and Pande/Temane exploration area respectively. The National Institute performed early 2006 a Metering audit of the Pande/Temane Natural Gas Venture including the metering system of Ressano Garcia-Matola to secure and control production and gas export activities. As a result of the audit recommendations, Sasol is now on a monthly basis sending volume mass-balancing reports to INP. The accepted level of variance is still discussed with Sasol. NPD is assisting INP in these matters.

INP was part of the environmental and HSE audit conducted in August 2006 at the central Processing Facilities jointly with the Ministries of Environment, Health, Labor and ARA-Sul.

During November 2006 INP conducted an Emergency and Preparedness Planning Seminar of the Matola Gas Pipeline aimed to verify the plans and procedures that the company has for an emergency situation at densely populated areas like Matola. MGc, Sasol Gas and down stream customers like Mozal, Parmalat and others were pleased to discuss safety and emergency matters regarding gas transportation and supply/deliveries. The Petroleum Safety Authority Norway is assisting on H&S issues.

Technical meetings were conducted with the Ministry of Finance, ENH and Sasol regarding tax, royalty gas and reporting issues. Production data was provided by INP to the Mozambique central Bank and the Ministry of Energy.

INP has evaluated the Development Plan presented by Petroline, for construction of a fuel pipeline from Matola to Nelspruit in South Africa.

To build up capacity, INP has trained the newly recruited engineers in regulatory, and environmental matters. A training programme was conducted by NPD and PSA in Stavanger, Norway.

ExPLORATION PROMOTIONINP has produced different promotional material, posters and cD’s regarding the Petroleum potential of Mozambique for the northern part of Mozambique Basin, Búzi gas discovery as well as for the Southern part of Mozambique Basin.

INP also took part in promotional campaigns at major conferences, to attract exploration companies to Mozambique, respectively at 11th African oil and gas, trade and finance conference in Algeria, the AAPG in

Houston (USA) and Sidney (Australia), the Africa Up-stream in cape Town (RSA), Natural gas in developing countries (Qatar), 21st African Geological colloquium in Maputo (Mozambique), and at Extractive Industry Transparency Initiative conference held in Oslo (Norway).

The promotional material is also made available at the INP Web page.

In August 2006 a mini licensing round was launched involving two shortlisted companies. Four bids docu-ments were received as a result of this bidding round.

A Bids evaluation committee was constituted by technical staff from INP, NPD, Eduardo Mondlane University (UEM) and PSA. They evaluated the bids without qualifying any of the bidding companies main-ly due to their lack of adequate offshore experience.

NEGOTIATIONSAs a result of the biding round launched in July last year, for areas in the Rovuma Basin, INP is currently finalizing negotiations of Exploration and Production concession contracts with the final two winners of the bidding round, namely Artumas for area 1 and Petronas for areas 3 and 6.

Apart from that, INP has signed Oil and Gas Exploration Production concessions with British America Natural Gas and Anadarko Energy International, both USA companies, and with ENI from Italy, for the concession of the Sofala Bay, M-10 and Zambeze onshore, Rovuma Basin area 1 and 4 respectively.

INP is also finalizing negotiations with Sasol for the expansion of the cPF and the main pipeline. Plan for Development and Operations (PDO’s) will be submitted to INP for evaluation early 2007 and expected expansion will be finalized in 2009. Simonsen Law has been contracted for legal advice as regards the negotiations and NPD has rendered support in assessing the applications.

RESOURcE ASSESSMENTSUnder the resource assessment task, INP has trained 3 geologists in Basin evaluation in Brazil.

INP carried out the evaluation of Petroleum potential of the Southern Mozambique Basin below parallel 22º south and generated a number of leads which were compiled and introduced into the Geographic Information System.

DATA cENTREThe Data centre has copied seismic data to companies involved on the Rovuma Basin bidding round namely Petrobras, Petronas, Hydro, Rockover, LNG, Global, Es-


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sar, ENI, Artumas, and British Gas as well as Mozambique Basin data to the British company Petrolimpopo.

The Data centre has also carried out the quality control of the core storage database and integrated this information in an excel database.Relevant reports on Southern Mozambique Basin were scanned and integrated in an existing database.

The data centre has finalized a draft regulation and guidelines for internal use of data in reports at the data centre as well as standards and formats of data to be submitted to INP from oil companies.

In order to maintain the Resource Assessment operations at INP, the data centre has renewed licenses for the Geo-graphix seismic interpretation software and has acquired a license for the SMT software used in the evaluation of the Petroleum potential of the Southern Mozambique basin.

INSTITUTIONAL DEVELOPMENTDuring 2006 INP put special focus on training its staff. The Following courses took place:

Basin analysis course has been conducted for 3 geologists of the exploration division. For all the Exploration Division staff an on the job training of the evaluation of the Petroleum Potential of the Southern Mozambique Basin was carried out.

One technical staff participated at a course, carried out in Kenya, on the extension of the continental shelf in order to take part in a technical team dealing with this matter.

A course in loading of Seismic data was also carried out in preparation of the starting of the evaluation of the Petro-leum Potential of the Southern Mozambique Basin.

Training on auditing and Environmental Impact Assessment evaluation took place during November 2006 for the Projects and development division staff.

Two new engineers were hired and submitted to training in NPD/PSA in regulatory practices, auditing and evaluation of EIA processes.

Plans 2007Important activities planned:

• Further minor improvement of regulatory framework, main focus on environmental regulations. Legal training of INP and associated institutions.• Follow up the work in the bilateral Gas Trade commission.• Participation in the Extension of the continental shelf project.• Follow up of Sasol plans for Pande/Temane condensate fractionation, transport and sales.• Assess options for further gas market development and optimalisation of gas infrastructure.• Provide policy assistance to MIREM.• Follow up of Sasol plans for expansion of Pande/ Temane processing and transport system based on increased reserves.• continued training and work on resource assessment, development of the GIS system and resource inventory system. • Plan further promotion. • Follow up seismic data collection and possible offshore drilling (Zambezi).• Perform metering audits and implement training in such auditing.• Improve administration of royalty payments in cash or in kind on gas/condensate.• HE&S audit on the Pande Temane Gas System and on offshore drilling (optional activity).• Provide information regarding the interaction between oil, fishing, tourism and environmental issues. • Provide assistance to MIKOA.• Secure analogue data – plan core storage.• Maintain high IT services – cooperate with TPDc.• Improve accounting and budgeting, document handling, information services and library services.• Undertake training and organisational development.

6.8



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6.9 N I c A R A G U A

Project: Assistance to Petroleum Sector-Phase IV

Cooperating institution: Instituto Nicaraguense de Energia (INE)

INE is the state organization which is responsible for regulations, norms, control and taxation of the electricity and hydrocarbon sectors. The main cooperation between the INE and the Norwegian Petroleum Directorate (NPD) is connected to the Department of Hydrocarbons in INE (Direccion General de Hidrocarburos, DGH), which is regulating both the upstream and downstream activities. By 1. March 2007, the hydrocarbons division of INE has been trans-ferred to the Ministry of Mines and Energy, and Vice Minister Lorena Lanza is in charge of the division.

Goal: to contribute to the economic and social development and poverty reduction by identifying and developing new fields in the use of the country’s natural resources,

Objective: to contribute to secure an environmentally sound exploration and possible exploitation of petroleum resources by creating capacities, at Nicaragua’s government level.


Total Budget: NOK 2.25 mill

cOUNTRY FAcTS: Official Name: Republic of Nicaragua

Capital: Managua

Chief of state: President Daniel Ortega Saavedra (since January 2007). The president is both chief of state and head of government.

Population: 5 570 129 (2006)

Petroleum sector, key figures:Average oil production: 0 Annual gas production: 0

Organisation of the sector:In 2007, the former INE has been transferred to the Ministry of Energy and Mines (cNE), which is regulating the hydrocarbons sector


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The programme Specific objectives are:• Updating of the petroleum database• Implementation of the monitoring system• Analysis of new seismic data• Updating and improving of the national contingency plan for emergencies related to the exploration and exploitation activities• Training to INE’s staff through seminars, work-shops, and courses abroad• New promotional campaign

Major risks:• There is the possibility, but with a low probability, of external risks related to political unrest.• There is a low probability for institutional risks, such as loss of qualified staff assigned to the Programme and affected recurrent costs as a result of budget limitations after the end of the Grant period.

Contact:cNE: Lic. Lorena Lanza, Vice Minister, Ministry of Energy and Mines, [email protected] Ing. Veronica Artiles, Head of Petroleum Information Department, [email protected]: Mr. Fridtjof Riis, Project coordinator, [email protected]

cooperating InstitutionNORAD Brief history of the projectThe institutional cooperation between the INE and the NPD was initiated in 1989, as a part of support to the petroleum sector. No petroleum exploration had taken place in Nicaragua since the 1970’s. In the first phase of the programme (1989-1995), it was prioritized to organ-ize and enlarge the existing data base and to evaluate the petroleum potential in order to prepare for renewed exploration. The programme has been prolonged in order to continue the institutional cooperation during the licensing round, negotiation phase and the following up of the new licences. The licensing round is based on the recent Petroleum Act, which was elaborated with the support of the Inter American Development Bank, and approved in 1998.

The main specific objective of the phase III of the cooperation was to assist INE in their first licensing round in 2003 and the negotiation of exploration and production licences in 2004-2005. INE entered into negotiations with 4 companies. In 2005 one license contract has been signed with one company, Oklahoma-Nicaragua SA (Indoklanicsa), in the onshore Pacific. In 2006 further three contracts were signed with the companies MKJ and Infinity for 4 areas in the caribbean Margin. The Indoklanicsa onshore concession is now operated by the canadian company Norwood, which started a drilling campaign in the end of 2006. An oil and gas discovery was reported in February 2007. The situation of the concessions in the caribbean is presently being discussed by the central government and the local authorities of the caribbean side, and there has been no exploration activity there.

The current programme is a prolongation until 2007 of the institutional cooperation between INE and NPD. The cooperation continues with technical assistance and training. The contract for the cooperation will be signed in 2007

Activities in 2006In 2006, there was no NPD activity of significance, since the political situation prior to the elections has not been clear. NPD has been in contact with INE and with the embassy to follow the process of establishing the new phase IV of the programme.

Costs 2006No costs to be reported.

Plans 2007 The Nicaragua project is awaiting the signature of the contract between cNE and NORAD. It is expected that the project will start up in the end of the second quarter, and that it will involve training, assistance on updating of the data base systems, assistance in monitoring of the exploration activity and setting up a contingency plan. It is expected that the project will need approximately 4 weeks of assistance. A further delay cannot be ruled out.

6.9


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6.10 N I G E R I A

Project: Institutional cooperation

Cooperating institution: Department of Petroleum Resources (DPR)

Goals and objectives: The objective of the institutional cooperation is to establish a base for transfer of knowledge and experience between Norwegian petroleum authorities and the petroleum authorities of Nigeria. The long-term institutional cooperation within the framework of this programme will support the development and control within the Oil and Gas sector. The programme will cover petroleum policy, methodology for administration and technology. A strategy based on existing policy, structure for administration and technology, is established.


The programme • Resource management• Production monitoring• Metering• Data management• Deep water technology• Health, safety and environment

There is a need for support to assure the full implementation of the issued Regulations and Guidelines. There is also a need to ensure that the skills transferred both at the organisational and individual levels are put to use. It is the intention to transfer the relevant parts of the Norwegian experiences into the Nigerian petroleum governance process.

Total budget:Norway: NOK 15 millNigeria: USD 300 000

contact: Mr. D. O. Irrechukwu, Head Technical Services Mr. Olu Akinyosoye, Directors OfficeNPD: Mr. Steinar Njå, Project Director [email protected]

cOUNTRY FAcTS:Official Name: Federal Republic of Nigeria

Capital: Abuja

Chief of state: President Olusegun Obasanjo (since 29 May 1999). The president is both the chief of state and head of government

Population: 131 859 731 (2006)

Petroleum sector, key figures:Average oil production: 2.52 mill bbl/day (2005) Annual gas production: 64.8 bill m3 (2005)

Organisation of the petroleum sector:Ministry of Petroleum Resources,Policy and final regulatory powers

Department of Petroleum Resources (DPR)Licensing, supervision and control of the petroleum sector

Nigerian National Petroleum companyState owned autonomous entity


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Activities in 2006The activities performed during 2006 were based on the plan adopted during the PSc meeting held in Stavanger in October 2005 and finalised during the planning meet-ing in Lagos in February 2006. Due to the reorganisation of DPR in 2005, the new director of Mr. Tony chukwueke wanted to emphasis the following areas for further cooperation.1. Gas projects activities2. Data Management activities3. Post-Mortem of the 2005 bid process4. Identification of skill-gaps in DPR5. HSE activities

Regarding Gas projects activities, a seminar was conducted in Port Harcourt late 2004. Based on the recommendations from this seminar several related activities have been performed in DPR and a dedicated department has been established to focus on this issue. The aim is to establish a sound gas policy for Nigeria in order to make an efficient utilisation of gas produced and to reduce flaring. In this regard, representatives of DPR have been introduced to the Norwegian gas policy and the experience gained in Norway in connection with gas production and utilisation. In November 2006 a workshop was held in Lagos discussing topics related to regulations for gas production, flaring, transporta-

tion, and metering. The workshop was attended by 15 representatives from DPR and 5 from NPD. During this workshop topics related to pre-licence activities and production monitoring were also discussed. A set of recommendations for further cooperation in this area have been drafted. A metering audit at the gas receiving facilities on Bonny Island, and a workshop on Monitoring of Deep Water Operations have been planned for some time. However, due to difficulties with timing and neces-sary arrangements these, activities are still pending.

Data Management activities are considered to be one of the most important cooperation activities. Since coop-eration started in year 2001 the data management group in DPR has been working on adopting a sound policy for information and data handling in DPR. A digital platform for information has been established both as a basis for activities inside DPR and for the planned cooperation with the oil companies for storing seismic and techni-cal well data. Systems and methodologies for quality control, access and retrieval of petroleum administrative data are in place. Solutions are based on experience gained in Norway as well as in many other oil and gas producing countries. Formulating the data management strategy also included proposing concrete modifications of the petroleum regulations. During the spring 2006 training of 10 representatives from DPR in use of GIS


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6.10

(Geographical Information System) took place in the London area. In August a Workshop on pipeline data was conducted in Stavanger. During this workshop four representatives from DPR participated. Later on, in October, two experts from NPD worked together with DPR staff in Lagos to assist in setting up the right procedures for data storage and use of cultural data.

In connection with the Nigerian 2005 License Bidding Round, in August 2005, Mr. Willy Olsen from Norway served as observer during the bidding process that took place in Abuja. An assessment of the 2005 bid process was conducted in Lagos late January 2006. During this assessment representatives from several oil companies and embassies in Nigeria participated, included the British, canadian and USA embassy. In general the assessment proved that the bidding process had been open and transparent. How-ever, some points for improvement were noted and will be adopted by DPR for future bidding processes.

During 2005 a reorganisation took place in DPR. The intention was to make the organisation more up-to-date and more focused on the important challenges facing Nigerian petroleum administration. NPD was in that regard asked to assist in performing an Identification of skill-gaps in DPR. On behalf of NPD, Petrad offered to perform an evaluation of the new organisation and drafted a ”scope of work” for this purpose. However due to lack of data and uncertainties connected to the new organisation the project has not yet been activated as intended.

HSE (Health, Satety and Environment) is an important part of the NPD/DPR cooperation. Several activities in that regard have been conducted under the pro-gramme. A new strategy for adoption of HSE measures and monitoring of the petroleum activity has been established and current regulations will be revised ac-cordingly. In August 2006 a workshop in Stavanger was organised and five representatives from DPR attended. The workshop was combined with special safety- training course conducted by Falck- NUTEc. The results of the workshop and the training gave relevant infor-mation and input for the DPR participants to be utilised when drafting new HSE regulations for the Nigerian petroleum activity. A workshop and training arrange-ment for Oil Spill Monitoring in Norway was originally planned for. However, due to time constraint this activity has been postponed.

In connection with the assessment of the 2005 bid process, a planning meeting was held in Lagos late January 2006. Several activities were then scheduled to take place during the first half of the year. However due to time constraint some activities were postponed. A PSc Meeting was arranged in Lagos late May 2006. In that connection the work programme for the rest

of the year was decided. It was also decided to ask for a continuation of the programme for 2007 within the limit of funds granted. The continuation was decided in a meeting with representatives from the Norwegian Embassy in Nigeria and NORAD held in Oslo early June.

Plans for 2007Recommendations from the 2006 activities have to a large degree formed the basis of the 2007 plan. A planning meeting was organised in Stavanger late January this year. As a result of the meeting the following activities are planned:

1. Training Need Assessment (TNA). This activity is cited as the main priority for 2007 and is planned to start February 2007

2. Data Management. This activity will include review & validation of previous work including new digital reporting formats, perform-ing a pipeline modelling workshop, training on multi user database forms & reports as well as a study of ESI mapping & Oil spill monitoring system in Norway.

3. Resource Management. This activity will include workshop on deepwater operations monitoring involving regulators and operators in Nigeria. This will be followed by deepwater operations training attachment in Norway. Also acquisition of appropriate software/ hardware for resource assessment, project analysis & economic evaluation for crude oil and gas are being evaluated. compatibility between reservoir evaluation & economic evaluation packages are required.

4. Gas and metering. To build on the 2006 November seminar this activity will start with a workshop & interactive session in Nigeria on open access policy, gas pricing & tariff system. Further on it was agreed that NPD should evaluate and perform Qc of gas regulation/ guidelines being developed by DPR. Also an attachment programme with NPD/Gassco for hands-on training on the Norwegian solutions will be proposed. Metering will also be a part of this workshop. DPR aims at instituting comprehensive and reliable systems for metering. Gas measurement issues, allocation, and audit procedures are regarded to have first priority.

5. HSE. The development of guidelines & standards for safety practices for oil & gas industry in Nigeria is continuing. Representatives from PSA are asked to evaluate draft regulations before further training and a possible attachment programme is decided.


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6.11 S A O T O M E A N D P R I N c I P E

Project: Under discussion

Cooperating institution: Agencia National do Petroleo (ANP)

Contact: Luis Prazeres, ANP, [email protected]

Øystein Kristiansen, NPD, [email protected]

Jan Bygdevoll, NPD, [email protected]

cOUNTRY FAcTS: Official Name: Republica Democratica de Sao Tome e Principe

Capital: Sao Tome

Chief of state: President Fradique de Menezes (since 3 September 2001)

Head of Government: Prime Minister Tome Soares da Vera cruz (since 21 April 2006)

Population: 193 413 (July 2006 est.)

Petroleum sector, key figures:Average oil production: 0 Annual gas production: 0

Organisation of the sector:Ministerio dos Recursos Naturais e Meio Ambiente

Agencia Nacional do Petroleo(National Petroleum Regulator)

Autoridade comjuncta Nigeria - Sao Tome e Principe(Responsibility for Jointly Operated Zone with Nigeria)

Source: PetroView


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6.11

Brief history of the project

Ministerio dos Recursos Naturais e Meio Ambiente applied for support from Norway in 2004 and 2005 within the following three areas:• Training• Sharing of experience and expertise within petroleum resource management• Increased transparency and elimination of corruption

A fact finding mission to Sao Tome and Principe was conducted in July 2005 and a new vist was made in October. A study tour was then arranged in Norway for 8 parliamentarians from Sao Tome and Principe at the end of November / beginning of December 2005.

Activities in 2006A delegation of 6 persons from ANP for visited NPD 18th and 22nd September 2006 to learn more about petroleum sector supervision and governance. At the same time the elements of a long term support to Sao Tome and Principe were discussed.

Based on the discussions a full request document was prepared and sent to the Embassy in Angola and to NORAD. During the EITI conference in Oslo ANP and NPD completed the request documents. The application was presented to Minister for Development Assistance Erik Solheim on 17th October. The response was positive.

Several donors are supporting the petroleum sector in Sao Tome e Principe. A long term support will have to be coordinated between the main donors.

Mr Teixeira of ANP followed the Petrad 8 week course in Stavanger this fall.

Plans 2007The plans are depending on the final decision regarding support to Sao Tome and Principe under the OfD initiative.

The decision will very much depend on which support is given by other donors and meetings with other donors are planned.


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6.12 S O U T H A F R I c A

Project: The South African Petroleum Sector Policy and capacity Building Project

Cooperating institution: Department of Minerals and Energy (DME)Petroleum Agency South Africa (PASA)

A business plan was developed between DME’s Hydrocarbon and Energy Planning chief Directorates (HEPcD) and Norwegian Water and Energy Directorate (NVE) in 2006. NPD, Petroleum Safety Authority (PSA) and PETRAD will assist NVE in implementing the business plan.

The PASA/NPD business plan is still under discussion.

DME Objectives: To develop a dynamic and perpetual integrated energy plan and associated human capacity which will, amongst other more general energy imperatives, promote reliable and consistent supply of liquid fuels to consumers.


Total budget: 6.4 mill NOK (HEPcD business plan)

DME Programme The areas for cooperation and assistance:• Legislative operationalisation• Integration of current energy sector plans• Implementation of integrated energy planning in South Africa• capacity building ContactDME: Mark Beare, RSA 3001 Programme Manager [email protected]: Mthozami xiphu, chief Executive, [email protected]: Kjell Repp, Project coordinator, [email protected] NPD: Øystein Kristiansen, Project Director, [email protected]

cooperating institutions in NorwayNORADNVEPSAPetrad

Brief history of the projectThe present project is a continuation of energy cooperation between RSA and Norway that was initiated in 1996.

The full 2006 - 2009 programme is estimated to cost NOK 35 mill.

Part of the programme is specifically focused on general energy issues which in Norway are handled by NVE. This part is not included in this report.

The last component of the programme, the PASA business plan, will focus on upstream hydrocarbon issues. We expect this component to be ready for implementation during second half 2007.

cOUNTRY FAcTS: Official Name: Republic of South Africa

Capital: Pretoria (cape Town is the legislative centre and Bloemfontein the judicial centre)

Chief of state: President Thabo Mbeki (since 16 June 1999); The president is both the chief of state and head of government

Population: 44 187 637 (2006)

Petroleum sector, key figures:Average oil production: 28 000 bbl/day (2005) Annual gas production: 2.0 bill m3 (2005)

Organisation of the sector:Ministry: Minerals and Energy Department: Minerals and Energy (DME)central Energy Fund (cEF) The state holding company for:

• Petroleum Agency South Africa - the upstream regulator

• PetroSA - the state oil company

• iGas - the state company for natural gas

• Energy Development corporation - state company for renewables

Regional Mining Offices (H&S)


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6.12 Activities in 2006Some capacity was used in 2006 to support PASA in the planning of their sub Business Plan under the South African Energy Sector Policy and capacity Development Programme. This part of the programme is delayed compared to original plans.The PASA cEO, three managers and a representative from DME visited NPD from March 20 - 24 for discussions of issues regarding upstream petroleum governance, and whether Norwegian experience can be of relevance to South Africa.

A delegation from DME visited Norway from December 4 - 8 for an energy regulation workshop. The workshop was designed by NVE, NPD, PSA and Petrad. MPE, Statoil, Gassco and Gasnor also contributed to a very comprehensive and interesting programme.

Plans 2007We expect that all parts of the new programme will start up during 2007, making this programme a total energy

sector programme covering electricity, renewable energy and petroleum. NPD will continue to support the final planning of the PASA sub business plan.

The possible areas for NPD support to PASA:• Transfer of relevant expertise to PASA• Assistance to PASA in mapping areas of work where more capacity and competence are needed (possible assistance from PETRAD)• Training assistance, particularly regarding geological interpretation, resource assessment and the development of a resource inventory• Possible support regarding development of regulations and supervisory methodology• Possible support regarding data management• continued support regarding the delineation of the continental shelf In addition NPD will assist NVE in their implementation of the Business Plan with programme DME /HEPcD.


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6.13 S R I L A N K AProject: The Delimitation of the Outer Edge of the continental Margin of Sri Lanka under the United Nations convention on the Law of the Sea (UNcLOS).

Cooperating institution: The Ministry of Fisheries and Aquatic Resources (MF&AR). High Level Task Force appointed by the Government to manage and execute the project which is located at National Aquatic Resources Research and Development Agency (NARA)

Goal: to assist Sri Lanka to delineate the Outer Edge of the continental Margin of Sri Lanka in terms of the UN convention on Law of the Sea (UNcLOS).

Objective: to conduct a seabed survey and aquire seismic and other geographical data pertaining to the continental margin enabling Sri Lanka to submit documentation to the United Nations commission on the limits of the continental shelf.

Project period: 10.2.2004 - 31.12.2008

Total budget: NOK 37 million

ProgrammeThe programme consists of the following elements:

1. A desktop study of the outer edge of the continental margin of Sri Lanka with focus on data required and the data available in the public domain.2. Establishing a National Project (DEOcOM) and associated infrastructure to manage data acquisition, processing and interpretation, as well as the preparation of the final submission of the outer limits of the continental shelf of Sri Lanka to the UN commission on the Limits of the continental Shelf (cLcS).3. Planning and executing activities to acquire necessary additional data4. Training of necessary Sri Lanka scientific and technical staff ContactDEOcOM: Dr. N. P. Wijayananda [email protected]: Mr. Harald Brekke and Mr Morten Sand [email protected] [email protected]

cooperating institutions in NorwayNORAD

Brief history of the projectThe project was planned for start up in 2004, but the work on contractual arrangements took more time than expected and only some procurement work regarding the resident advisor commenced in 2004.The resident advisor took up his position with DEOcOM in 2005. NPD is the contractual partner for the advisor. A tender process for acquisition of seismic data was initiated and finalized during the autumn of 2005.

cOUNTRY FAcTS: Official Name: Democratic Socialist Republic of Sri Lanka

Capital: colombo; Sri Jayewardenepura Kotte is the legislative capital

Chief of state: President Mahinda Rajapakse (since 19 November 2005); the president is considered both the chief of state and head of government

Population: 20 222 240 (2006)


Organisation of the sector:Ministry of Power and Energy

Ministry of Fisheries and Aquatic Resources

National Aquatic Resources Research and development Agency (NARA)



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6.13Due to an increase in the global rates for this kind of seismic services, it became necessary to apply to NORAD for additional funding in the form of mixed credits to the amount of USD 2 mill.

Activities in 2006• GGS was awarded the contract for acquisition of seismic data, making use of the Russian vessel Mezen. Due to a legal claim against the vessel the acquisition of data failed. • A new bidding round for procurement of seismic services was arranged in the period july- september 2006. The Belgian company GEMS was chosen by the Sri Lankan government as winner of the assignment. Unforeseen problems have so far hindered finalization of the contract between the parties regarding the acquisition.

Plans 2007• Advice and support during the ongoing contract process for acquisition of seismic data• Supervision of the data collection, when it starts, hopefully in May• Extension of contract for resident advisor• Advice to the DEOcOM project in colombo regarding the drafting of the Sri Lanka claim to the United Nations commission on the limits of the continental shelf


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6.14 T A N Z A N I A

Project: Support to Petroleum Data Archive for Tanzania operated by TPDc

Cooperating institution: Tanzania Petroleum Development corporation (TPDc)

TPDc was formed in 1969. The primary role was to oversee the operations of Agip. Following the discovery of the Songo Songo Gas field, and subsequent relinquish-ment by Agip, TPDc undertook the further appraisal and planning of the commercialisation of the gas field. TPDc is now geared to managing Songo Songo interests as well as exploration in other basins in the country. The mandate of the corporation is to spearhead, facilitate and undertake oil explo-ration and development in Tanzania.

Goal: Increased social and economic growth in Tanzania through efficient exploration and exploitation of the petroleum resources in a sustainable way.

Objective: To enhance the quality and capacity of the National Archive of Petroleum Data in TPDc, Dar es Salaam, to transcribe, store and manage all relevant petroleum data which the upstream petroleum industry need to operate efficiently in Tanzania.

Project period: January 2005 - December 2007

Total budget: NOK 1.94 mill

ProgrammeThe programme consists of the following main elements:• Quality control of seismic tape archive• Upgrade equipment and facilities• Upgrade and training, seismic archive location system• Enable in-house transcription from old to new media• Regional cooperation with Mozambique on transcription Contact:TPDc: Omary Mtunguja, Principal Geophysicist, [email protected]: Øystein Kristiansen, Project Manager/Jan Allan Eide, Project coordinator [email protected] [email protected]

Cooperating institutions in Norway: NORAD

Brief history of the projectNORAD has previously supported the establishment of a Petroleum Data Archive at TPDc in Dar es Salaam from 1985 to 1997 under the TAN051 project. At that time considerable resources were used to reformat Tanzanian petroleum data to more modern storage media. The data project was part of a larger project, which also focused at supporting the commercialisation of the Song Songo Gas Project. Unfortunately the project was not continued at that time by NORAD and both the support to the Petroleum Data Archive and the assistance to MEM for the Songo Songo terminated.

NPD still has some of the old TPDc data in our data storage and we have since 1997 been in the position to cover priority needs for copies of data when TPDc has requested such support.

cOUNTRY FAcTS:Official Name: United Republic of Tanzania

Capital: Dar es Salaam Legislative offices have been transferred to Dodoma, which is planned as the new national capital; the National Assembly now meets there on regular basis

Chief of state: President Jakaya Kikwete. The president is both chief of state and head of government

Population: 37 445 392 (2006)

Petroleum sector, key figures:Oil production: 0 Annual gas production: 416 mill m3 (2005)

Organisation of the sector:Ministry of Energy and Minerals of Tanzania (MEM)

Tanzania Petroleum Development corporation (TPDc)National oil company responsible for promotion and to facilitate and undertake oil exploration and development in Tanzania


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6.14 The current project to revitalize the Petroleum Data Archive received the initial support from the INP institutional support programmes in Mozambique, supported by the Embassy in Maputo and the INP chairman Mabote. The project has greatly benefited the regional cooperation between the two Petroleum Data centers in Maputo and Dar es Salaam. There is at the moment increasing interest for exploration in East Africa. capacity to provide old data to the international petroleum industry and capacity to receive new data for registration and storage is therefore very important.

Activities in 2006Training of operators and maintenance personnel was initiated in February in parallel with hardware maintenance by TSS engineers. Not all maintenance could be undertaken in DSM, two 4280-drives were shipped to Norway for repairs.

The meta-database containing all project inputs has been brought up to date.

Tape drives returned to TPDc in May. One found to be working

June, one IBM 3590 – drive developed problems and was decommissioned. Remaining 3590 was used for both integrity and copying.

Additional hardware maintenance was done by Khangela consulting during a 10 day period in August. Integrity check of random inputs was initiated.

TPDc personnel have run integrity tests on enough input (10 per cent - i.e. 400 items) tapes to ensure that the data, in general, has not deteriorated. This has been time consuming due to varying TANEScO power sup-ply and the fact that only the single loader 3480 was running. The use of an in-house generator has enabled progress. The results of this testing is promising as the tapes have been found to be readable although some inconsistencies between label-info and actual data on tape occur. Scanning of observer reports and other documentation is well underway, but had to be halted due to lack of discspace. More disc capacity will have to be purchased.

A data set copied from 3480 to 3590 has been produced on request from Petrodel Resources in connection with a Production Sharing contract (PSA) with TPDc and the Government.

Plans 2007Start of full scale reformatting of all project 3480s to 3590 is planned for April 2007.

Initiation of new database for 3590-outputs.

Additional disc capacity will be installed.

Installation of additional 3590 and maintenance of existing hardware will be undertaken.

Source: PetroView


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6.15 T I M O R - L E S T EProject: Assistance in developing the management of the Petroleum Sector in Timor-Leste

Cooperating institution: Ministry of Natural Resources, Minerals and Energy Policy (MNRMEP)

Goals and objectives: The Goal of the Project is to assist in developing the management of the petroleum sector in Timor-Leste, such that the public sector petroleum administration will be capable of managing the upstream petroleum activity without significant use of foreign advisors. This will be done by institutional cooperation between NPD and MNRMEP and associated institutions in Timor-Leste performing petroleum sector management functions such that the Norwegian experience of developing a public sector petroleum administration can benefit Timor-Leste, and such that NPD’s technical expertise and other Norwegian and international expertise can be utilised in developing a well-functioning petroleum administration.

Project period: 2003 – 2008 Total budget: NOK 44.5 mill (USD 6.8 mill)

Programme:The programme consists of the following main elements:Education and training: Formal training at university and high-school level in petroleum related topics, short courses and workshops in selected topics and courses in basic and technical English.Advisers: Advisers on long-term assignments in the MNRMEP and associated institutions who will assist in developing the petroleum management, transfer knowledge to Timorese counterparts and carry out managerial and technical tasks. The advisors will primarily be in the fields of institutional development, law, policy, resource management and financial management.Data management: Develop petroleum data management systems, including provision of computer equipment and physical data storage facilities. Technical assistance: NPD/PSA will on an ad hoc basis provide technical assistance within resource management, data management and health, safety and environmental issues. Other Norwegian or international experts will be used as required.Workshops: Technical workshops in selected topics will be conducted throughout the project.

Contact:MNRMEP: Mr. Amandio Gusmao, Director of Oil, Gas and Energy, [email protected] Mr. Roger White, Project Manager, [email protected]: Mr. Erling Kvadsheim, Project coordinator, [email protected]

Summary of the activities in 2006The support to MNRMEP in 2006 included:• Implementation of the first bidding round in freeTimor-Leste and establishing procedures and plans for the National Directorate for Oil and Gas (DNPG) for administering the PScs.• Establishing a capacity development plan for DNPG.• continued the work of establishing a national database for the petroleum sector.• Drafting of rules and regulations.• continued support to six scholarships for degree studies at universities in Australia and Norway. Four at University of Western Australia, one at University of Stavanger and one pending.• Small grants programme for support to Timorese students in Indonesia.

cOUNTRY FAcTS:Official Name: Democratic Republic of Timor-Leste

Capital: Dili

Chief of state: President Kay Rala xanana Gusmao

Head of Government: Prime Minister Jose Ramos-Horta

Population: 1 062 777 (2006)


Production from Timor Sea JPDA (see below):Average oil production: 116 000 bbl/day (2005)Annual gas production: 142 mill m3 (2004)

Organisation of the sector:Within sovereign Timor-Leste petroleum policy, execution and follow-up, including HSE-issues are the responsibility of the Ministry of Natural Resources, Minerals and Energy Policy. Environmental issues are the responsibility of Division of the Environment, which report directly to the government, but is expected to be transformed to a ministry.

The Timor Sea Joint Petroleum Development Area (JPDA) is administered by the Timor Sea Designated Authority (TSDA) under a Treaty between Timor-Leste and Australia. Timor-Leste gets 90 per cent of the tax income and state petroleum share from the JPDA, Australia 10 per cent.


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6.15• English training.• Purchase of computer equipment. • Assisting in preparation for implementation of the EITI principles. • Supporting the Director and staff in DNPG in the various daily tasks • Acting as adviser to the Ministry on an ad hoc basis on various energy issues. • NPD project administration.

NPD has also administered advisers in the finance sector, in cooperation with the Norwegian Ministry of Finance and the central Bank of Norway. The support has included:• Advice to the Banking and Payments Authority (BPA), including issues related to the operational management of the Petroleum Fund and in assessment of the strategic asset allocation of the Fund.• Macroeconomic advice to the Ministry of Planning and Finance, including investment policy for the petroleum fund, fiscal policies, budgeting issues and general petroleum revenue advice.• Participation in meetings in the Petroleum Fund Investment Advisory Board which are being held in Dili about 4 times per year. • Participating in the preparation of a validation process for EITI.• Advice to the Petroleum Tax Division (PDT), focusing on establishing the necessary capacity and knowledge in the Division to carry out its duties. • Giving technical support to the PTD, e.g. on a transfer pricing case towards a rig company, resulting in significant increased tax income to Timor-Leste, several cases regarding withholding tax, auditing the

farm in of LNG buyers into the Bayu-Undan field and the associated LNG prices used etc.

The progress of the project was significantly influenced by a period of civil unrest and the associated security issues for both the MNRMEP staff and the international advisers. The activity level was low from end of May into August-September. In the beginning of that period sever-al of the advisers left the country for security reasons and a number of the MNRMEP staff had to leave Dili, move into refuge camps or stay home from work. The advisers were all back by mid June.

The Project has employed nine resident or part-time advisers in 2006: Project manager, project implementer, geological adviser, legal adviser, administration and education adviser, adviser to BPA, macroeconomic adviser, petroleum taxation adviser, petroleum fund investment adviser (part time). Several NPD experts and consultants has also worked on the project.

Plans 2007The Project will continue its support to the MNRMEP throughout 2007 on a large number of the activities listed above. The progress will most likely be influenced also by the level of unrest in the Timorese society and by the out-come of the presidential and parliamentary elections to be conducted during 2007. The Project will also develop a proposal for an extension of the cooperation which most likely will be forwarded to Norwegian Authorities for ap-proval during 2007. Several of the advisors will finish their terms during 2007 and an important activity will also be to recruit new advisers.


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6.16 V I E T N A M

Project: Vietnam petroleum resource management (VITRA2)

Cooperating institution: Petrovietnam (PV)

Goals and objectives: To ensure that the Vietnamese Authorities who deal with the management of Energy resources have a comprehensive knowledge of the total petroleum resources of the country and that they continue to use this knowledge at management/policy level for overall strategic planning for the further development of the energy sector.• To evaluate alternative data systems based on an evaluation of the PV needs.• To establish reporting regulations/guidelines for resource data.• To establish procedures for continuously updating the resource database in a standard way (defining format, standards, and security levels of data/ confidentiality) that allows users at different levels to access, update and maintain the database as well as use its output.• To enable PV to maintain, update, further develop the system, implement, use, and continuously improve Vietnam’s Resource inventory system (an integrated geophysical and geological - “G&G” - and technical, economical analysis and planning system) after completing the Project.• To enable PV to make short- and long-term plans and scenarios for exploration, developments and production activities in Vietnam.• To integrate the VITRA results into a sustainable process followed by the Vietnamese Energy Authorities for management/policy making decisions, by increasing their awareness to the VITRA concept.

cOUNTRY FAcTS: Official Name: Socialist Republic of Vietnam

Capital: Hanoi

Chief of state: President Nguyen Minh Triet

Head of government: Prime Minister Nguyen Tan Dung

Population: 84 402 966 (2006)

Petroleum sector, key figures:Average oil production: 370 000 bbl/day (2005)Annual gas production: 6.8 bill m3 (2005)

Organisation of the sector:Petrovietnam

Ministry of Industry – Department of Energy and Petroleum

Ministry of Planning and Investments

Government office – Oil and Gas department

Prime Minister Nguyen Tan Dung


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6.16Total budget: NOK 9 mill Project period: 2002 – 2007

Programme: The programme consists of three main elements: acquisition of hardware and software, training courses, seminars and workshops and consultancy services.Acquisition and maintenance fee for RMS tool for interpretation of 3D seismic data, Geox software for techno-economical evaluation of prospects and some hardware for data base administration. This is the way knowledge is transferred in the project and courses/seminars and workshops are tied to all the main activities in the project. PV conducts most activities in the project. consultancy services are used to increase PV competence and to some extent also its capacity. In this institutional cooperation project, NPD experts are favourably used, but supplemented by consultants when NPD lack relevant competence or capacity.

Contact:PetroVietnam: Dr. Minh, Project Manager, [email protected] Mr. Pham Gia Minh, Project co-ordinator, [email protected]

NPD: Mr Gunnar V. Søiland, chief technical adviser, [email protected]

cooperating institutions in Norway:Norwegian Petroleum Directorate

Activities in 2006• A workshop with industry representatives on the resource data reporting guidelines was organized in January, 2006. The final version of resource data reporting guidelines was completed. • A workshop for Development of temporary database was organized in Vietnam with the help of NPD’s advisors. In the workshop, members of cWT with the help from Norwegian experts drafted the system frame work and specifications. The design of the temporary database system will be carried out by a consultant company in a bidding process. • A workshop on Guidelines and procedures for approval of oil and gas field development was organized in October.• A workshop on Quality control of reported data was organized in Norway in July.

• The collecting and inputting of cultural data to new database have been accomplished. • The maintenance and support fees for Geox software have been paid.• The maintenance and support fees for the RMS software for 2006 to ROxAR have been paid.• The plans for workshop on development of marginal fields, which was agreed to be optional in the 7th ScM, were agreed to be changed to workshop on estimation of undiscovered resources.• Preparatory works was carried out for a workshop on comparing contractual fiscal terms. • 1 person attended a 8-week PETRAD course on petroleum management and operation in Norway. The course commenced in August.• Two ScM were organized, one in Vietnam in January and one in Norway in June.

Ms Inger Fjærtoft served as project coordinator for Vitra 2 until summer of 2006 when she resigned her position with NPD and Mr. Gunnar V. Søiland took over responsibility for the remainder of the project which is planned to be completed by mid year 2007.

Plans 2007The remaining activities of Vitra II is planned to be completed by the first half of 2007. This includes a workshop on Undiscovered resources and a workshop on comparing Fiscal Terms. PetroVietnam will continue to update their database with cultural data, finalize their Guidelines for development procedures, pay maintenance fee for acquired software, design the temporary database and prepare the final report. It is also requested that the project pays for Vietnamese participation to Petrad’s 8-week course in 2007.


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6.16


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6.16

V I E T N A MProject name:Development of Management Systems on Safety and Pollution control in the Vietnamese Petroleum Industry

Cooperating institution:Vietnam Oil and Gas corporation, PetroVietnam (PV)

PetroVietnam (PV) is 100 per cent owned by the Vietnamese government and the dominating institution in the Vietnamese petroleum sector. PV is entitled to carry out upstream petroleum operations both onshore and offshore, alone, or in cooperation with foreign companies under production sharing contracts or in joint ventures. PV also plays a leading role in the rest of the oil and gas chains, either directly or through its subsidiaries. In addition to being the government’s major commercial instrument in the oil and gas sector, it performs a number of regulatory and administrative tasks, which in most other petroleum producing countries are the responsibility of government agencies.

Goal:A sustained process of further development of health, safety and environment management is established in the Vietnamese oil and gas industry to avoid major accidents and environmental damage.

Objectives: • Successfully implement and enforce the Safety Management Regulation and the accompanying Petrovietnam guidelines• Enable Petrovietnam to further develop, implement and continuously improve health, safety and environmental management system in Petrovietnam after the end of the project period• Enable a selection of Petrovietnam employees to continuously build health, safety and environment competence after the end of the project period

Project period: 2001 - 2005Total budget: NOK 9 375 mill

Programme A contract for phase two of the project was signed on the 5th of September 2001. The project programme is split in two, where the Norwegian Pollution control Agency (SFT) is responsible for the pollution control components, while NPD is responsible for the safety management components. From 2004 this part of the project has been carried out by the Petroleum Safety Authority (PSA).

The safety management components are:• Development and implementation of safety management regulations and guidelines• Safety management training• Technology transfer and risk analysis training• Development of safety management system and supervisory ability

Contact:Petrovietnam: Dao Duy Khu, Deputy General Manager e-mail: [email protected] NPD: Programme Manager Dr Eirik Bjerkebæk , [email protected]

Cooperating Institutions:SFTNPDNORAD


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Brief History of the project The project started in 1996 with assistance in preparing the Safety Management Regulation.• This regulations has been prepared and was formally issued by the Prime Minister on the 8th of March 1999.• Three corporate Guidelines have been prepared, and are at present with the industry and relevant authorities for a formal hearing• Four corporate Guidelines have been prepared: • Guide on Risk and Emergency Management • Guideline on working environment • Guideline on supervision • Guideline on process safety

The guidelines have been made applicable for the industry as corporate PV Issues. 18 Training courses have been performed under the safety manage-ment programme. Technological transfer of soft-ware tools, hardware computers and knowledge in how to perform quantitative risk analyses have been included in the programme. Several System Audits have been performed towards operators in the Vietnamese oil and gas activity. A corporate HSE-Management System has been implemented for Petrovietnam and its subsidiaries.

Activities in 2006The second phase of the project was finalised early in 2006.

The final activities have been:• A study tour to Norway for the Petrovietnam management (members of the implementation committtee) to meet Norwegian managers on a high level working in the petroleum sector and to gather and systemise experiences from the implementation of HES management systems in Norwegian companies. This activity was organised by PSA, SFT and the coastal Directorate.

• Workshop on experience gained in Hanoi. Important representatives from the Petro- vietnam top management and from the HES management implementing committees met to present and discuss the experience so far. PSA and SFT assisted at the workshop.

From PSA the following representatives have participated in the project: Øyvind Tuntland, Eirik Bjerkebæk (PSA project manager), Hanne Etterlid, Hans Anvik and Sigvart Zachariassen.

Plans 2007Petrovietnam is now in a critical phase with respect to securing the further institutional development within management and HES. The company is considering the implementation of the HES management system to be one of the driving forces for the development of modern management systems for quality and risks connected to their activity. Petrovietnam has for that particular reason applied for an extension of the project for further three years (2007-2010). This request has also support from the Norwegian cooperating partners the coast Directorate, SFT and PSA and it was formally presented to the Norwegian Embassy in Hanoi at the end of 2005.

A third third party assessment of the project, as well as an evaluation of the request for continued support was carrried out late 2006. The decision on extension is expected early 2007.

Given that funding is provided as proposed, the activities proposed for 2007 will be closely matched to the plans for implementation of HSE management system in Petrovietnam, i.e develop-ment of document control system, development of HSE-assurance systems, and development of maintenance management systems.

6.16

Photo: Gunnar Søiland

Photo: Gunnar Søiland

NicaraguaVietnam South Africa

Angola

Timor-Leste

Nigeria


Cambodia Sri Lanka

CCOP

Tanzania

Design/layout: NOGPS

Norwegian Oil and Gas Production Support

Printer:

Kai Hansen

cover photo: Jan Stenløkk

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