The Norwegian Experience

Transcription

1 The Norwegian Experience Bogota, November 2018 Gunnar Sjøgren, Project Director

2 Gunnar Sjøgren Master degree ( Cand.Philol) from the University of Bergen (UiB), Norway Political history Political Science 10 years experience from teaching, including University of Stavanger (UiS) 26 years experience from the petroleum sector: 6 years Equinor (Statoil) 8 years IBM/PGS/Halliburton 12 years from Petrad/NPD Currently working as Project Director in NPD for international cooperation projects 2

3 3 Norway Administrative structures - counties

4 Norway Area: km2 Population: 5,3 mill Government: Parliamentary Constitutional Monarchy Developed country with very high GDP per capita Scandinavia 4

5 Major Roles Norwegian Petroleum Directorate (NPD)

6 1972 Policy Approach NPD In Stavanger Statoil (Equinor) Stavanger 100% owned by the state Norsk Hydro Oslo 50% owned by the state Saga Petroleum Oslo 100% private Current status: Equinor 2/3 state, 1/3 private Many private Norwegian Petroleum companies 6

7 NPD s technical competence / organisation: Competence profile: > 50 geoscientists reservoir engineers petroleum engineers 5 fiscal metering engineers petroleum economists data management and information technology 8 legal advisors Total appr 220 employees Organisation Interdisciplinary teams Solid foundation! Able to challenge the industry! 7

8 Norway 1972 European middle class country Political stability Rapidly increasing educational level Well developed free school system available for all citizens Elementary school, secondary school, high school, university Industrialized Economic growth Long maritime traditions big shipowners Shipbuilding industry Constructing industry entrepreneurs Building industry Growing IT industry Very low unemployment rate Work for all 8

9 1972 Policy Approach 10 commandments 1. That national supervision and control of all activity on the Norwegian continental shelf must be ensured. 2. That the petroleum discoveries must be exploited in a manner designed to ensure maximum independence for Norway in terms of reliance on others for supply of crude oil. 3. That new business activity must be developed, based on petroleum. 4. That the development of an oil industry must take place with necessary consideration for existing commercial activity, as well as protection of nature and the environment. 5. That flaring of exploitable gas on the Norwegian continental shelf must only be allowed in limited test periods. 9

10 1972 Policy Approach 10 commandments cont. 6. That petroleum from the Norwegian continental shelf must, as a main rule, be landed in Norway, with the exception of special cases in which socio-political considerations warrant a different solution. 7. That the State involves itself at all reasonable levels, contributes to coordinating Norwegian interests within the Norwegian petroleum industry, and to developing an integrated Norwegian oil community with both national and international objectives. 8. That a state-owned oil company be established to safeguard the State s commercial interests, and to pursue expedient cooperation with domestic and foreign oil stakeholders. 9. That an activity plan must be adopted for the area north of the 62nd parallel which satisfies the unique socio-political factors associated with that part of the country. 10. That Norwegian petroleum discoveries could present new tasks to Norway s foreign policy. 10

11 The seventies Big discoveries were made 1969 Ekofisk production Stratfjord 1978 Gullfaks 1979 Oseberg 1981 Troll Many big fields in Norway were discovered in the 1970ies 11

12 Employees wanted Enormous increase in activity People wanted Came from everywhere Many people converted into the oil industry In the beginning many foreigners/expats Replaced by Norwegians Often better educated After short time into management Continuous takeover by Norwegians 12

13 Norway ready for takeover.. The Statfjord story Discovered 1974 by Mobil (Now Exxon) Developed by Mobil Taken over by Statoil 1987 Technology transfer from Mobil to Statoil Impact on Statoil The final test Peak production more than bbl/day 13

14 14 Condeep

15 Condeep Norwegian construction Norwegian Contractors Concrete Built in Stavanger from 1973 The final Troll in platforms were built in Stavanger More were licensed and built outside Stavanger 15

16 Geco Geophysical Company of Norway Established 1972 Strong growth until 1985 Acquired other companies like Statex and German Prakla Gradual takeover by Schlumberger from 1986 Now Western Geco The mother of geophysics in Norway 16

17 Foreign investment All majors came to Norway Mobil, Total, Elf, Texaco, Amoco, BP, Shell, Eni, Phillips, Conoco, Exxon, Chevron etc. The biggest service companies followed Schlumberger Halliburton Baker Atlas Huges Others 17

18 Capacity and competence On-the-job-training In many companies in Norway and abroad Cooperation programmes strategic alliances NPD training Educational development In Norway and abroad Large number of programmes were established University level Vacational level R & D programmes Research council of Norway SINTEF and IRIS IOCs and service companies 18

19 Summed up Norway was an industrialized country Norway was an affluent society Long maritime traditions from the Vikings Shipbuilding industry High educational level Clear policy Ability to learn, change and adapt Good Governance 19

20 The Norwegian petroleum administration Resource management and overall sector responsibility Environmental protection Fishery activities Health, safety and working environment Oil spill preparedness 20

21 State Participation Government Take Equinor (formerly Statoil) Dividend from 2/3 of the ownership SDFI State Direct Financial Interest Petoro % share of oil producing fields Tax System 78% of the net profit of oil companies 21

22 Norwegian petroleum tax system Operating income (norm prices) - Operating expenses - Linear depreciation for investments (6 years) - Exploration expenses, R&D decommission - Environmental taxes and area fees - Net financial costs = Corporation tax base (24%) - Uplift (5,5% of investments for 4 years) = Special tax base (54%)

23 Income from the petroleum sector National budget 2018: 2,9 % 2019: 2,7 % Approximately NOK 230 (USD 27 billion)for 2019 Around 12% of the national budget Maximum that can be spent every year: 4% 23

24 24 Government Pension Fund Global (GPFG)

25 Petroleum Services Industry Norways second largest industry. Turnover of NOK 378 (USD 45) billion in

26 Environment Impact Very little visible impact on the environment Emission to water is neglectable Fishing industry is booming 2017 best year ever when it comes to revenue Fish farming and wild fish (cod fish bacalao ) Electrification of the platforms offshore Electric power via cables from onshore Hydro electric power in Norway CO2 Emission to air! 26

27 Social Impact people are working in the petroleum industry Petroleum producing companies Petroleum service industry Additional jobs in other sectors 2/3 of all Norwegian are working Most people are not working in the petroleum sector Local content implication Facilities located along the long coast Many local jobs Petroleum sector totally dominated by Norwegians Fewer and fewer foreigners expats 27

28 28 Melkøya LNG plant outside Hammerfest

29 Numbered licensing rounds in frontier areas Now 24th round Mostly every second year APA Awards in Predefined Areas Normally every year Introduced in

30 Status The Government s revenues

31 31 Status

32 32 Gas pipelines In Norway and to Europe

33 33 Future

34 Petroleum Impact for Norway Blessing or a curse? Facts: Challenges: Jobs Enormous income Financial freedom Welfare state Modern state Norway has green energy HydroElectric power How long will it last? (There is oil and gas for at least 50 more years) How long will the world need oil and gas? Already 50 % of all new cars in Norway are either hybrids or fully electric 34

35 Muchas Gracias Thank you Mange takk! 35