Norway’s good starting point as an industrial and shipping nation is one of the factors that explain why Norway has managed to develop a world-leading, technologically advanced supply industry. Others include the need to deal with severe weather conditions in the North Sea, strict national legislation and the high standards required by the operators. In many ways, the Norwegian shelf has functioned like a laboratory where companies have had to find solutions to technological problems in order to produce the oil and gas.
Effective utilisation of the resource potential of the continental shelf is an important basis for the competitiveness of the Norwegian supply industry. The Norwegian shelf has become one of the world’s largest offshore markets, providing a large domestic market for Norwegian suppliers and a basis for employment in all the country’s 19 counties.
A study carried out by the Centre for Applied Research at the Norwegian School of Economics showed that in 2015, about 117 000 people in Norway were directly employed in petroleum related service and supply industry. 26 000 of these worked offshore. See article on employment for more information.
As used here, the service and supply industry means companies based in Norway that supply oil- and gas-related products and services to the upstream oil and gas industry. It does not include general deliveries to the petroleum industry (for example hotel, office, property and telecommunications services). The figures for the international turnover of the Norwegian service and supply industry include sales through subsidiaries abroad.
The Norwegian supply industry includes more than 1 250 companies supplying goods and services for all stages of the value chain, including seismic and engineering services and drilling rig equipment; valves, nuts and hoses for the shipyard industry; and advanced offshore supply and service vessels and subsea technology.
The service and supply industry is represented throughout Norway. It employs most people in the Stavanger region, where there are companies offering a wide range of goods and services. In other parts of the country, there are often clusters of companies in the same segment within a limited geographical area.
In and around Oslo, there is well-established engineering expertise and a cluster of seismic companies. Trondheim has a strong position in research and education, while the Bergen region has become a centre for platform maintenance and subsea equipment. In Buskerud, especially in Kongsberg, a strong cluster has been developed related to subsea technology, automation and dynamic positioning equipment. In Southern Norway, there are world-leading companies in drilling technology, and the Ålesund region, has maritime companies that provide a complete shipbuilding and outfitting cluster, for example for advanced offshore vessels.
The specialised, technologically advanced supply industry has developed a knowledge base that is also useful for other sectors. There are many examples of technology that was originally developed for the petroleum industry and is now being used in very different fields.
Rapid developments in subsea technology are making it possible to extract oil and gas at increasing depths and distances from land. Subsea solutions will play a vital role in the development of new discoveries in the Barents Sea.
Exciting new developments include a breakthrough in subsea compression technology in Norway. Statoil is currently carrying out two seabed compression projects on the Åsgard and Gullfaks fields on the Norwegian shelf. Their aim is to maintain the level of production as the pressure in the reservoirs drops. Statoil envisages the installation of this type of technology on more fields as a cost-effective way of increasing the recovery rate and prolonging field lifetime.
The Åsgard subsea compressor, delivered by Aker Solutions, is the first subsea compression system in the world. It will boost recovery from the Mikkel and Midgard reservoirs by 306 million barrels of oil equivalents. In developing the system, Aker Solutions drew on experience it gained during a pilot project on subsea compression on Ormen Lange. Aker Solutions together with Statoil was awarded the Offshore Northern Seas (ONS) Innovation Award in 2012 for the development of the subsea compression technology.
The subsea wet gas compressor for Gullfaks is another example of cutting-edge technology, and was developed by OneSubsea in cooperation with Statoil. This is the first system of its kind in the world, and will increase the recovery rate for Gullfaks Sør from 62 % to 74 %. This means that production will rise by 22 million barrels of oil equivalents. The compressor station was built and tested entirely by suppliers and subcontractors in Western Norway.
In 2014, about 37 % of the total turnover of NOK 527 billion in the Norwegian-based supply industry, or about NOK 195 billion, came from international markets. Turnover in 2015 is expected to be lower due to reduced acitivity in the petroleum industry - both internationally and on the Norwegian shelf.
Percentage growth in the past ten years has been highest in international markets. The topside and process equipment segment has the largest international turnover. The second largest segment is subsea equipment and installation, followed by transport and logistics (offshore service vessels).
The five most important markets in 2014 measured in terms of turnover were South Korea, the UK, Brazil, the US and Australia (see report).
South Korea has such an important position because of large deliveries to Korean offshore construction companies, mainly drilling packages and other platform deck and rig equipment. In the UK, Norwegian companies provide goods and services for most product segments, whereas in Brazil, there is high turnover in a fairly small number of segments: rig and drilling services, transport and logistics (primarily vessel hire) and subsea equipment and installation.
International revenues in the Norwegian service and supply industry 2014, 15 largest countries
Source: Rystad Energy
INTSOK – Norwegian Oil and Gas Partners – was established in 1997 by the Norwegian oil and gas industry and the Norwegian Government. Its aim is to strengthen the long-term basis for value creation and employment in the industry, and it is the authorities’ most important tool for promoting the Norwegian oil and gas industry internationally.
The number of people employed in the industry, its geographical spread in Norway, and the fact that Norwegian companies are in the international top division as regards petroleum-related goods and services, are all proof of the success of long-term efforts to build up a strong service and supply industry based in Norway. Overall, this also means that the principles of Norwegian petroleum legislation are being followed: the resources on the continental shelf are being managed in a long-term perspective so that value creation benefits society as a whole, among other things by providing employment and strengthening Norwegian business and industry and industrial development.