Category: Technology and the environment: Technology and research

When Johnsen was a Fulbright scholar in the USA, he learnt about the Standard Oil company and its head, John D Rockefeller, who used his pipelines to crush his competitors.[1]Fotnote: Borchgrevink, Aage Storm, 2019, Giganten: 40. So he was aware of the strategic importance of transport systems long before becoming CEO of Statoil in 1972. That underpinned the pressure he put on Phillips Petroleum in 1973-74 over control of the Norpipe pipelines from Ekofisk. Similarly, Statoil pushed hard to secure an oil and/or gas pipeline from Norway’s share of Statfjord to the Norwegian mainland.

One for oil was not laid because the Storting (parliament) decided in June 1976 that Statfjord crude would be loaded directly into shuttle tankers. But a gas link was still possible, since the Storting had also asked Statoil to conduct a two-year programme of planning and studies for a gas gathering pipeline from Statfjord to Norway.

Plumber team

The company had purposefully qualified itself for such studies over a number of years, with its technical department – nicknamed the “plumbers”, a play on words in Norwegian – gaining experience from Norpipe. The latter embraced two pipelines, one for oil to Teesside in the UK and other carrying gas to Emden in West Germany. Statoil was also a partner in the Frigg gas pipelines to St Fergus.

To be equipped for big pipeline projects, the plumbers swiftly recruited metallurgists, computer specialists, engineers to calculate dimensions and economists to determine costs. By 1975, this team totalled almost 60 people, mostly engineers.

Choosing a developer

That year was when the government published a White Paper on developing and landing petroleum from Statfjord and laying a gas gathering pipeline. An important argument for building the latter was that other, smaller gas fields in the North Sea could take advantage of such a trunkline. If the government licensed blocks along the pipeline route where gas was likely to be found, landing these resources could be coordinated and their prudent utilisation ensured.

Although Statoil was the biggest licensee in Norway’s share of Statfjord, Mobil was the development and production operator. Which of them would lay and run a possible pipeline was thereby by no means given. But Statoil took action. To save time and money, the board decided on 3 February 1976 that the company would launch phase one of a pipeline study on its own account. Losing months while waiting for the White Paper would be unfortunate.[2]Fotnote: The project team was split into three main components – planning and administration, under Lars Fundingsland, terminal headed by Ove Muri and pipelaying led by Thor Haakon Helgesen, with Sverre Lund as his deputy.

Three departments worked on the project  – planning and administration to draw up routines, terminal to plan the design of the process plant and prepare the selection of a site, and pipelaying. The last of these was to find solutions to the technical challenges involved.

Statoil was accordingly well prepared when the Storting approved continued work on the Statfjord transport system project, pipeline and terminal a few months later. From then on, it led the Statoil/Mobil joint venture working which worked on phase two until 1 March 1981.[3]Fotnote: Report no 90 (1975-76) to the Storting, Om utbygging og ilandføring av petroleum fra Statfjordfeltet og en samlerørledning for gass.

Planning a pioneering project

Johnsen personally followed the work of the plumbers on mapping the seabed between Statfjord and the Norwegian coast. A gas pipeline was a big investment. Construction of the pipeline itself, building the receiving terminal on land and starting up the system were expected to cost NOK 15-25 billion.[4]Fotnote: Status, no 7, 1976.

Water depths along the pipeline route varied between 150 metres at the field and more than 300 metres at the lowest point of the Norwegian Trench, which runs parallel to Norway’s coast. Video footage acquired from small submersibles allowed Johnsen himself and the project team to study what the seabed looked like. The engineers needed to determine which vessels were needed for the laying operation. Anchors to hold the laybarge in position had to be capable of coping with the soft clay covering much of the Trench seabed.

Underwater pipelines are laid over the stern of the barge, which moves forward by pulling on anchors which are constantly being repositioned well ahead by specialist ships. That made it important for the anchors to have a good grip on the seabed, and tests were needed to confirm that the clay was able to provide a sufficient hold. Securing that was easier on the western slope of the Trench and in towards land because of sand and rock deposits on the seabed. [5]Fotnote: Johnsen, Arve, 1988, Gjennombrudd og vekst: Statoil-år 1978-1987: 72-73. To satisfy fishing interests, the plans had to include trenching of the pipeline. That called in turn for the construction of a machine to cut such channels on the seabed.

Norway’s Kværner group was commissioned by Statoil to develop a trencher controlled from a surface vessel. This used the laid pipeline as a rail while cutting alongside it. The pipeline then fell into the resulting trench.[6]Fotnote: Ibid: 73.

Another difficult question was how possible pipeline repairs could be carried out in deep water – in other words, whether divers could descend in such depths to weld possible faults. This was a big challenge because saturation diving – where the diver lives in a chamber pressurised to the working depth – was still only in its infancy. The deepest dives conducted in 1973-74 has gone down to 150 metres, and descending to 300 metres was more a case of wishful thinking that reality at the time.[7]Fotnote: Gjerde, Kristin Øye and Ryggvik, Helge, 2009, On the edge, under water. Offshore diving in Norway: 175-180.

— Project meeting at the onshore terminal (Statpipe) in London (1982). From the right Oddgeir Taksdal, John Gerhardsen, Odd Mosbergvik, Bjørn Wang, Ove Muri, Con O’Sullivan og Egil Robstad. Photo: Equinor

In 1976, Statoil and Mobil contributed nine people and one person respectively in a welding project run by classification society Det norske Veritas. Statoil also followed a similar Shell project for deepwater pipeline repair. [8]Fotnote: Status, no 7, 1976. But more trials were needed, and a pipelaying/repair test in 300 metres of water was therefore planned for the spring of 1978 in the Skånevik Fjord.

The plumbers had to assess the best landfall site for the pipeline, and whether a tunnel should be built to conduct it through the difficult inshore zone. Furthermore, the terminal team had to do the engineering work required for the process plant, seabed surveys and investigations for rock caverns to store oil and gas.

Based on the results of this second phase, the Storting would determine how the landing should occur. Only then could the third stage – building work on land, constructing the landfall tunnel and pipelaying from field to shore – be undertaken.[9]Fotnote: Ibid.

To Kårstø and the continent

By the time Statfjord came on stream in 1979, planning of the gas pipeline from Norway’s share had made considerable progress. While the oil was loaded into shuttle tankers, gas was initially flared. But the fifth of the 10 commandments mentioned above prohibited doing this over an extended period. Statoil accordingly started injecting gas from the Statfjord A platform back into the reservoir in June 1980. However, this also represented only a temporary solution. That was because long-term gas injection could damage the sub-surface structures. To avoid this affecting oil output, installing a pipeline to land was a matter of urgency.

Fortunately, the economic preconditions for laying a pipeline over the Trench steadily improved. Oil prices tripled after the Iranian revolution in 1979, which made a big contribution to the financial margins. Nobody doubted any longer that Statfjord would show a profit. The Statoil/Mobil group submitted an application for landing Statfjord gas to the Ministry of Petroleum and Energy in December 1980. Gas from Heimdal and Gullfaks was expected to be carried in the same system, which would be owned and run by a dedicated company with Statoil as the operator.[10]Fotnote: Stafsnes, Tor, 1984, Ilandføring av petroleum fra Statfjord: analyse av en iverksettingsprosess, Bergen: 97-99.

This application was considered by the Storting on 10 June 1981, when the final decision on where the gas should be landed in Norway was taken. As so often in Norwegian politics, the location issue played an important role. Statoil wanted Kårstø north of Stavanger. Mongstad near Bergen was an alternative, but Sotra in same area dropped out. Both Kårstø and Mongstad were thoroughly assessed both technically and financially. The ministry opted for the former. A key consideration was that the Statoil/Mobil group would bear financial responsibility for the project.[11]Fotnote: Ibid. When the Storting discussion came to a vote, 94 representatives supported a terminal at Kårstø while 54 preferred Mongstad.

— The LB 2000 pipelay barge at work near Kårstø. Photo: Leif Berge/Equinor

Gas from the British share of the field was to go to the UK, since the licensees were not allowed to sell it to the continent. A separate pipeline was therefore laid for this output.[12]Fotnote: Development of the UK Oil and Gas Resources 2001: Appendix 14 Offshore Oil and Gas Trunk and Interfield Pipelines. Since 2007, gas exports from Statfjord have travelled through the Tampen Link, which runs via the Far North Liquids and Associated Gas System (Flags) to the UK.

A technological milestone

The 300-kilometre pipeline was laid across the Trench to a landfall on Karmøy island north of Stavanger before continuing across islands and fjords to Kårstø 20 kilometres away.

Natural gas liquids were removed at this terminal, with the dry gas then piped back across Karmøy and the Trench to the Draupner S riser platform. From there, Statpipe ran to Ekofisk and linked with the Norpipe gas pipeline to Emden in Germany and European markets. The whole giant project was costed at NOK 20 billion.

The sales agreement with continental gas buyers covering gas exports from Statfjord, Gullfaks and Heimdal was signed on 1 September 1982. Sellers Statoil, Mobil, Conoco, Shell, Esso, Saga Petroleum, Amerada Hess, Amoco and Texas Eastern secured a price characterised as “the best ever achieved”. Coordination on the Norwegian side was handled by Statoil, which led negotiations with the buyers.[13]Fotnote: Johnsen, Arve, op.cit: 130-140. The European consortium involved gas distributors in West Germany, the Netherlands, France and Belgium. It undertook to pay NOK 150 billion in 1982 value for gas from the three fields for their entire producing lives from 1986 and about 30 years ahead.

Opening the Statpipe system in September 1985 marked a milestone in Norwegian oil history. The Trench was conquered, breaching a key technological barrier – which was also important politically and economically for Norway. With Statoil’s aid, the country had secured greater direct national control over its oil industry. Much better conditions had also been created for industrialisation based on the petroleum reserves.[14]Fotnote: Ibid: 189.

— From the left: CEO Arve Johnsen, Prime Ministrer Gro Harlem Brundtland and Egil Sæl, CEO on Statpipe, Kårstø. Photo: Leif Berge/Equinor

Johnsen was asked on the occasion of Statoil’s 20th anniversary which decision had been the most important in its first 15 years, while he was CEO. His answer was the Storting’s 1981 decision on developing Statpipe. “The Statpipe project was special because we did something everybody else thought would be extremely difficult – laying a pipeline across the Norwegian Trench in 380 metres of water. We also laid the basis for an infrastructure of gas pipelines from the NCS, which will have enormous significance for Norway and Statoil […]”[15]Fotnote: Gjerde, Kristin Øye and Ryggvik, Helge, op.cit: 181.

When their partnership began in 1991, the two companies became involved in the Democratic republic of the Congo as well as Angola and Nigeria, but withdrew from the first of these areas in the same year. A venture in Equatorial Guinea, operated from Nigeria, was also short-lived.[16]Fotnote: Ryggvik, Helge. (2009). Til siste dråpe. Oslo: Aschehoug: 238.

Through various engagements, BP was already established in all three west African states when the alliance with Statoil began. However, the military regime in Nigeria had taken over the British oil major’s operations in the country during 1979 as part of a massive nationalisation wave. During the 1990s, the Nigerian mood shifted from nationalisation to internationalisation, and a more open attitude was adopted towards foreign companies. That change in climate created an opening for BP to return to the giant of Africa, this time accompanied by Statoil.

Repressive regimes, executions and environmental disasters

— Map of Nigeria. Source: Equinor

Statoil was to be responsible for the alliance’s joint operations in Nigeria, making this country its baptism of fire as an international oil company. A significant proportion of the staff intended to support these activities were located in Stavanger. But a number of BP personnel were included in this Norway-based Nigeria management from the start.[17]Fotnote: Ryggvik, Helge. (2009). Til siste dråpe. Oslo: Aschehoug: 231

Operational responsibility for the west African commitment was allocated to BP and its London head office. Only a minimal share of alliance personnel were permanently stationed in Africa. While 23 people, all BP employees, worked with Angola from London, only one was based full-time in Luanda. Thirty staff handled Nigeria in Stavanger, with a single person in the African country itself.

Nigeria remained an important priority area until the mid-1990s, and activity there expanded. The alliance succeeded with its strategy and established itself as a leading player in the deepwater areas off the Nigerian coast. That position was completely overturned in 1995, when political conditions in Nigeria deteriorated dramatically.

Ever greater dissatisfaction had spread among many of the people living around the Niger delta. They received little or no share of the big revenues generated by the oil resources in their region. In addition, a massive environmental disaster began to manifest itself in the delta area.

A coup in 1993 had introduced one of the most brutal and corrupt regimes in Nigeria’s history. The repressive government banned all political activity and opponents were jailed. That in turn unleashed extensive protests across much of the country. These increased from 1995 after the military regime executed nine activists from the oil-rich delta – including author and environmental activist Ken Saro-Wiwa.

These executions helped to create pressure from international public opinion. Foreign companies faced demands to pull out of Nigeria. The worst-affected was Shell, which had been producing oil for many years from a controversial part of the Nigeria delta. But organised campaigns were also conducted against Statoil in Norway. The company responded that it did not want to become involved in political processes and chose to accept the political burden of remaining in Nigeria. It argued that the human rights position would not improve if it and BP withdrew.

— John Browne from BP, Nigerian politician Jibril Aminu and Statoil’s Harald Norvik in Nigeria. Photo: Leif Berge

These developments were not particularly concerning for the alliance to begin with. It concentrated on offshore exploration, and was not involved with oil spills and dead fish in the delta. And, in the middle of the unrest on land, the alliance could raise a mighty cheer when oil was proven with its first wildcat – which also represented the first deepwater discovery off Nigeria. But the jubilation was short-lived, since the resources proved non-commercial. At the same time, the political conditions caught up with the partners.

Statoil had the most to lose by pulling out. Nigeria was where the company intended to demonstrate that it could serve as an operator, even under difficult conditions, outside the North Sea.

It now transpired that repressive regimes, executions and environmental disasters were not the only problems facing BP and Statoil. The financial difficulties were a more difficult challenge. Nor had the alliance succeeded in securing its own operatorships. And its interests in other fields had also failed to yield sufficient oil to justify the exploration costs. The accounts were looking critical.[18]Fotnote: Ryggvik, Helge. (2009). Til siste dråpe. Oslo: Aschehoug: 233.

— The Agbami oilfield project is one of Nigeria’s largest deepwater developments. Photo: unknown/Offshore Technologies

No big breakthrough occurred on the exploration side. On 20 April 1998, Statoil and BP signed a contract with Nigerian company Allied Energy on the sale of the alliance’s 40 per cent interest in block 210 – the Oyo oil field. It afterwards transpired that neither Statoil nor BP received the sale price. In addition came a price reduction of about 30 per cent, which many have characterised as incomprehensible.[19]Fotnote: Keilen, Erlend. (2003. 3. november). E24. Statoil fikk aldri betalt for oljefelt i Nigeria

An investigation was conducted, and its report concluded in 2004 that: the fact that the statements obtained are ambiguous, combined with the fact that no written documentation exists about the decisions which must have been taken, provides some scope for speculation. On that basis, the investigation committee would recommend to Statoil that it conducts an internal inquiry to clarify the circumstances. The following day, Statoil declared itself not guilty of corruption at a press conference in Oslo.[20]Fotnote: E24. (2010. 1. mars). NTB. Hemmelig Statoil-gransking av priskutt i Nigeria.

Although the alliance itself withdrew from Nigeria, Statoil remained on an independent basis and had interests in 2020 in Agbami – the country’s largest deepwater field.

Chevron is the operator of the field with a 67.30 percent ownership interest and Prime 127 has the remaining 12.49 percent. Equinor also operates two exploration licenses – OML 128 and 129 – with a share of 53.85 per cent in both. Six wells have been drilled in both, with two discoveries made. None of the fields are planned developed.

On Equinor’s own website, the company describes that its success in Nigeria “is underpinned by our sustainability work, ensuring we are a responsible operator and are proactive in improving opportunities for the communities where we work.”[21]Fotnote: https://www.equinor.com/where-we-are/nigeria

Sleipner West was discovered as early as 1974 with Esso as the operator and declared commercial in 1984. After a plan for development and operation (PDO) was submitted to the government in 1992, it came on stream in 1996. But something had to be done about the high CO₂ content in the field’s output in order to meet the specifications in the gas sales contract.

While natural gas primarily comprises methane (CH₄), it also contains varying amounts of undesirable substances such as hydrogen sulphide (H₂S), nitrogen and carbon dioxide (CO₂). Many fire extinguishers contain pure CO₂ because it displaces the oxygen needed to sustain combustion. This is also why a high CO₂ content is undesirable in natural gas for use with ovens and the like – it will not burn so well. As a result, gas sales contracts will often specify a maximum quantity of undesirable substances permitted on delivery in order to ensure combustion quality.

Scrubbed clean and stored

— CO2 pipeline on Sleipner A. Photo: Øyvind Hagen/Equinor

The gas in Sleipner West comes from 3 450 metres beneath the seabed and contains about nine per cent CO₂. That exceeds the ceiling specified in the Troll gas sales agreements, which is 2.5 per cent for this component. As a result, the excess CO₂ must be removed before exporting the gas. This is done in two ways – by blending the Sleipner West gas with gas from Sleipner East and other fields with low CO₂ content. To further reduce the CO₂ content in the exported Sleipner West gas, CO₂ is removed from it. This is done by adding amines – organic bases containing a nitrogen atom which bind to the CO₂ ­– on the separate Sleipner T gas treatment platform tied back to the concrete Sleipner A installation.

After being removed from the gas flow, the CO₂-rich amines are heated to separate the mix into its component parts again – a process called scrubbing. That allows the amine to be reused and leaves the CO₂ to be disposed of. This technology was not off-the-shelf, and had some problems and was costly. Countless modifications had to be made. One favorable factor for Statoil as operator was that the technology used was from the French company Total. Total was also a partner in the license, and hence did not cause much commotion when there was trouble with the technology. [22]Fotnote: Kyrre Nese in e-mail 8. august 2022.

CO₂ is re-injected

Since the latter has no commercial value, the simplest – and cheapest – way of dealing with this gas would be to release it to the air. That might have been done on Sleipner West, too, but the introduction of a Norwegian carbon tax for petroleum operations on the NCS meant it would be very expensive. So operator Statoil opted for a different approach, which involved pumping the CO₂­ back underground. Since returning the gas to the reservoir of origin would simply increase its content in future production, the geologists had to find somewhere else to put it.

A number of conditions must be in place for CO₂ to be stored in the sub-surface. The relevant formation must have sufficiently porous and permeable rocks, be saturated with saline water, be deep enough (more than 800 metres below sea level) to ensure that the CO₂ has the desired properties, have an impermeable cap rock to prevent the gas leaking out, and cover a sufficiently large area with a big enough volume.[23]Fotnote: https://bellona.org/assets/sites/3/Case_Study_on_the_Sleipner_Gas_Field_in_Norway.pdf

The Utsira formation, which overlaps the Sleipner reservoirs at a different depth, meets these criteria and represents an ideal location for disposing of CO₂. It lies about 800 metres beneath the seabed, while the main Sleipner East reservoir is roughly 1 700 metres further down.

Using a single well drilled from the concrete Sleipner A platform, an annual injection rate of about a million tonnes means some 20 million tonnes of CO₂ have been deposited in the Utsira formation since 1996.

Regular investigations of the sub-surface have been conducted using seismic surveying to ensure that no CO₂ is leaking from the structure to the seabed. These studies show that the injected gas is occupying an ever-expanding area of the formation and that no threat of leaks exists.

CO₂ injection from Sleipner West was a pioneering project on the NCS and has been a success. Since 2019, CO₂ from Utgard – which comprises no less than 16 per cent of this field’s output – has also been separated out on Sleipner T and injected into the Utsira formation.[24]Fotnote: Annual report Utgard 2019, AU-UTG-00002, Equinor.

The Snøhvit gas produced in Norway’s Barents Sea sector contains five-eight per cent CO₂. This is separated out in the same way as on Sleipner, but at the Melkøya processing plant on land rather than on an offshore platform. Separated CO₂ is piped back to the field in a compressed liquid phase and injected into the subsurface. Although injection problems have arisen, studies indicate that no gas is leaking out. A similar CCS process was pursued on the Salah gas field in Algeria, but terminated in 2011 because of capacity limitations in the geological structures.[25]Fotnote: https://uit.no/om/enhet/aktuelt/nyhet?p_document_id=552337&p_dimension_id=88137 and https://www.equinor.com/energy/carbon-capture-utilisation-and-storage 

CCS on Sleipner has been under way longer than any comparable project, and the data and experience this has yielded will be important for future schemes of this kind. In 2019, Equinor and its partners in the field released information on CO₂ injection and monitoring as a contribution to innovation for and development of storing greenhouse gases.[26]Fotnote: https://www.equinor.com/news/archive/2019-06-12-sleipner-co2-storage-data

Frugal style

The head of the American Petroleum Institute (API) – which represents the whole US oil and gas sector – visited Statoil in 1975. CEO Arve Johnsen was host to this highly influential executive, and provided a briefing on Statoil’s business. That included explaining how it was becoming an interesting oil seller. One point raised by the API president was whether Norway had ambitions to join the Organisation of the Petroleum Exporting Countries – Opec. Johnsen could affirm that it did not.

Following their meeting, the pair strolled over the road to the KNA Hotel in Stavanger for lunch. Johnsen asked his guest whether he would like something to drink with his food. The American smiled broadly, and perhaps expected a glass of wine. His surprise can be imagined when the frugal Norwegian went on: “How about a glass of milk?” Without any change of expression, the API man expressed his thanks and drank milk in good Norwegian style together with Johnsen.[27]Fotnote: Related by Håkon Lavik, former information office at Statoil, 2 July 2020.

Formal versus informal

International banks were queuing up in 1976-77 to lend Statoil money for its share of the Statfjord development. A Japanese bank delegation announced it was arriving in Stavanger on a Sunday evening and requested a meeting with Statoil’s finance team. This encounter was scheduled for Monday morning at 08.30. Information officer Håkon Lavik was assigned to fetch the visitors from the city’s best hotel – the Atlantic – at 08.00.

He met four vice presidents, very correctly dressed in pin-stripe suits and ties. They insisted on leaving at once to avoid being late. A taxi was ordered and the group arrived at about 08.15 at Statoil’s international department, which was then based at Flintgaten 2 in the Hillevåg district.

The only Norwegian present then who was due to attend the meeting was Jørn Larsen, a burly type from the Jæren farming district south of Stavanger wearing jeans and a pullover.

Tor Espedal, the chief financial officer, arrived soon afterwards. He always started his working day with a swim and still had wet hair, as well as being sweaty and open-collared (his tie was in his pocket) after cycling to the office.

Then came a very correctly dressed Eivind Brekkelund, an economist, followed by Jan Erik Langangen – a later Statoil chair – in jogging gear. His suit was in the changing room.

— Jan Erik Langangen running the Holmenkoll relay. Photo: Equinor

Svein Andersen, head of the company’s internal audit function, turned up next. He was also on a bike, wearing trainers and an anorak.

Finally came Thor Inge Willumsen, later Statoil’s CFO, in a pullover and without a tie, and munching on a carrot which marked the end of his breakfast.

Only a few minutes passed before everyone was ready for the meeting, and Statoil was loaned billions of kroner. But the Japanese visitors were undoubtedly taken a little aback at Norwegian culture of informality.

Despite their relaxed style, the Statoil team was no gang of small fry. All those mentioned later become senior vice presidents in Statoil, while Brekkelund went to Mobil and then to Shell.[28]Fotnote: Ibid.

Anti-aircraft guns on Statfjord

The Statoil management received an important visit from the Supreme Soviet one September day in 1976. After the conventional introductions by chair Finn Lied and CEO Johnsen, the latter gave a briefing on the company’s operations. That included a review of the current construction of the Statfjord A platform, with particular emphasis on building concrete gravity base structures. This was long before the computer age, and engineers commissioned detailed models of such installations to help their design work.

The model of Statfjord A stood in the corridor outside the meeting room in Lagårdsveien 78, which functioned as Statoil’s head office at the time. During the presentation, with associated slides, a discussion began with and between the visitors about whether the Soviet Union had any such structures. The delegation claimed it had, and even some that were larger.

— Representatives from the Soviet Union, on a visit to Statoil, gathered around a model of Statfjord Phase I. Photo: Equinor

After the meeting, the group assembled around the model. This was very detailed, and visitors noticed that water monitors were installed around and about the topsides in case of fire. But the Soviet delegates through they were anti-aircraft guns – because that was something they really knew about. From their perspective, this felt to be was essential. Fire-fighting was an unnecessary precaution. The visitors were otherwise very grateful for Statoil’s openness, which they much appreciated. It only emerged later how distinguished this visit had been.

When the next session of the Supreme Soviet opened a few weeks later, and the event was shown on the TV news, three of the delegates were seen seated in the first row on the podium. They were immediately behind Communist Party head Leonid Brezhnev, who gave the opening speech. The visitors had been really top politicians with great influence in the Soviet Union.[29]Fotnote: Ibid.

Statoil was not unfamiliar with the Dutch continental shelf. It had interests in two licences inherited from the Norwegian government after the Storting (parliament) gave its blessing for the company to exercise the state’s option for them in 1982 – with the rights and obligations that this involved.[30]Fotnote: Ministry of Petroleum and Energy, Proposition no 102 (1981-1982) to the Storting, Om utøvelse av Statoils opsjon til å delta i lisensen K/18-L/16 på nederlandsk kontinentalsokkel m.m.

The assumption was that all revenues generated within the licences were to be transferred to Norway. In addition, the Ministry of Petroleum and Energy felt it was appropriate for Statoil to establish a dedicated subsidiary if the options were exercised.

As a result, the Dutch sector of the North Sea became the first of many foreign continental shelves where Statoil made a commitment. But the international dream there proved relatively short-lived. After eight years, the company sold off everything and left the country.

Acquiring the licences

The Norwegian government secured access as early as 1970 to four licences on the Dutch continental shelf as the result of a swop deal involving Norwegian Gulf Oil Company. When the latter was allowed to transfer its rights in two blocks off Norway to Norske Conoco, one of the conditions was that Conoco’s then US parent, Continental Oil Company, would give the Norwegian state a right to at least 10 per cent in a Conoco licence in a country other than Norway.[31]Fotnote: The two blocks in the Norwegian North Sea represented two-thirds of production licences 019 (Ula and Gyda) and 020.

The result was that the state acquired 10 per cent of the Continental Netherlands Oil Company (ConNed) holdings in blocks F/7, F/9, K/18 and L/16 in the Dutch sector, which amounted to 7.5 per cent of this acreage.

— Statoil’s first licence in the Netherlands. Source: Equinor

These blocks were transferred in 1973 to Statoil along with other agreements on state participation which the government had secured at that point.[32]Fotnote: Proposition no 78 (1972-1973) to the Storting, Utøvelse av statens opsjon på deltakelse i utvinningstillatelse for petroleum (Frigg-feltet), og overføring til Den norske stats oljeselskap A/S av avtaler om statsdeltakelse i utvinningstillatelser m.v.

The decision to transfer all such agreements left the company with options for four Dutch blocks.

Several of the prospects were later assessed by operator Conoco as uninteresting, with F/7 and F/9 as well as half the acreage in K/18 and L/16 being relinquished to the Dutch government.[33]Fotnote: Proposition no 102, op.cit.

Oil discovered in the remaining area of K/18 in 1980 was declared commercial the following year. Under the agreement originally entered into with the Norwegian state, Statoil then had seven months to decide whether to exercise its option.

While the company was free to decide that it wanted to pull out, any decision on participating in development and operation would be taken by the Storting. When the matter came up for debate there in June 1982, there was no discussion – Statoil was to participate for the first time in oil production on another country’s continental shelf.

With a green light from the Storting, the company opted to participate in developing K/18 in accordance with the plans drawn up by Conoco.[34]Fotnote: Annual report and accounts 1982, Den norske stats oljeselskap a.s, Stavanger.

Subsidiary

— Opening the Statoil Netherlands BV office in The Hague. From left: Petter Graver, Norwegian ambassador to the Netherlands, Jakob Eri, chair of the company and Statoil’s vice president operations, Kjell Helle, the CEO, and Harry van Ulzen from the Dutch Ministry of Economic Affairs.

In line with the Storting’s wishes, Statoil established a subsidiary and permanent office in the Netherlands. It also regarded the model of a wholly owned daughter company as the most appropriate way to organise foreign operations.

The advantage of this approach was that subsidiaries abroad could draw on parent company expertise in a flexible and straightforward manner. They were charged for such services at the hourly rates normally applied between oil companies.

Since these foreign arms were Statoil’s own limited companies, they had to comply with the laws of the country they operated in. That in turn meant they had to keep full accounts for their own activities, which had to be confirmed and approved by auditors in the subsidiary’s own country and in Statoil.

K/18, or the Kotter field, came on stream on 22 September 1984, and Statoil began earning revenues from a foreign engagement for the first time. Production from the Logger field in L/16 began a year later.[35]Fotnote: Status, Statoil house journal, no 8, 1985, “Logger-feltet i produksjon”.

Looking for more

Statoil was keen to participate when new blocks were put on offer in the Dutch sector during 1984. Its board raised the issue of such involvement with the general meeting (the minister of petroleum and energy). Statoil’s preference was to be an operator.

The Dutch authorities had an express desire to develop collaboration with Norway in the oil sector in order to reduce the influence of the big multinational companies.[36]Fotnote: Status, Statoil house journal, no 16, 1984, “Operatøroppgave i Nederland?”.

Statoil applied for the operatorship of three blocks in this fifth licensing round, and reinforced staffing at the Dutch subsidiary by eight people.

The company secured 60 per cent of block F/14a. According to the Dutch government, it had the best geological interpretation and a good work programme. An award to Statoil would also fit well in a broader energy-policy context. To judge from the number of applications, the blocks sought by the company were the best in the round.

Drilled by American jack-up Zapata Scotian, the initial wildcat on F/14a was Statoil’s first well as operator outside Norwegian waters and was spudded on 8 August 1986.

— Drilling personnel in the Netherlands make direct contact with the “black gold”. From left: Øivind Gulli, Ivar Holm, Oddbjørg Greiner, Øivind Reinertsen, John Self, Rolf Dirdal and Kjell Helle.

Oil was encountered in the licence,[37]Fotnote: Status, Statoil house journal, no 10, 1986, “Oljefunn på nederlandsk sokkel”. but not much. Small oil deposits were also discovered in the neighbouring block, along with gas assumed to be commercial. F/14a proved a disappointment, since the oil found was much less than the company had hoped for.

Statoil nevertheless did not give up, and applied for further licences – securing three operatorships in 1987 and two more in 1989. That meant the company had six operatorships plus participation in the producing Kotter and Logger fields.[38]Fotnote: Status, Statoil house journal, no 19, 1989.

An end and a new beginning

While Statoil was celebrating its 20th anniversary in 1992, its Dutch involvement terminated. The company sold its remaining exploration licences and the subsidiary there.

It wanted to concentrate its international involvement by making a full commitment to the collaboration project with BP in the former Soviet Union, south-east Asia and west Africa.[39]Fotnote: Stavanger Aftenblad, 8 April 1993 “Statoil selger i Nederland”.

Singapore was and is an important hub for east-west trade. This modern city state houses more people than Norway in an area of about 800 square kilometres. A cultural melting pot, the former British colony with a predominantly Asian population handles contacts between two continents both linguistically and culturally.

15.00 Singapore/09.00/Stavanger/03.00 New York

In the 1990s, Singapore ranked as the world’s third largest oil refining centre and had a growing petrochemical industry. Tankers and dry cargo ships lay in the roads under an equatorial sun and daily afternoon downpours while waiting to berth for loading and unloading.

Statoil’s first office there opened with five employees and lay in the busy Orchard Road shopping street. During a visit in 1992, CEO Harald Norvik stressed the importance of close contacts with the market. “We have 1.1 million barrels for sale every day. This big volume makes us one of the most central players in the market for North Sea oil.”[40]Fotnote: Statoil Magazine (print edition), no 1, vol 14, 1992.

He noted that Statoil would be able to benefit in the future from the “sunrise effect” when selling oil – the world’s most traded commodity. Thanks to the time differences between the company’s sales offices, it could market crude oil, gas and refined products 24 hours a day. When the Singapore office closed for the night, it was morning in Stavanger and London. Afternoon in Europe heralded the start of a new day in New York.

Since access to information on oil trades was just as fast during the 1990s in Stavanger and Singapore, no technical barriers prevented all trading taking place in Norway. But the oil industry was also people-based – cultivating contacts was important for winning contracts. That called for a physical presence in Singapore and other leading oil-trade centres.[41]Fotnote: Ibid.

— From left: department head Tore Krogsmyr, trader Kunio Yokokawa and Gunnar Bendiksen, in charge of LPG trading, at the Singapore office. Statoil has become a major player in trading liquefied petroleum gas in the south-east Asian state. Photo: Thomas Førde/Stavanger Aftenblad

Traders – an important role

In 2012, two decades after it opened, staffing at the Singapore office had risen to 45 people. That included 10 traders, out of the 100 overall in the Statoil organisation who accounted for a dizzying NOK 1.1 billion in daily sales.

Oil was not the only commodity traded in Singapore. Asia had become perhaps the most important Statoil market for liquefied petroleum gases (LPG). Comprising propane and butane, this product was primarily purchased in the Middle East and sold on. A cargo of LPG could change both its route and its owner six-seven times before reaching port – hopefully ending with the buyer willing to pay the highest price.

Each trader usually specialised in a single product. They had to pay close attention, be familiar with market conditions and know what drove prices.

Their first job when arriving at work each morning was to secure an overview of the market. Product prices depended on the outlook for global oil demand. Had there been unrest or incidents during the night which affected crude prices? How large was the total supply of oil from the North Sea, the Middle East and – more recently – the USA? If oil stocks, particularly in America, were filling up, it indicated that available supplies were too large and that the price would fall.[42]Fotnote: Henrik Sommerfelt, head of Norway, CMC Markets, 19 April 2020. Was production at Statoil’s refineries running normally? Which products were available for the traders to sell, and in what quantities? When were the products to be delivered? Since all these factors could change rapidly, traders had to be able to interpret the information and take quick decisions, with a fairly large slice of personal responsibility.

Most contracts in Singapore were fixed at around 17.00-18.00. The working day for a trader there was not over until 19.00, which allowed for an overlap with their counterparts at Statoil’s Forus office in Stavanger, who would have just completed their lunch break.[43]Fotnote: Stavanger Aftenblad, 8 January 2012, “The energy market never closes”.

Wider activities

Equinor’s sales and marketing office in Singapore was located at Marina View in 2021, overlooking the busy pleasure-boat traffic. It was no longer confined to sales, but also had responsibility for refining operations elsewhere in Asia. The office has increased in importance, since other parts of Equinor’s business development in the Asian region are run from there.

Statoil had a relatively long history in South America. It had been producing heavy crude in Colombia’s neighbour, Venezuela, since the late 1990s, and was also heavily involved in both oil and gas production off Brazil.

Legal and illegal

— “Norway’s help has been extremely important”. Facsimile: Aftenposten, Monday 6 October 2014

Oil has been Colombia’s most important legal export commodity, primarily to the USA. Traditionally, its economy has been based on agriculture – including the export of coffee and bananas. A more questionable side of the country is that it ranks as a major producer and exporter of cocaine.[44]Fotnote: https://www.fn.no/Land/colombia. That activity has contributed to 50 years of armed conflict between guerrilla groups, the army, right-wing paramilitaries and drug cartels. Negotiations began in 2010 between president Juan Manuel Santos and the Farc guerrillas, and a peace agreement was signed in September 2016.

Santos, who held the presidency from 2010 to 2018, was awarded the Nobel Peace Prize in 2016 for his work on this peace deal, where he had been assisted by Norwegian diplomats.[45]Fotnote: https://en.wikipedia.org/wiki/Juan_Manuel_Santos Unfortunately, the agreement failed to win ratification in a referendum.

Foreign investment increased after the Colombian government took steps during the 2000s to improve security in the towns. Free trade agreements were signed with the USA, the EU and China.[46]Fotnote: https://www.fn.no/Land/colombia.

Statoil explores offshore

Ecopetrol, owned 80 per cent by the Colombian state with private investors holding the rest, was the dominant oil company in the country. All its directors were appointed by the president, and he decided in reality which companies should be awarded production licences.

— Statoil in Colombia. Illustration: Equinor

So it is likely that Santos himself was involved in allowing Statoil to farm into licences in the country.

Like a number of the exploration targets where the company was involved internationally, the deepwater areas off Colombia were almost virgin territory. “We are gaining access to a vast underexplored frontier area through early access at scale, which is in line with Statoil’s exploration strategy,” Nick Maden, senior vice president for exploration activities in the western hemisphere, observed in a press release when a first licence was secured in Colombia.[47]Fotnote:  E-24, 24 July 2014, “Duket for Statoil-debut i Colombia”.

Awarded in July 2014, this holding was in deepwater licence COL4. Spain’s Repsol was the operator, while Statoil had a 33.33 per cent interest.

Two months later, the company could announce that it had farmed into two more licences by buying holdings from Repsol. This involved 10 per cent of the Tayrona licence operated by Brazil’s Petrobras and 20 per cent in Guajira Offshore 1, where Repsol was the operator (see map).

All these licences committed the companies to acquire seismic data, but they were not obliged to drill. All the transactions otherwise had to be approved by the National Hydrocarbons Agency of Colombia (ANH).[48]Fotnote: E-24, 24 July 2014, “Statoil sikrer nytt leteareal i Colombia”.

Statoil established a separate subsidiary in the Netherlands to run the involvement in Colombia. This paid tax to the country and invested a good deal in exploration during 2016-17.

Pulling back

In 2020, the exploration work which Statoil/Equinor had committed to was nearing completion. The subsidiary responsible for this activity no longer had any personnel. No results worth continuing with had been achieved. The subsidiary’s equity was negative at USD 121 million, which represented the funds it had devoted to exploration.[49]Fotnote: Annual report, 2020, Equinor: 308. It was time to withdraw. This fitted with Equinor’s revised exploration strategy, which replaced a broad commitment and working in many countries simultaneously with concentrating on fewer core areas. Colombia no longer featured on that list in South and Central America. Instead, the company chose to concentrate on Brazil and withdrew from Venezuela, Uruguay, Nicaragua and to some extent Argentina as well as Colombia. From being involved in about 30 countries around the world in 2014, Equinor remained active in roughly 15 by 2021.

The Asian economy expanded in 1995 by 7.5 per cent – compared with a growth rate of three per cent for the world as a whole.[50]Fotnote: Stavanger Aftenblad, ”Milliard-satsing for Statoil i Asia”, 7 April 1995, National Library of Norway. Since Asia was – and is – the world’s most populous region,[51]Fotnote: Solerød, Hans and Tønnessen, Marianne, ”Verdens befolkning”, Store norske leksikon, https://snl.no/verdens_befolkning, accessed 16 March 2022. that naturally also attracted attention elsewhere.

Norway’s Labour government under Gro Harlem Brundtland had cast its eye on Asia’s rapidly growing economy, and pursued an “Asia commitment” in 1995-96. That included members of the government, with representatives of the Norwegian business community, travelling to – almost touring – selected countries in the region.

Petroleum, environmental technology, hydropower, ship’s gear and communication systems were identified as particular areas where Norway could acquire a slice of the growing cake.[52]Fotnote: Bergens Tidende, ”Statoil investerer i Malaysia”, 7 April 1995, National Library of Norway. Statoil was one of the companies keen to secure a helping.

Melaka refinery

A rapidly growing economy plus a big population equals a region which needs oil and oil products. Statoil characterised Asia in 1995 as the world’s most expansive oil market.[53]Fotnote: Aftenposten, ”Statoil inn i Asia-raffineri”, 7 February 1995, National Library of Norway. The company was already then negotiating to acquire 15 per cent of the Melaka facility, and this purchase was approved by its board on 31 March 1995.[54]Fotnote: Board minutes, Statoil, 31 March 1995. Its partners were American company Conoco and Malaysia’s Petronas. An expansion phase under way at the refinery was intended to increase its daily capacity to 100 000 barrels oil when completed in 1998.[55]Fotnote: Aftenposten, “Olje fra Nordsjøen gir Statoil gevinst i Asia”, 4 November 1996, National Library of Norway.

Statoil could use its share of the refinery to produce oil products for the Asian market. In the longer term, it also wanted to refine feedstock from its own sources in Asia – such as the Lufeng field off China.[56]Fotnote: Ibid.

The company emphasised that this commitment would be commercially profitable and was not being subsidised by other parts of the business. In particular, it pointed out that a shortage of refining capacity in Asia meant owning a facility made better financial sense than leasing one expensively.[57]Fotnote: Ibid. Statoil was pleased to have the chance to cooperate with its partners in Melaka, whom it regarded as experienced in the refinery business.[58]Fotnote: Stavanger Aftenblad, ”Milliard-satsing for Statoil i Asia”, 7 April 1995, National Library of Norway.

Profits from refining had been rising in Asia since the 1980s, and were now higher than in Europe. [59]Fotnote: Annual report, 1995, Statoil: 27.

But the question is how sensible it actually was for the comany’s reputation to become involved in Melaka.

Compensation claims

Expanding this facility had led to conflicts with the local population. Of the 300 families displaced to make way for heavy industry, 67 were still not satisfied in 1997 with the compensation awarded and had taken legal action. So had 300 fishermen who could no longer work in the waters off the refinery because of new quays and an expanded security zone.

Worst of all, perhaps, the expansion had led to the demolition of two mosques and left two cemeteries inside the refinery site – making it difficult for relatives to visit the graves.[60]Fotnote: Dagbladet, ”Opprør mot Statoil-satsing”, 30 January 1997, National Library of Norway.

— The Melaka refinery, Malaysia. Photo: Equinor

The criticism was covered in several newspaper articles and also expressed by Norwegian environmental organisation The Future in Our Hands (FIVH). Statoil denied that it had any involvement in the issue because permission for the expansion was given before it acquired its stake. The company’s response was therefore that it would raise the matter with Petronas and Conoco and, after doing so, that it had received satisfactory answers.[61]Fotnote: Leer-Salvesen, Tarjei, 1998, I gode hender? FIVH, Oslo: 30.

Furthermore, the Melaka refinery was criticised for refusing to allow its workers to choose their own union and making them join the Petronas “company” union. That was contrary to the principle of free association, according to the NorWatch monitoring project.[62]Fotnote: NorWatch was launched by the FIVH in 1995 to monitor Norwegian commercial projects abroad, with a particular concentration on the environment and human rights. It was wound up in October 2010, but the subject is still on the FIVH agenda. Statoil should either come clean and admit that it violated human rights or pull out of countries which did so, Morten Rønning at NorWatch told leading Oslo daily Aftenposten in February 2000. He maintained that this was a particular problem because the company was so concerned with such rights at home.[63]Fotnote: Aftenposten, “Anklager Statoil for dobbeltmoral”, 29 February 2000, National Library of Norway.

Despite the criticism, Statoil denied – in response to a direct question – that this was the reason why it sold its 15 per cent share in 2001 to Petronas and Conoco.[64]Fotnote: Aftenposten, “Statoil ut av problemraffineri”, 28 February 2001, National Library of Norway. Part of the reason for the sell-out was that the company’s plans in Malaysia and Asia had not developed as intended.

Unfulfilled ambitions

When Statoil bought into the Asian market, it did not regard refining as its only area of commitment and thought of Malaysia as the first step on the road.[65]Fotnote: Kuala Lumpur meeting, 11 August 1997, “Building a retail business in Malaysia”: 1.

Just as Norway and the rest of Scandinavia had been the entry point to the European service station market, the company believed such outlets in Malaysia would be followed by others in Vietnam, China and perhaps other Asian countries. The goal was for its brand to become known throughout Asia.[66]Fotnote: Ibid: 1.

Apart from Germany, where profits were too low, Statoil was building ever more service stations in Europe. The specialists who had been based in Germany were relocated to Malaysia, but this country failed to become the entry point to the Asian market.[67]Fotnote: Ibid: 3.

The explanation may be that it was difficult for a foreign company to open service stations in a country where the necessary licences were basically only available to Malaysians.[68]Fotnote: Ibid: 4. Or a decline in the Asian market could have been responsible.

Economic downturn

A research report in 1999 found that the Norwegian government’s Asia commitment had failed to provide the desired results, primarily because of an economic downturn in the region.[69]Fotnote: Aftenposten, “Mislykket Asia-satsing”, 22 April 1999, National Library of Norway.

In the mid-1990s, Asian oil demand was expected to be up by a million barrels per day to 1998. The reality in March of that year was a fall of 500 000 daily barrels and oil stores filling up.[70]Fotnote: Statoil magazine, no 1, vol 21, 1999. Statoil, Stavanger, National Library of Norway: 19.

The underlying downturn was dubbed the Asian crisis, because it derived from a burst property bubble and speculative borrowing in Bangkok.

This decline in demand had knock-on effects for global oil prices. These dropped by almost 50 per cent from the 1997 peak as a consequence of over-production.[71]Fotnote: Ibid.

Falling prices also affected the refinery sector. Despite an upturn in April 2000, the short time that Statoil had been a co-owner of the Melaka facility was primarily characterised by decline.[72]Fotnote: Dagens Næringsliv, ”Raffinert bonanza”, 11 April 2000; Bergens Tidende, ”Kan takke oljeprisen”, 22 February 2000, both National Library of Norway. But financial considerations were not the only reason for selling out.

Slimming down

— The sale of Statoil’s part in the Melaka refinery can be seen as part of a plan by CEO Olav Fjell to slim down the company ahead of a stock exchange listing. Photo: Øyvind Hagen/Equinor

Aftenposten reported in October 2000 that Statoil was already trying to dispose of its part of the Melaka refinery. This was allegedly part of a plan by CEO Olav Fjell to slim down the company ahead of a stock exchange listing.[73]Fotnote: Aftenposten, “Olav Fjell rydder videre”, 31 October 2000, National Library of Norway.

When the sale had been finalised, preparing for a listing and a desire to streamline the marketing and refining business were indeed cited as reasons.

Although Statoil had many other activities in Asia, such as oil production and crude oil sales, it was made clear that refining in this region would no longer be a core area.[74]Fotnote: Aftenposten, ”Statoil ut av problemraffineri”, 28 February 2001, National Library of Norway.

Statoil would sooner use the resources elsewhere.

While one with Esso involved learning about exploration, the other covered lessons from Mobil in developing the big Statfjord field in the North Sea.[75]Fotnote: The section on collaboration with Esso is based largely on Hanisch, T and Nerheim, G, 1992, Fra vantro til overmot?, vol 1, Norsk petroleumshistorie, Norwegian Petroleum Society, Leseselskapet, Oslo: 370-372. The section on collaboration with Esso is based largely on Moland, Elisabeth Ugland, 2011, Fra lærling til mester: Kunnskap og kompetansebygging i Statoil årene 1972–1986, master’s thesis, University of Agder, Kristiansand, accessed at https://uia.brage.unit.no/uia-xmlui/bitstream/handle/11250/139504/HI-500%202011%20Vsr%20Masteroppgave%20Elisabeth%20Ugland%20Moland.pdf?sequence=1&isAllowed=y.

Assistance with exploration and production

During the discussions in the Storting (parliament) on the award of key and boundary blocks in the Norwegian North Sea, doubts were raised about whether Statoil had the capabilities required to conduct drilling on its own account. So when Esso offered the company a technical assistance pact as part of its application for third-round licences, this was greeted with great interest. Such an agreement would allow Statoil to acquire the necessary expertise.

Providing the companies were awarded licences, the deal was that Statoil would be able to place personnel in Esso’s operational organisation to gain experience. The US partner would initially have day-to-day responsibility for Statoil’s trainees and provide them with further education. As these personnel became qualified, Statoil would take over operational responsibility.

In addition to training in exploration drilling, Esso offered assistance with operating the Ross Rig drilling unit which Statoil had recently chartered.

When the Ministry of Industry awarded new exploration and production licences in November 1974, Statoil was appointed operator of production licence 038 – covering blocks 15/11, 15/12 and 6/3 – with Esso as technical operator. The training could begin.

Statoil’s first well, 15/12-1, was drilled in what later became known as the Sleipner area during July 1975. Esso was officially the technical assistant, but undoubtedly did the job in reality. The Statoil personnel were apprentices.[76]Fotnote: Equinor.no, 4 July 2000. Accessed at https://www.equinor.com/no/news/archive/2000/07/04/DrillingFor25years.html. The well was dry, but the Norwegians secured the experience they needed to stand on their own feet and establish a technologically competent organisation.

The following year, Statoil took its qualifying test by drilling a first well on its own account. It was again drilled from Ross Rig, this time with success, in block 1/9 close to Ekofisk. The structure was named Tommeliten Alpha.

One goal had been reached. The company had the in-house expertise to serve as an exploration operator.

Collaboration over Statfjord

While Statoil was learning how to drill and operate its own exploration rig, another department of the company began a training programme in field development. This was based on a collaboration agreement with Mobil for production licence 037, which embraced the Norwegian share of the Statfjord discovery. Developing this field was to be crucial in building up sufficient expertise at Statoil for it to become a fully qualified operator on a producing field.

The licence terms specified that Statoil could take over the Statfjord operatorship after 10 years. It then had to become familiar with the field. Mobil undertook to transfer the necessary expertise, with Statoil involved in as many as possible of the processes and decisions relating to Statfjord.

As a result, the young company followed at close hand and participated actively in the development of one of the world’s largest offshore oil fields.

Statoil started building up a shadow organisation which was intended ultimately to take over completely. This expanded rapidly, from a couple of hundred staff to almost a thousand.

The company had “the right to have a reasonable number of its employees work with the operator to achieve appropriate training of Statoil’s personnel at different levels”.[77]Fotnote: Hanisch, T and Nerheim, G, op.cit: 370.

Initially, Mobil contributed the most important share of the labour force and the technology. But it was under way with training up Statoil employees from as early as 1973. A number of the latter were sent around the world to the US company’s various training facilities. The Dallas research centre was frequently used. During seismic surveys on Statfjord, Statoil was represented by a person who observed and worked with Mobil’s exploration group in London.

While many went abroad to train, several learning opportunities became available at home. Engineers from Statoil were seconded for long periods to Mobil’s internal organisation in Stavanger during the winter of 1974-75. Statoil requested that these personnel be given challenging assignments, and they were expected to have opportunities for to participate actively in all areas of the work.

To lead the actual development, Mobil established a separate project task force for each platform. This was where the largest number of Statoil personnel were seconded. While the task forces reported directly to Mobil, their members could be required by Statoil to provide the information it wanted. That meant the company could take care of all its interests – without being the operator.

Statoil established a separate department in 1975 to represent it in all matters relating to Statfjord. Led by Olav K Christiansen, this team worked closely with the company’s other units.

The collaboration with Mobil over developing Statfjord was crucial for Statoil’s build-up of expertise and for fitting it to take on larger assignments – such as the Gullfaks operatorship.