Out of the echo chamber

28.06.2017
A mood of light euphoria grips Terje Søviknes after his first trip offshore, when he has literally looked down on Norway’s oil wealth. That made a big impression on the new minister of petroleum and energy.

| Bente Bergøy and Sverre S Jarild (photos)

Alliances. "People often find themselves in circumstances where they stay in their own echo chambers," says Terje Søviknes. “If the petroleum industry is to have the future I hope it gets, it must build alliances with other social players.”

Alliances.
"People often find themselves in circumstances where they stay in their own echo chambers," says Terje Søviknes. “If the petroleum industry is to have the future I hope it gets, it must build alliances with other social players.”

 

The Progress Party politician says he is not often to be found in his office. He prefers to be handson, out in the field, where things are happening.

“I’m so incredibly impressed by this industry,” he cries. “We’re a world leader in so many areas – subsea technology, rigs, clean production …

“I can’t see how it’s possible to run all this, the platforms and everything which happens far, far beneath the seabed. It’s the ultimate in engineering skill. It leaves me gasping!”

Søviknes enthuses about his helicopter ride out over the Norwegian Sea to visit Deep Sea Stavanger. The Odfjell rig is drilling production wells on Maria at the moment.

This field will be produced in an intricate interaction with neighbours Kristin, Heidrun and Åsgard, where the wellstream is to be piped to the first of these for processing.

Heidrun will deliver water for injection in the Maria reservoir, while the processed oil is transferred to Åsgard for storage and offshore loading. Gas goes to Kårstø near Stavanger.

“Just imagine, the rig runs two operations simultaneously – that’s so efficient, full speed ahead,” says Søviknes. “Once the field’s on stream, nobody can see it. Ships can sail right over the seabed facilities.”

He is a declared technological optimist. “Technology represents the key to reaching climate goals, not prohibitions and restrictions.”

 

"Technology represents the key to reaching climate goals,
not prohibitions and restrictions."

 

Travelled

The minister has begun to settle in after 100 days in the job. He has travelled all over Norway, talking to ordinary workers and company executives.

Visiting suppliers, technology enterprises, government agencies and oil companies, he has seen, asked, listened and learnt about their work, challenges, expectations and concerns.

“If you’re going to have a full understanding of the position, it’s important to meet people and be hands-on where things are happening,” he emphasises.

He has always been keen on the social perspective. “Politicians can’t do it all. As council leader in Os, I often worked for tripartite collaboration with industry and volunteers.

“That’s a good model. Cooperation with other players is extremely important, not least in the oil and gas industry. We mustn’t get too shut off.”

People often find themselves in circumstances where they stay in their own echo chambers, Søviknes observes. That can be secure and comfortable, but hardly forward-looking.

“If the petroleum industry is to have the future I hope it gets, it must build alliances with other social players,” he emphasises.

As the minister for Norway’s largest and most important industry, he has a responsibility for ensuring that the value created benefits the whole nation – including future generations.

In his view, the sector’s poor reputation is undeserved. “It reflects the combination of a couple of factors which emerged at roughly the same time.

“After the oil price slump in 2014, many participants in the public debate seemed to think oil revenues were no longer so important for Norway. There was much talk about restructuring and the green shift.”

Then came the Paris agreement and the big climate debate. “The result in Norway has been a very polarised discussion,” Søviknes says. “People are either for producing fossil energy, or they want to save the planet.”

He takes the reputational problem seriously. “We’re dependent on recruiting skilled hands and wise heads to continue developing the expertise base we’ve built up over 50 years.

“This base is the really big asset – it’s the one which allows Norway to lie among the front runners for technological progress and right in the lead within the oil and gas sector.”

 

Concerned

Søviknes admits to being worried about the sharp drop in applications for petroleum-related courses. Few students mean it is only a matter of time before the teachers go too – which would be stupid, since the industry needs people in coming years.

He also worries about attitudes to oil among the young. “It’s super that youngsters are involved with and concerned about the climate, and they’re undoubtedly more idealistic than us older folk.

“But we must get across the fact that it’s possible to have both. We can reach our climate targets – and explore for and produce oil and gas.”

He appreciates that youngsters cannot be reached through traditional channels such as TV, radio and newspapers. “Both politicians and the industry must get better at being where young people are, and communicate more with then there.”

Søviknes has taken one step through his initiative on establishing a youth panel, and is recruiting youngsters to help on the message and the channels.

The most important message the minister wants to get across is that if there is one place where people can really make a difference for the climate, it is the energy sector.

And that holds particularly true for oil and gas. Technological advances can have a huge impact. “We must balance the debate and get the facts across,” he emphasises.

 

Perspectives

Søviknes points to the recent report on Perspectives for the energy transition. Investment needs for a low-carbon energy system from the International Energy Agency (IEA) and the International Renewable Energy Agency (Irena).

”They’ve produced scenarios on what can be done about the world’s energy position to achieve the climate goals set in the Paris agreement,” he explains

”These agencies believe it’s important to invest in wind, solar and other renewable energy forms, but underline that demand for oil and gas will remain high.”

Declining production from existing fields means that the companies must continue to explore and bring new discoveries on stream.

”The IEA/Irena scenario for a low-emission society in 2050 assumes that as much as 40 per cent of the energy will come from fossil fuels.

”If that’s the case, why shouldn’t Norway also contribute? We have a tradition of being a front runner, and emissions from our production are among the lowest in the world.”

Although the trend is towards more renewables, oil and gas will continue to be produced. Norwegian gas can replace coal in the EU. The UK, for instance, has a clear policy in this area to reduce emissions.

In late April, Britain experienced its first day without coalfired energy since the industrial revolution, and the government is resolved to eliminate this source by 2025.

 

On the go. The minister is not often to be found in his office. He prefers to be out in the field.

On the go.
The minister is not often to be found in his office. He prefers to be out in the field.

 

Proud

The minister is proud of Norway’s achievements in the oil and gas sector, and wants to eliminate the ”bad guy” image which the industry has acquired.

”We must get much cleverer at relating value creation to things which mean something for ordinary people – schools, care of the elderly, transport, health, police and hospitals,” he says.

”Oil revenues finance the welfare state. Those working in the petroleum sector used to be regarded as heroes, now they’re rogues. That’s extraordinary and unjust.”

He also finds the media debate is conducted between him as minister, a few politicians and the environmental organisations – not between the political parties and the voters. ”That makes the exchanges a little rarefied,” he argues.

Asked to sum up the status of the NCS, Søviknes praises the job done by the oil companies and the supplies sector in recent years.

”The industry has really got a grip in strengthening its competitiveness. We’re constantly getting reports that planned developments are cheaper and drilling is going faster.”

He emphasises how important it is that these savings last, and that the industry has learnt. ”When the companies were hardly making money despite top oil prices, it was high time to reef the sails.”

The Conservative-Progress Party coalition has been fully aware of the importance of giving the industry access to new exploration acreage to maintain activity on the NCS.

Since it took office in 2013, 241 production licences have been awarded and consultations held on the blocks proposed for the 24th licensing round.

The government has also announced the 2017 awards in predefined areas (APA) with a substantial expansion of the acreage on offer, particularly in the Barents Sea.

”Big reserves still exist on the NCS,” Søviknes notes. ”The NPD has doubled its resource estimate for the Barents Sea, which is exciting in a longer perspective. It’s important to get across that we have assets to exploit for a long time.”

The third success factor he highlights is the change in the player mix on the NCS. Statoil remains the heavy locomotive, but companies such as Lundin, Aker BP and other smaller participants have contributed different perspectives and new methods.

 

Campaign

”Following the exploration campaign in the Barents Sea this summer will be extremely interesting,” the minister emphasises. ”Much of the attention in coming years will be on these waters.

”The future lies in the far north. Two fields are on stream there after 40 years of exploration – Snøhvit and Goliat. Alta/Gohta are now in the offing, with more searching to come. That’s exciting.”

He adds that the results of this year’s campaign will affect interest in the 2017 APA and the 24th round. A window of opportunity is open for boosting activity in the Barents Sea.

”The job the NPD has done in mapping the resources is very important. More of this may be needed, and a political discussion will then begin on whether the time has come for an impact assessment and a possible opening process.”

Søviknes emphasises that the Progress Party wants this to be achieved during the four-year life of the Storting (parliament) due to be elected this September.

He points out that Norway is blessed with oil, gas, water and wind. The country has always had a debate over utilisation versus conservation, and there is no reason for this to end.

”We must have that debate and apply the management knowledge we possess when deciding whether to open Barents Sea North for petroleum operations.”

In his view, it is important to get the facts on the table in order to secure a genuine political decision on which areas are to opened, which will be left closed and what the terms should be.

”But the debate on what we should do with the Barents Sea could become relevant long before we’ve expected it,” Søviknes warns.

”If the Russians start to drill and make discoveries, we must take care of Norway’s interests. That we will – the boundary treaty specifies collaboration over producing fields with resources on both sides of the dividing line.”

 

Busy

The minister has a lot he wants to do, and is busy. He was recently dubbed Terje ”Full Speed Ahead” Søviknes in leading Oslo daily Aftenposten – a label he is happy to accept.

”I’m a man who gives my all in everything I do. I’ve won renewed trust as council leader in Os four times, and believe that has something to do with being committed and decisive.”

Asked what he has managed to achieve during his first 100 days in his new job, his response is forthright:

”The government’s been on the offensive with the 2016 APA, and we’ll soon be announcing the 24th round. I’ve otherwise sought to talk up the industry and to boost optimism – both internally and among ordinary people. We have an incredible lot to be proud of.”

What happened to the heroes? The petroleum and energy minister wants to talk the industry up – its “rogue” image is undeserved, he says.

What happened to the heroes? The petroleum and energy minister wants to talk the industry up – its “rogue” image is undeserved, he says.

 

"We must balance the debate and

get the facts across."