Learn from the past

Bente-Nyland
18.05.2015
History is full of far-sighted people, and that holds true for Norway’s oil saga as well. We should learn from them, particularly when many observers are talking down the Norwegian oil and gas sector.

This issue gives space to several oil pioneers who deserve the nation’s thanks. In the years before and after the first offshore licensing round in 1965, they laid the basis for today’s activity on the NCS.

They were visionary, and they thought and acted for the benefit of the community.

 

"The whole nation is still benefiting from the legal framework and the organisation shaped at that time."

 

NOK 200-250 billion is due to be invested annually on the NCS over coming years. That is on a par with a few years back, when all the indicators seemed to point sky-high. We in the NPD were concerned at an early stage that a high level of activity would put pressure on prices – and boost costs.

Eight development projects are currently under way on the NCS. We are still seeing great interest by the industry in new licences, and the long-term activity picture looks good.

In that perspective, it is important that Johan Sverdrup does not create a false sense of security. While this North Sea field alone will provide thousands of jobs for several decades to come, it represents an exception and more such giant finds are fairly unlikely.

Many discoveries still lack a plan for development and operation (PDO), but only a few are genuinely time-critical – such as “Trestakk” and “Maria” in the Norwegian Sea.

A lot of these finds, particularly in the North Sea, will be developed with subsea solutions tied back to existing facilities.

The level of activity is declining, and the number of exploration wells drilled this year is likely to be below the 2014 figure of 56.

We are assuredly experiencing a crisis where many people have lost their jobs. Those who have failed to find new employment are naturally suffering personally and in their pocket.

But these conditions are likely to be transitory. So it is depressing to see that the cuts being made by the companies en masse are once again frightening young people away. The decline in applications to study petroleum-related subjects at university is dramatic.

That makes it reasonable to ask whether the oil companies have thought this through properly, given the struggle over recent years to recruit more engineers and geoscientists.

The level of activity on the NCS is pretty certain to remain high for the next two decades. So we will need more good brains to replace those of today’s personnel who are now in their 50s.

All the cuts mean that many people are chasing each new job which comes on the market. We have advertised four vacancies, and received around 230 applications.

But what worries us is long-term recruitment to the industry. And the oil companies do not appear to have learnt anything from the last downturn. They should take the time to read the comments from Norway’s oil pioneers in this issue.

Bente Nyland
director general