Time of change

Nyland
24.06.2016

If we want something to endure, we must change it. That message was conveyed by US president Bill Clinton in his 1993 inaugural address. Some would argue that we were too slow off the mark in making changes when the oil industry downturn began. Since then, however, many companies have got a grip and are now working well to emerge unscathed from these demanding times. Many people have unfortunately lost their jobs and, in the worst case, valuable expertise may have been lost.

Nor do we at the NPD believe all the players have everything in order. A few too many decisions are still being taken in a short-term time frame for us to think that. My job, as it was described by the Storting [parliament] when I took office, remains unchanged: the NPD must ensure optimum utilisation of all profitable resources.

We don’t know how much value a field has generated until its resources are recovered. The oil price today isn’t what counts then, but what it’s been over the life of the field. Too much emphasis gets placed on quarterly results on our industry, which is long-term by nature. That’s particularly true when fields like Ekofisk, Troll and Johan Sverdrup are set to produce for roughly 50 years.

That said, we see old branches putting out new shoots. The companies are – once again – showing a great wealth of ideas and the ability to adapt when circumstances demand it.
As Statoil’s drilling supremo Geir Tungesvik says in this issue, “this is more a case of attitudes and efficiency than new technology for us”.

If only the industry had been more conscious of such thinking when costs shot up and bespoke technology was commissioned – without adequately checking whether a simpler solution wouldn’t have done the job just as well.

And when oil prices slumped on top of this, we ended up in the impoverished position which many are now painfully making their way through.

But developing and implementing technology which can meet tomorrow’s needs is important. The NCS has always been regarded as innovative. Perhaps that position has been lost? Perhaps the industry didn’t have the time to think innovatively in the recent good times – and now can’t afford to?

What remains to be seen is whether enough of a lesson is drawn from this downturn. Petroleum is a cyclical business, after all. A future where the ups and downs recall rolling English scenery is preferable to an Alpine landscape.

 

Bente Nyland
director general