Oil veterans look back
02/03/2007 Forty years have passed since the first well was drilled on the Norwegian continental shelf. Four key pioneers from the industry ministry's oil office - forerunner of today's petroleum and energy ministry - got together recently to celebrate the anniversary.
text: Ina Gundersen. photos: Emilie Ashley
Four oil pioneers meet again: Olav K Christiansen (left), Fredrik Hagemann, Nils B Gulnes and Farouk Al-Kasim.
Several international oil companies began to look at the NCS in the early 1960s. But neither ordinary Norwegians nor the country’s leading politicians had much grasp of what was happening.
Nobody had any idea of the huge wealth hidden beneath the seabed off Norway’s shores. Indeed, it was not many years since the Norwegian Geological Survey (NGU) had virtually written off an oil future for the nation.
So it is perhaps hardly surprising that interest in working as one of the country’s petroleum bureaucrats was relatively low in the early years.
“The Ministry of Industry’s mining office needed a lawyer who could speak English to work on something called oil,” recalls Nils B Gulnes.
“When this post was advertised, there were no takers. I came straight from university and was offered the job more or less over the table.”
He leans back in his chair and laughs heartily at the recollection of being the first person recruited by the ministry to work on oil issues in 1965.
A separate oil department was established the following year, when Ocean Traveler also spudded the first well in the Norwegian North Sea.
Mr Gulnes was the first head of the new department, accompanied by mechanical engineer Olav K Christiansen and geologist Fredrik Hagemann – later director-general of the NPD.
They were subsequently joined by Farouk Al-Kasim from Iraq to create a quartet who played a central role in building up government administration of Norway’s petroleum resources.
“They didn’t have a post on the establishment to offer me,” recalls Mr Hagemann. “So I was given a research fellowship in petroleum geology.
“My colleagues at the time in the NGU thought I was an idiot to make such a choice. But I’d always been fascinated by the oil industry, without ever thinking it would extend to Norway.
“The oil office was initially temporary. That shows how little faith the Norwegian authorities had in oil back then. Nor were the politicians interested. So we had pretty free hands.”
He and his three colleagues were kept busy, often working far into the night. But it was also fun – they all got on, and were doing a job which proved highly significant for the nation.
Their work was paralleled by the efforts of the lawyers at the Ministry of Foreign Affairs, headed by director-general Jens Evensen, to secure Norway’s interests on the continental shelf.
Mr Evensen also chaired the government’s petroleum council, which was established as an advisory body in 1965 with Mr Gulnes as its secretary.
“The early years were quite fantastic,” says Mr Al-Kasim, who moved from Iraq to Norway with his Norwegian wife because their youngest son was born with cerebral palsy.
“We believed that he would get the best treatment here. I envisaged working in London, and certainly hadn’t thought of a job in Norway.”
With experience from his homeland as a petroleum geologist, he turned up at the oil office one day in 1968 – a year before Ekofisk was discovered in the North Sea.
“I was waiting for a train which was due to leave that evening,” he says. “Almost as a way of passing the time, I looked up the address of the industry ministry.
“There I met Mr Christiansen, and asked for the addresses of the oil companies. After chatting for about an hour, I was asked to return the same afternoon. When I got on the train that evening, I knew I had job prospects in Norway.”
Mr Al-Kasim was hired as a consultant – and at a higher salary than the prime minister.
“Per Borten, who was premier at the time, approved this figure. We needed a specialist like Farouk,” Mr Christiansen explains today. “Our oil expertise was pretty thin.”
Mr Gulnes emphasises that the oil office staff received good help from the authorities in other countries, particularly the UK. And they paid many visit to a number of oil-producing nations.
The discovery of Ekofisk led to a substantial boost in petroleum interest among politicians. Mr Borten decided that the whole government should go back at school. So was the standing committee on industry in the Storting (parliament).
Their teachers were the quartet at the oil office. Overnight, this department also received 40 new establishment posts. Norway’s oil age was born.
“Efficient exploitation of our offshore resources has been a guiding principle from the start,” notes Mr Hagemann. “Since the first licence awards, the oil companies have been required to pursue efficient exploration of the NCS and to optimise hydrocarbon recovery.
“I think we’ve succeeded in these aims, not least because we were able to secure very able personnel.”
He points out that, while Norway’s oil expertise was not great during the early years, the country had long maritime traditions and a high level of technical skill.
“This industry arrived when Norwegian shipping was in decline. We had the maritime know-how, seafarers used to being away from home and able engineers. A number of unemployed people could also go straight into the oil business.
“Developing and adopting new technology mean that Norway’s offshore activity has revolutionised the whole drilling sector. The North Sea, with its difficult conditions, functioned as a huge laboratory for the entire petroleum industry.”
Mr Christiansen believes that the development of the Norwegian oil activity over the past four decades can be compared with the advance from the Ford Model T to today’s cars.
“This business has changed enormously since we started,” he says. “There’s been a quantum leap in every area, from technology and exploration to drilling and transport.”
“When I consider the growth in prosperity which the oil industry has brought, I’m not sure it’s been entirely beneficial,” reflects Mr Gulnes. “We’ve become too rich.”
But Mr Christiansen disagrees. “We’ve secured resources we wouldn’t otherwise have had the remotest chance of getting. Many of the side effects have been unfortunate, but I don’t understand those who say that oil has been a misfortune for Norway.”
Mr Hagemann observes that it can be very tempting to spend the government’s accumulated oil wealth – even though every one agrees that pumping large amounts of cash into the economy is not good.
“Moreover, while a high oil price benefits us and a few other oil-producing countries, it has a negative effect on the rest of the world – and particularly the poor.”
“Doing as good a resource management job as we’ve done calls for the same underlying factors, such as a stable political system,” adds Mr Al-Kasim.
“It’s illusory to believe that the Norwegian model can simply be transferred to other parts of the world. Before elements from this model can be applied, we need to understand the societies we want to help in developing their petroleum administration.”
History in brief
- “The chances of finding coal, oil or sulphur on the continental shelf off the Norwegian coast can be discounted.” (Letter from the Norwegian Geological Survey to the Ministry of Foreign Affairs in 1958)
- Discovery of the big Groningen gas field in the Netherlands during 1959 suggested that a belt of hydrocarbon-bearing rocks might extend across the North Sea towards the Norwegian coast.
- Phillips Petroleum asked the Norwegian government in 1962 for a sole licence to explore for and produce oil and gas on the NCS. This request was not granted, but prompted efforts to lay the basis for petroleum activities off Norway.
- A continental shelf committee was appointed in 1963 to support the industry ministry in preparing legislation and regulations. On 21 June, the Storting (parliament) passed an Act relating to exploration for and exploitation of submarine natural resources – which comprised just six brief sections.
- The Government Petroleum Council was established on 9 April 1965 to advise the industry ministry on exploring for and exploiting submarine petroleum deposits on the NCS.
- A growing workload prompted the creation of an oil office in 1966.
Ocean Traveler spudded the first Norwegian offshore well for Esso in 1966, and found traces of petroleum.
- Norway became an oil nation on Christmas Eve 1969, when Phillips announced the discovery of the Ekofisk field in the North Sea. “I hereby declare that the North Sea, from here to the North Pole, is a huge oil basin,” Ed Seabourn, platform manager on Ocean Viking, told the company’s Stavanger office.
- The Storting voted on 14 June 1972 to establish the NPD and Statoil
Sources: Norwegian Oil History, by Torbjørn Kindingstad with Fredrik Hagemann (ed) 1001 brønn, (1000 wells) by Bjørn Vidar Lerøen. Oljedirektoratet 1973-1983 (NPD 1973-1983), by Jan Hagland
Fredrik Hagemann - 77
Nils B. Gulnes - 71
Law degree, University of Oslo, 1964. Ministry of Industry, 1965-73. Vice president, Den norske Creditbank, 1973-85, president, Amerada Hess Norway, 1985-2000. Member of the Grette law office, chair, Natural History Museum, University of Oslo, and BoltSafe, various directorships. Executive adviser, Idemitsu Petroleum Norge.
Olav K. Christiansen - 68
Farouk Al-Kasim - 70