Worldwide: Norwegian Oil And Gas Technology And Know-How Driving Deep Water Activity

Introduction

The Norwegian oil and gas industry has lasted for almost five decades, and the activity has established the petroleum sector as the most important industry in Norway, counting for more than 23% of the total value creation in 2012. The petroleum production on the shelf has added more than NOK 9000 billion to the country's GDP over the about 40 last years1. The value creation in the sector positions Norway in the top world ranking due to the significant trade surplus2.

Today 76 fields are in production and produced in 2012 about 1,9 mill barrels of oil per day and about 111 bill standard cubic meters (SM3) gas. Norway is ranked as the seventh largest oil exporter and the fourteenth largest oil producer in the world. In 2011 Norway was the third largest gas exporter and the sixth largest gas producer in the world.3

Yesterday Created Today

When they gave their opinion in connection with the UN Geneva conference concerning a law for the oceans in 1958, Norwegian geologists were quite clear that they did not believe that there would be oil or gas on the Norwegian continental shelf. Nevertheless, following a successful survey in Holland, US oil companies got permission to conduct geological surveys in 1962. At this stage Phillips Petroleum applied for exclusive rights to search for oil and gas in the Norwegian continental shelf. Instead Norway, following a declaration of the rights given in the Geneva convention in 1958, formed the Act of 21 June 1963 No. 12, which declared "The right to submarine natural resources is vested in the State" and that "The King may grant Norwegian or foreign persons ... to explore or exploit the natural resources." Following this law Norway divided the continental shelf in blocks and invited companies to apply for licenses.

In 1966 the first rig began drilling activities for Esso, but it was not before 23rd December 1969 that Phillips Petroleum discovered Ekofisk, the largest oil field ever found and in 1971 the first oil was produced. The field also contained gas, which later were piped to the continent.

In 1971 the Norwegian Parliament (Stortinget) prepared principles for the oil and gas industry, later referred to as the "10 oil commandments"4, which formed the basis for the future Norwegian politics on the sector:

  1. National supervision and control must be ensured for all operations on the Norwegian continental shelf (NCS).
  2. Petroleum discoveries must be exploited in a way which makes Norway as independent as possible of others for its supplies of crude oil.
  3. New industry will be developed on the basis of petroleum.
  4. The development of an oil industry must take necessary account of existing industrial activities and the protection of nature and the environment.
  5. Flaring of exploitable gas on the NCS must not be accepted except during brief periods of testing.
  6. Petroleum from the NCS must as a general rule be landed in Norway, except in those cases where socio-political considerations dictate a different solution.
  7. The state must become involved at all appropriate levels and contribute to a coordination of Norwegian interests in Norway's petroleum industry as well as the creation of an integrated oil community, which set its sights both nationally and internationally.
  8. A state oil company will be established which can look after the government's commercial interests and pursue appropriate collaboration with domestic and foreign oil interests.
  9. A pattern of activities must be selected north of the 62nd parallel, which reflects the special socio-political conditions prevailing in that part of the country.
  10. Large Norwegian petroleum discoveries could present new tasks for Norway's foreign policy.

In 1972 Den norske stats oljeselskap a.s (Statoil), the state-owned oil company, and the industry-regulating organization, the Norwegian Petroleum Directorate (NPD), were established. The latter was later divided into Norwegian Petroleum Directorate and Energy and the Petroleum Safety Authority Norway (PSA). PSA is organized under the Ministry of Labour (NPD under the Ministry of Petroleum and Energy) and has the responsibility for health, safety and working environment on the continental shelf.

In the beginning the state owned 50 per cent in each production license. Later Stortinget decided that this proportion could be increased or reduced in each case.

Statfjord was founded in 1974—one of the world's largest offshore oil discoveries.

Midgard, part of Åsgard off mid-Norway, was discovered in 1981, and Snøhvit gas field in the Barents Sea was discovered in 1984. [Snøhvit later ranks as the world's northernmost producing field, and utilizes the longest multiphase flow transport system (unprocessed gas, water and lighter hydrocarbons are sent together through the same pipeline) on the planet.] In this year it was also decided to take a proportion of Statoil's holdings in a number of fields transferred to a special account—later to become a part of the oil fund.

In 1986 the Sleipner East and Troll field developments were initiated, making it possible for Norway to become one of the most important energy exporters to the European market.

In 1992 the installation of the Haltenpipe gas line between Heidrun and Tjeldbergodden in Mid-Norway (245 km long) was approved and completed in 1996.

In 1997 Ormen Lange was discovered and came on stream in 2007. This field is positioned in deep water, 850 – 1100m, which initiated new development solutions.

Norway has always imposed strict environmental regulations on the petroleum industry; for example, permanent gas flaring was prohibited on the oil fields from the beginning and later Norway introduced carbon tax which made the industry take a number of steps to reduce the greenhouse gas emissions.  The Ekofisk Bravo platform had the first uncontrolled blowout in 1977 and this incident initiated strict safety and environmental regulations on the Norwegian continental shelf. The Alexander L Kielland disaster in 1980, which killed 123 people, necessitated steps, which in turn has made Norway into a world leader for safety. 5

Footnotes

1. NPD's website, Publications, "Fakta 2013",  The petroleum sector – Norway's largest industry

2. Ernst & Young, "The NCS – a bundle of opportunities", ONS Norway August 19th 2013

3. NPD's website, Publications, "Fakta 2013", The petroleum sector – Norway's largest industry

4. Regjeringen.no, White paper no. 28 (2010 – 2011), "An industry for the future – Norway's petroleum activities", Chapter 1 (unofficial translation of chapter 1)

5. NPD website, Publications, "Facts 2013", Norwegian Petroleum History, The Norwegian Oil and Gas Association's website, Facts, "Petroleum History"

To view full article click here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions