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NORWEGIAN OIL INDUSTRY

NORWEGIAN OIL INDUSTRY. GROUP 8 Fiona Tang Juliana Silva Murat Zhurebekov Thomas Wehr. Contents. History and Inside perspective of Norwegian Oil Industry Competitiveness of Norwegian Oil Industr y Government Petroleum Fund Employment Players in the oil sector

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NORWEGIAN OIL INDUSTRY

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  1. NORWEGIAN OIL INDUSTRY GROUP 8 Fiona Tang Juliana Silva Murat Zhurebekov Thomas Wehr

  2. Contents • History and Inside perspective of Norwegian Oil Industry • Competitiveness of Norwegian Oil Industry • Government Petroleum Fund • Employment • Players in the oil sector • Development tools for the oil industry • Oil industry prospects

  3. History of Norwegian Oil Industry • In the 1960s, National oil companies were established both in the Middle East and in Europe. • The Ekofisk field was discovered in December 1969.

  4. Norway’s disadvantage in oil industry in the 1960’s • No geologists • No petroleum economists • No lawyers specializing in petroleum issues • Only transport crude oil

  5. Norway's OilIndustry Adventure • Through the 70s and 80s, enormous new findsof oil were made. • Oilfields were developed with the sophisticated technology.

  6. Inside perspective of Norwegian Oil Industry • Oil extraction: Mil NOK 304 099 (2001) • Remaining crude oil reserves:1 833 mill Sm3

  7. Inside perspective of Norwegian Oil Industry • Competition • Internationalisation

  8. Competitiveness in oil sector

  9. Exports of crude oil 2001

  10. The Norwegian Government Petroleum Fund

  11. The Main two Purposes of the Fund • It shall act as a buffer to smooth short-term variations in the oil revenues • It will serve as a tool for coping with the financial challenges connected to an ageing population and the eventual decline in oil revenues, by transferring wealth to future generations

  12. How the Fund works Transfer to finance non-oil budget deficit Expenditures Oil revenues + Return on investments Non - oil revenues FUND BUDGET

  13. Management Model The Ministry of Finance decides: • The strategic investment decisions (the benchmark portfolio) • The risk limits Norges Banks tasks are: • To carry out the investment strategy • Risk management • Accounting and reporting • To offer professional advice to the Ministry

  14. Benchmark portfolio Equities 40% Bonds 60% America 30% Europe 50% Asia/Oceania 20% America 30% Europe 50% Asia/Oceania 20%

  15. Investment of the GPF (NOK million)

  16. Employment

  17. National Oil Management POLITICAL FRAME COMPANIES • 1972: state-owned oil company Statoil SAS established (partially privatized in 2001) • Privatization created state-owned company Petoro AS (SDFI-management) • Norsk Hydro SAS as well strong state influenced (51%)

  18. Initiated tools for the development of the oil industry INTSOK-Norwegian Oil and Gas Partners • founded 1997 with petroleum industry • deliveries to international markets • revenues from abroad to NOK 50 billion 2005  OG21-Oil and Gas in the 21st century • study by oil companies, supplies industry and research institutions (MPE initiated) • Technology guarantee competitiveness • Future: improved recovery, stronger internationalisation, deep water, environmental protection

  19. Norwegian´s Industry Clusters (Source: INTSOK) Value Chain Emerging Clusters Established Clusters Reservoir/ Seismic Offshore Drilling Drilling equipment Down-hole and Well Services Subsea Platforms/fixed/floaters Field oper- ations and transporta- tion Decomis- sioning TYPE OF COMPANY Oil Companies Reservoir and Seismic Design and Project Manage- ment Drilling Operator/ Duty holder Main Contractors Decom Supply chain System Integrators E, I&T Down-hole and Well Services Subsea Drilling equipment Product Suppliers MMO & Transpor- tation Equipment and Models Marine Equipment Service Companies

  20. Drivers in the oil economy New fields • deep water exploration • Barents Sea • offshore markets in West Africa and North America Substitutes • gas, condensates • green energy

  21. Customer needs • Corporate social responsibility • Local presence • environmental aspects Technology • Norway offshore approach • OG 21 (recovery rate)

  22. Gas stats • GAS (10% Europe’s C 30% ) • World's biggest operator of submarine gas pipelines • 90 years production perspective

  23. Conclusion • Norway build up a strong oil industry in the last 30 years • Is and will continue to be an oil economy for the following decades • Norwegian gas production has a strong forecast • investing oil revenues on the promotion of the diversification of this country’s economy

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