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Our Arctic Neighbors: Norwegian association aids contractors Petro Arctic aims to make small companies from northern regions competitive in bids for work on offshore oil and gas projects Sarah Hurst For Petroleum News
Companies based in Norway’s sparsely populated north face an uphill battle to win contracts on oil projects against larger rivals from the south, but an association called Petro Arctic based in Hammerfest is helping to level the playing field. Founded in 1997 and financed by state-owned oil company StatoilHydro, Petro Arctic is now northern Norway’s largest supplier network, with more than 350 member companies from the counties of Finnmark, Troms and Nordland.
In an e-mail interview with Petroleum News, Petro Arctic’s general manager, Jan Egil Sorensen, explained how the association is positioning companies from northern Norway to work on offshore Arctic projects such as Snohvit and Shtokman. Snohvit is StatoilHydro’s already producing natural gas and condensate project in the Barents Sea, and Shtokman is a yet-to-be-developed natural gas field in the Russian part of the Barents Sea.
Petro Arctic’s work contributed when northern Norwegian companies managed to obtain 7.9 percent of the contract value of Snohvit in the construction phase, Sorensen said. That totals up to NOK 3.6 billion ($601 million) and was six times more than what had been expected, he added. To continue winning more contracts the companies need to raise their level of competence, including having a health, safety and environment plan, Sorensen said. They can also register in Achilles, another supplier network for companies that want to work on North Sea oil projects.
Hammerfest center of activity A recent study that described the positive economic effect of the Snohvit project on Hammerfest was correct, according to Sorensen. “Hammerfest has turned from stagnation into a state of development and growth,” he said. “Hammerfest has become a center for petroleum activity in the Barents Sea and will develop with new activity.”
East Finnmark, especially Kirkenes, will have several opportunities to become involved in the Shtokman project, as Kirkenes is the closest western harbor, Sorensen told Petroleum News. “The Norwegian petroleum industry (only very few northern Norwegian companies) will become very important contractors to Shtokman offshore. Norway holds some of the world’s best offshore technology,” he said.
In the coming year, one of Petro Arctic’s priorities is to bring member companies into development of the Goliat oil and gas field in the Norwegian Barents Sea with operator Eni Norge. Goliat is about 31 miles southeast of Snohvit and contains an estimated 250 million barrels of oil equivalent — 75 percent oil and 25 percent gas. Petro Arctic also serves as a contractor network for StatoilHydro’s Norne producing oil and gas field in the North Sea, Sorensen noted.
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