Upstream, Downstream, One Voice

Big Statoil investments in the North

Statoil’s multi-billion investments at Johan Castberg, Polarled, Aasta Hansteen, Snefrid Nord, Askeladd and the exploration campaign in the Barents Sea are creating spin-offs.

Thanks to Statoil’s contract for ten Johan Castberg subsea templates, Aker Solutions Sandnessjøen will connect a total of 30 wells on the oil field in the Barents Sea; increasing its workforce from 20 to 50 over the next two years.

Six of the subsea templates will be delivered in 2019, and four in 2020. Site manager Annbjørg Skjerve at Aker Solutions in Sandnessjøen said:

“The assignment allows us to develop our own skills and knowledge while boosting the development of the local supply industry. The contract will thus have ripple effects both locally and regionally,” she says.

Two years ago, the yard at Strendene was on the brink of closing down due to low activity, surviving with just six employees. This is a stark contrast to its position now, which is also expected to see a number of apprenticeships begin once the contracts begin.

Kjell Giæver, managing director of the supplier network for petroleum activities in the North, Petro Arctic, describes the contract awarded to Aker Solutions Sandnessjøen as one of the biggest industrial contracts to Northern Norway from the oil industry ever. He thinks it represents a spin-off milestone.

“This will generate employment and add value at Helgeland for many years to come,” Mr Giæver says.

Statoil submitted the plan for the development and operation of the Johan Castberg field on behalf of the partners in December 2017. Located some 100 kilometres north of the Snøhvit field in the Barents Sea, the Johan Castberg field will be a backbone for the further development of the oil and gas industry in Northern Norway.

Capital expenditures estimated at some NOK 1.15 billion per year, the operations will be run from Hammerfest supply and helicopter base and the Harstad operations organisation. Nationally this represents 1,700 man-years, 500 of which will be located in Northern Norway. This includes both direct and indirect effects.

In April the spar platform Aasta Hansteen will start the last leg of the journey towards the Norwegian Sea, where she will be moored on the field - 300 kilometres west of Bodø. Here she opens a new gas province. The gas will be delivered to Nyhamna and from there to Europe through the 480-kilometre Polarled pipeline.

A report issued by Kunnskapsparken Bodø, Nord Universitet and Petro Arctic estimates the total spin-offs of the Aasta Hansteen and Polarled construction in Nordland and Sør-Troms counties at almost NOK 1.3 billion in the period 2013 to 2018.

Almost NOK one billion of these spin-off effects benefit Helgeland.

On 12th March Statoil and the partners also decided to invest some NOK five billion in Askeladd, which is part two of the phased development of the Snøhvit field in the Barents Sea. Askeladd will deliver 21 billion cubic metres of gas and two million cubic metres of condensate to Hammerfest LNG. Three wells are planned to be drilled through two new subsea templates. The templates will have idle well slots for additional wells in the future.

According to Statoil’s senior vice president for project development, Torger Rød, Askeladd will extend the plateau production at the Hammerfest LNG plant until 2023 and is a profitable investment that generates jobs and spin-offs in the region.

In January, on behalf of the Snøhvit partners, Statoil awarded the EPC contract for the delivery of the Askeladd subsea production system to Aker Solutions.

Statoil has also applied for extended technical life for Norne FPSO, and the associated Norne, Urd and Skuld facilities, from 31st December 2021 to 31st December 2036. The field in the Norwegian Sea, which is operated from Harstad, was put on stream in 1997.

Originally scheduled to be shut down in 2014, the new plans for Norne more than double the initially assumed productive life.

“Based on the projects currently being worked on, we have ensured a high activity in the North until 2050, and beyond. In addition, there is a considerable upside potential in the development of more discoveries and any new discoveries,” says Ørjan Birkeland, project manager for the Northern Area project at Statoil.

Last year Statoil drilled five exploration wells in the Barents Sea. This year up to five more wells are planned. Statoil is actively involved in efforts aimed at qualifying Northern Norway industry as suppliers, either directly towards Statoil, or as sub-suppliers of some of the big contractor companies.

Since the start-up in 2008, some 300 companies have completed all or parts of the Supplier Development in Northern Norway programme, organised by Statoil together with Innovasjon Norge.

Statoil has also actively worked to simplify the contract structure, enabling smaller companies to submit bids.

Statoil will also have industrial coordinators as contacts to the local industry. From 1st March 2018, the company had a coordinator in Harstad. Now an industrial coordinator has been appointed in Hammerfest as well.

“Statoil aims to involve good suppliers in the North, thus increasing the local ripple effects,” Ørjan Birkeland, project manager says.