Participants in Ekofisk

person by Kristin Øye Gjerde, Norwegian Petroleum Museum
The question of who “owns” Ekofisk is not straightforward. In simple terms, however, the field and the rest of Norway’s continental shelf (NCS) belongs to the Norwegian state. This was determined on 14 June 1963, when the Storting (parliament) passed the Act Relating to Exploration for and Exploitation of Submarine Natural Resources. This permits licences to be awarded on certain terms.

— The Norwegian state "owns" Ekofisk, but many companies have had the rights to explore and exploit the natural resources at Ekofisk.
© Norsk Oljemuseum

So it is more appropriate to ask which companies hold and have held rights from the state to explore for and exploit the natural resources in Ekofisk.

More specifically, that relates to interests in production licence (PL) 018. This was awarded in the first licensing round on the NCS in 1965.

The Phillips name has always been included among the licensees. But that is the only constant presence in the list of participants.

This article addresses how the licence composition has altered and how far these changes have been affected by developments in the oil industry generally and on the NCS in particular.

First licensing round, 1965

A single company, A P Møller, was given a sole concession in 1962 to explore for and produce oil on the Danish continental shelf for 50 years.

It is unlikely that anything similar could have happened in Norway, even though America’s Phillips Petroleum Company applied to the Norwegian government in 1962 for a similar licence.

In exchange, it offered to carry out seismic surveys worth NOK 1 million on the NCS. However, consideration of this request was put on hold.

The experience gained by the Norwegian authorities from giving hydropower concessions to domestic and foreign companies since the early 20th century meant nobody was going to get a sole licence.

Instead, the government announced a first licensing round on the NCS on 9 April 1965. The outcome on 17 August was that nine of 11 applicant groups were awarded a total of 74 blocks.

Norwegian industrial interests were then kept at arm’s length from the expensive and risky business of oil exploration, with two exceptions.

One was Norsk Hydro, which participated in the French-led Petronord group, and the other was the Norwegian Oil Consortium (Noco) in the Amoco-Noco team.

The Phillips group comprised the US company (51.74 per cent) with Fina Production Licenses AS (30 per cent) and Norsk Agip (18.26 per cent). It applied for and secured PLs 016, 017 and 018.

Exploring for oil was initially a very uncertain and expensive business. In addition to seismic surveys, the Phillips group had to charter a drilling rig.

That was required for a certain number of wells which the partners were committed to drill under the licence terms. They also had to pay the government an annual fee of NOK 50 000.

But the group had little idea that it had hit the jackpot. PL 018 covered blocks 1/5, where nothing has admittedly been found, 2/4 containing Ekofisk, 2/7 with Eldfisk, and 7/11 holding Cod.

A production licence on the NCS gives its holders the exclusive right to conduct exploration drilling for and production of petroleum deposits within a specified area. A production licence on the NCS gives its holders the exclusive right to conduct exploration drilling for and production of petroleum deposits within a specified area. Such licences are awarded by the Ministry of Petroleum and Energy to sets of licensees. These are comprise oil companies, with one designated as the operator to conduct operations on behalf of each group. Each licensee owns its proportionate share of the petroleum produced from the licence area. If a commercial discovery is made in the licence area, it can be developed by the licensees. This must be done on the basis of an approved plan for development and operation (PDO), which has been drawn up in accordance with the provisions of Norway’s Petroleum Act. Oil and gas which have not been produced remain the property of the Norwegian state.

Enter Petronord

The Phillips group pursued talks in 1967 with the Petronord group on a closer collaboration aimed at spreading risk more widely on the NCS.

These negotiation were initiated after other companies had drilled dry wells and spent a lot of money without seeming to have anything to show for it.

The outcome in 1968 was a swap of licence interests – a fairly common practice in the international oil industry. Phillips and Agip transferred 20 per cent of their holdings to Petronord in exchange for a similar proportion of the latter’s licences.

At the same time, agreement was reached that the two groups would share the cost of the Ocean Viking drilling rig and use it turn and turn about.

This brought a number of new licensees to PL 018 – Elf Norge AS (7.1 per cent), Total Norge (5.325 per cent), Aquitaine Norge AS (3.55 per cent) and Norsk Hydro Produksjon AS (2.5 per cent).

In addition, the minor French companies Eurafrep Norge AS, Coparex Norge AS and Cofranord AS each held a tiny fraction.

Fina retained 30 per cent, while Phillips reduced its share from 51.74 per cent to 36.96 per cent and Norsk Agip was cut from 18.26 to 13.04 per cent.

Rumours of a big discovery began to circulate in the autumn of 1969, with 25 October taken as the date when the geologists were sure a major find had been made in block 2/4. But Phillips did not officially report it to the government until 23 December.

This success was a good start for everyone who now held a stake in the licence, including Hydro. However, the interests Petronord passed to the Phillips group never yielded anything – which nobody could have predicted when the swap was made.

A press release on the Ekofisk discovery was finally issued on 2 June 1970. Meanwhile, the Norwegian government was seeking to secure a stronger involvement in NCS operations.

In deepest secrecy, the government bought up shares in Hydro on 9-15 December 1970 which ensured a majority state holding in the company.

This acquisition was officially approved by the Council of State on 22 January 1971, and gave the state a small stake in Ekofisk.[REMOVE]Fotnote: Hanisch, Tore Jørgen and Nerheim, Gunnar, Fra vantro til overmot?, Norsk oljehistorie, volume 1, Oslo, 1992: 165-166.

The Petronord deal had given Hydro an option to acquire 12 or 24 per cent of the group’s interest in a discovery.[REMOVE]Fotnote: Ibid. Holdings in PL 018 were therefore redivided again on 1 January 1971.

While the Phillips group retained its previous shares, Norsk Hydro Produksjon AS purchased interests from its Petronord partners which left it with 6.7 per cent of PL 018.[REMOVE]Fotnote: Elf Norge AS went down to 5.396 per cent, Total Norge to 4.047 per cent, Aquitaine Norge AS to 2.698 per cent, Eurafrep Norge AS to 0.456 per cent, Coparex Norge AS to 0.399 per cent and Cofranord AS to 0.304 per cent.

The next change in licensee composition occurred on 1 July 1977, when Elf and Aquitaine merged to form Elf Aquitaine Norge AS and thereby had an 8.094 per cent holding.

Statoil in and out

After the creation of Statoil in 1972, Norway’s state oil company built up a dominant position on the NCS with the right to a 50 per cent interest in new licences.

But many years were to pass before it secured a foothold in PL 018. That did not occur until 1988, when both international politics and major economic interests were involved.

The Troll gas sales agreement with a European consortium was the spark. Swapping licence interests between Statoil and France’s Elf and Total could provide the basis for this deal.

Estimated to contain 60 per cent of Norway’s gas reserves, Troll was proven in 1981 and declared commercial two years later. Nailbiting sales talks with continental gas buyers in 1985 were essential for developing the field.

These negotiations made slow progress, with the French particularly lukewarm. Something had to be done to persuade them to take a more positive view.

Elf and Total wanted licence interests in Troll and the Sleipner gas field. Could that be achieved, it might make the authorities in France more receptive to an agreement.

Statoil was therefore ready to enter into a swap which gave the French companies holdings in the two gas fields in exchange for a one per cent stake in Ekofisk.

Since it was difficult to estimate the value of this exchange, a net profit deal was also agreed – if revenues from one field exceeded a set value, the other party would be compensated.

The NOK 800 billion Troll gas sales agreement was entered into in May 1986, with the swap of licence interests coming into force on 1 April 1988.

This deal was considered important for securing French government approval of the sales agreement with Gaz de France, which was needed for a Troll go-ahead.[REMOVE]Fotnote: Reported by Ole-Johan Lydersen, a participant in negotiating the agreement, on 20 August 2019.

The advantage for Statoil of securing an interest in Ekofisk was the right this conferred to attend management committee meetings, providing it better insight into licence developments.

It gave the company control over the whole transport chain for gas exports, something which had concerned it ever since the Norpipe link from Ekofisk to Emden was installed in the 1970s.

During the 1980s, the Ekofisk Complex represented an important hub for Norwegian gas exports. The Ekofisk 2/4 S riser platform, operational from 1985, tied the Statoil-operated Statpipe transport system into Norpipe.

This installation was owned by Statoil but operated by Phillips. In 1998, the Statpipe-Norpipe line was relaid to bypass the Ekofisk Complex.

Another but less important reason why the state oil company wanted to know what was going on in PL 018 was the relationship between Tommeliten and Edda.

The former was a condensate field operated by Statoil which produced to the Phillips-operated Edda oil and gas field 12 kilometres away.

Following the oil price slump in 1985-86, Phillips – which had a 25 per cent interest in Tommeliten – became sceptical about developing it and withdrew from the project.

Statoil nevertheless secured acceptance in 1986 for a cheaper development solution based on subsea templates – which gave it useful experience with underwater technology.

Although Phillips had pulled out, it still wanted the Tommeliten wellstream to flow to Edda – not least because this field had proved half the size originally estimated.

That provided spare gas processing capacity. Moreover, the Tommeliten gas could be injected into the Edda reservoir to increase oil production.

The tie-in to Edda was implemented. According to Statoil, however, negotiating tariff terms between the Tommeliten and Ekofisk licences proved difficult.[REMOVE]Fotnote: Reported by Håkon Lavik, 15 August 2019.

Statoil’s interest in PL 018 changed again on 1 January 1999, when the government secured a five per cent stake for the state’s direct financial interest (SDFI) on the NCS.

Part of the Ekofisk II agreement with the Phillips group, this gave Statoil 5.95 per cent[REMOVE]Fotnote: Norwegian Petroleum Directorate, Facts, 2000. and resulted in a corresponding reduction in the holdings of the other licensees.

For the first time since 1968, Phillips saw its share of the licence reduced – but only from 36.96 per cent to 35.112 per cent.

Several reforms related to Norwegian state ownership in the petroleum sector were under way at this time. Plans for part-privatising Statoil to achieve greater flexibility internationally were initiated in 1999 and approved in 2001.

Another change was that administration of the SDFI, which had lain with the state company since 1985, was transferred in 2001 to a separate company called Petoro.

The latter took over various Statoil holdings in fields. Where the Greater Ekofisk Area was concerned, it acquired five per cent in PL 018 on 10 May 2001. That left Statoil with 0.95 per cent.

Total becomes biggest licensee

Crude prices slumped to a record low at the end of the 1990s, leaving the oil companies with acute profitability problems. They responded with mass redundancies and restructurings.

Larger entities provided greater strength in the market, improved cost control and better positioning in relation to the competition for reserves.

The turmoil which followed in the wake of these restructurings also affected the purchase and sale of interests in the Ekofisk licence.

Saga Petroleum, which acquired Norminol’s holding on 1 January 1995, disappeared on 11 January 2001. Its stake was taken over by Norsk Hydro Produksjon, which thereby rose to 6.654 per cent.

The French interests were gradually consolidated, with Eurafrep, Coparex and Cofranord being acquired in 1990 by Elf Rep, Elf Rex and Norminol respectively.

Elf Rep and Elf Rex then merged in the summer of 1992, and this company was incorporated in 1997 in Elf Petroleum – which thereby acquired 8.449 per cent of PL 018. Elf was merged into TotalFinaElf in the summer of 2000.

Just before Christmas that year, Total and Fina’s licence interests were merged with Total Norge’s holdings and thereby amounted to 31.87 per cent.

When these shares were then incorporated with TotalFinaElf’s, the result was a combined holding of 39.896 per cent. From 6 May 2003, TotalFinaElf was renamed Total E&P Norge AS.

This company then ranked as the largest licensee in PL 018, with the operator – now ConocoPhillips Skandinavia AS following the 2002 merger – in second place with 35.112 per cent.

Since Conoco had no stake in Ekofisk from before, its union with Phillips Petroleum did not contribute to increasing the company’s combined holding.

In addition, Italy’s Eni Norge AS took over Agip’s interests in the Greater Ekofisk Area on 15 December 2003.

Statoil merges with Hydro

After Petoro had acquired the bulk of Statoil’s interest in PL 018, a new change occurred in 2007 when the state company merged with Hydro’s petroleum and energy division.

From 1 October that year, StatoilHydro ASA held 0.95 per cent of the licence while StatoilHydro Petroleum had a 6.654 per cent interest.

These holdings were combined from 1 January 2009 into a 7.604 per cent stake held by StatoilHydro Petroleum AS. The company was renamed Statoil Petroleum AS on 2 November 2009.

The final change of name for this licensee occurred on 16 May 2018, when Statoil became Equinor. This was intended to signal that it embraced not only fossil fuels but also renewable energy sources such as solar and wind power.

A similar concept underlies the new company formed on 10 December 2018 by Eni Norge and Point Resources under the name Vår Energi AS.

“Vår” has a double meaning in Norwegian, denoting not only “Our Energy” but also springtime as a season of youth, freshness and greening.

Licence interest in 2019

On the 50th anniversary of the Ekofisk discovery in 2019, ConocoPhillips Skandinavia is operator for the field with a 35.11 per cent holding.

The other licensees at this time are Total E&P Norge AS (39.90 per cent), Vår Energi AS (12.39 per cent), Equinor Energy AS (7.60 per cent) and Petoro AS (five per cent).[REMOVE]Fotnote: Norwegian Petroleum Directorate fact pages, 13 August 2019.

 

Production licence 018
Area North Sea
Awarded 1-A
Date of award 1 September 1965
Duration until 31 December 2028
Original area (square kilometres) 1 752.704
Current area (square kilometres) 851.767

 

Published 23. September 2019   •   Updated 7. October 2019
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Getting the timing right

person by Trude Meland, Norwegian Petroleum Museum
The issue of work schedules for offshore personnel has been subject to constant discussion between government, employers and unions – leading to radical changes over 50 years.
— The offshore workers arrive at the platform for a new work period. Photo: Kjetil Alsvik/ConocoPhillips
© Norsk Oljemuseum

Different systems for rotating personnel between work and leisure functioned in parallel on the drilling rigs during the early years of oil exploration in the Norwegian North Sea. The most common practice was nevertheless one week on and one off. To get a holiday, people carried on working offshore until they were entitled to three weeks free in one go.

However, this arrangement proved impractical – particularly for workers who going offshore or returning home on a Saturday or Sunday. They never got a full weekend off. To stagger such change-overs, the schedule was extended to eight days offshore with eight days free. One work period in five was also dropped, so every fifth free spell was 24 days long.[REMOVE]Fotnote: This gave a working time which averaged 38 hours per week and 1 824 hours per year after holidays. That corresponded to shift work on land.

When Norway’s Working Environment Act (WEA) came into force in 1977, the permitted length of a continuous shift on land was cut. But there was no assurance that this would be applied offshore. In its original form, the Act did not permit the 12-hour working day normal on all offshore installations. So amendments were needed to adapt the legal provisions to fixed platforms.[REMOVE]Fotnote: The Act specified that working time was 36 hours over seven days for work carried out around the clock throughout the week. That represented 1 877 hours a year on average. Adjusting this for four weeks of holiday gave a net working time of 1 733 hours.

The Norwegian Petroleum Directorate argued that reducing working time offshore was impractical, with the “special character” of the oil industry requiring exemptions.[REMOVE]Fotnote: Ryggvik, H, 1999, “Fra forbilde til sikkerhetssystem i forvitring: Fremveksten av et norsk sikkerhetsregime i lys av utviklingen på britisk sokkel”, Working Paper, Volume 114, Centre for Technology and Culture, University of Oslo, printed edition. Oslo: Centre for Technology, Innovation and Culture (TIK), University of Oslo: 16. As early as 1975, however, Ekofisk operator Phillips Petroleum had agreed to working hours for its own personnel which accorded with the provisions proposed for the new Act. A royal decree of 9 July 1976 extended the existing Worker Protection Act, with certain exceptions, to the fixed installations offshore on a temporary basis.

The WEA was then applied to these facility in 1977.[REMOVE]Fotnote: Ryggvik, H, 1999, “Fra forbilde til sikkerhetssystem i forvitring: Fremveksten av et norsk sikkerhetsregime i lys av utviklingen på britisk sokkel”, Working Paper, Volume 114, Centre for Technology and Culture, University of Oslo, printed edition. Oslo: Centre for Technology, Innovation and Culture (TIK), University of Oslo: 18. This meant that offshore workers had their working time regulated and acquired legal safeguards against unfair dismissal. After long discussions, the North Sea schedule was by and large established as two weeks working offshore and three weeks free on land.

But the WEA was not applied to floating units such as rigs, and working time in that part of the oil industry continued to be regulated by Norway’s Ship Labour Act.

 An extra day

Norway’s legislation on paid holidays was amended in 1981 to give everyone a legal right to four weeks and one day off. The latter was nicknamed the “Gro Day” after Gro Harlem Brundtland, the Labour premier of the day. This meant the two weeks on/three weeks off schedule now imposed too many working hours. It was decided that the extra would be compensated as 25 hours of overtime per year.[REMOVE]Fotnote: Working time was reduced from 1 752 to 1 727 hours.

Agreement was reached in the 1986 collective pay negotiations on a 7.5-hour normal working day and a 37.5-hour week. Personnel both on land and offshore working a continuous shift also had their weekly hours cut 33.6.[REMOVE]Fotnote: Net working hours after deducting holidays were reduced from 1 752 to 1 727. To comply with these new terms, the offshore schedule was altered to two weeks at work, three weeks ashore, two weeks at work and four weeks on land.

When the Gro Day was introduced in 1981, the Labour government originally proposed introducing a full week’s extra holiday in stages over three years. But that failed to materialise. In 2000, the Norwegian Confederation of Trade Unions (LO) proposed a fifth holiday week for all employees, which would thereby reduce the number of hours in a work-year.[REMOVE]Fotnote: That involved an additional four free days of 7.5 hours offshore (32 hours). The hours to be worked were then reduced from 1 612 to 1 580. That demand was accepted, and most workers could thereby enjoy five weeks off. This naturally had consequences offshore, but implementing it there was not a straightforward matter.

A schedule of two weeks at work and three/four weeks at home had been 19 hours short of a normal work-year. That was overcome by deducting this time from pay or leaving the first 11 hours of overtime unpaid.[REMOVE]Fotnote: Sande, Leif, “Arbeidstiden på sokkelen”, Sysla – meninger, 11 March 2015.

The new holiday deal meant that an offshore worker would be doing 12 extra hours per year. This was initially paid as overtime, which the unions found unsatisfactory. They demanded the full holiday entitlement awarded to everyone else through the introduction of a schedule of two weeks on and four off. In 2002, the Norwegian Oil Industry Association (OLF – today the Norwegian Oil and Gas Association) allowed local deals under the offshore agreements to adopt this two-four scheme. All the companies subject to these agreements introduced the new schedule. ConocoPhillips was among the operators to do this, in its case covering the Greater Ekofisk Area.

However, the two-four system meant workers were falling short of a work-year by 122 hours.[REMOVE]Fotnote: Working 12 hours a day for 14 days, followed by four weeks off, means that an employee works 168 hours every six-week period. That adds up to 1 460 hours per year. Annual pay was thereby cut by 7.71 per cent to take account of the reduced time worked.[REMOVE]Fotnote: Norwegian Official Reports (NOU) 2016:1, Arbeidstidsutvalget — Regulering av arbeidstid – vern og fleksibilitet. https://www.regjeringen.no/no/dokumenter/nou-2016-1/id2467468/sec16. Other conditions were also set on Ekofisk. The whole offshore organisation was to be reviewed to find efficiency gains, and the agreement specified that the change would not lead to an increase in the workforce.[REMOVE]Fotnote: Pioner, “2-4-ordningen innføres”, March 2003.

Published 21. October 2019   •   Updated 21. October 2019
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Knut Åm – oil and gas veteran

person by Kristin Øye Gjerde, Norwegian Petroleum Museum
The special contribution made by Knut Åm to Phillips Petroleum Company was one reason for his appointment in 2014 as a Knight First Class of the Royal Norwegian Order of St Olav.
— Knut Åm in his office in 1993. Photo: Dag Myrestrand/ConocoPhillips
© Norsk Oljemuseum

Åm was born at Årdal in the Sogn district of western Norway in 1944, and grew up in Oppdal and Volda/Ørsta where he proved an able pupil at school. 

He opted to study mining engineering at the Norwegian Institute of Technology (NTH) in Trondheim, graduating with honours in 1967. 

Åm’s first job was with the Norwegian Geological Survey (NGU), again in Trondheim, where he worked and conducted research for six years. One of his jobs was to interpret aeromagnetic measurements of sub-surface rocks made from the air, which provide valuable information on geology and prospects for finding petroleum. In a series of publications, he described the big sedimentary basins identified in the Skagerrak between Norway and Denmark and in the Norwegian and Barents Seas. 

He joined the Norwegian Petroleum Directorate (NPD) in 1974, serving as a section head in the resource department and a principal engineer in the safety department. 

That was followed by three years with Statoil, where he became the state oil company’s first vice president for research and development. His appointments at the time included chairing a research programme on offshore safety, which led to legislation enacted by the Storting (parliament) and a bigger research effort. 

Joining Phillips

olje og gassveteran knut åm,
Hovedkontoret til ConocoPhillips i Bartlesville, Oklahoma. Foto: ConocoPhillips

Åm secured a job with Phillips in 1982 and was soon sent to the head office at Bartlesville in Oklahoma to get better acquainted with the company and its corporate culture. 

After a year in the USA, he returned to the company’s Tananger office outside Stavanger and became the first Norwegian to serve as offshore manager for the Greater Ekofisk Area (GEA). 

That put him in charge of 23 platforms, with responsibility for the waterflooding programme as well as the project to jack up a number of the installations. These major developments extended the producing life of the GEA and sharply increased estimates for recoverable reserves from its fields. 

Åm led this work during difficult times, with low oil prices and the need to implement cost savings and overcome substantial financial challenges. As if that were not enough, he also taught at the University of Bergen from 1985 to 1990 as an adjunct (part-time) professor of applied geophysics. 

First Norwegian chief executive

Knut åm,
Knut Åm ved kontorpulten i 1993. Foto: Dag Myrestrand/ConocoPhillips

After heading operations in the Permian and San Juan Basins at Odessa, Texas, from 1988-91, Åm became the first Norwegian president and managing director for Phillips Petroleum Norway. 

That put him in charge of 3 000 employees in the GEA as well as in Tananger, Oslo, Teesside and Emden. This was when a redevelopment of Ekofisk was planned, along with the future cessation and removal of old platforms.[REMOVE]Fotnote: https://www.fylkesmannen.no/globalassets/fm-rogaland/dokument-fmro/felles-og-leiing/brev-og-artiklar/fm-tale-til-knut-am.pdf 

By 1996, Åm was back in Bartlesville – now as vice president and head of all exploration and production in Phillips. He stayed in that job until retiring in the USA during 1999.

Offices and committees

But his working life did not end there. Appointments from 1999 to 2007 include membership of the Statoil board – and many similar posts can be mentioned. 

Åm has been president of the Norwegian Geological Council and the Norwegian Petroleum Society, and chair of the Norwegian Oil Industry Association (now the Norwegian Oil and Gas Association). 

He led the exhibition committee of the 1996 ONS oil show in Stavanger, and has chaired Bergen’s Christian Michelsen Research institute as well as the industrial council of the Norwegian Academy of Science and Letters.  

In addition to chairing Hitec ASA, he has been a director of several technology companies. 

Mention must also be made of the improved recovery committee appointed by the Ministry of Petroleum and Energy with Åm as chair. This produced a report in September 2010 which presented 44 specific measures for improving the recovery factor on the Norwegian continental shelf (NCS). 

Through his work and many appointments, Åm has been acclaimed for a combination of expertise, creativity and determination.  He also demonstrated the ability to tackle the requirements of Norway as a nation as well as the industry and its employees – not least with regard to the working environment and safety in a demanding and risky offshore industry. 

Optimist

In retirement, Åm is an optimist – with regard to the climate as well. “I’m very concerned with nature, but believe we should extract the resources its given us,” he told Otium in 2016. 

“Norway could have a long and good future in the oil and gas industry if people give it more support. Exploring for new deposits is important, but we should also seek to achieve a far better recovery factor from both new and existing fields.” 

“You can naturally concentrate on life’s negative aspects. Then everything’s simply awful. I think you’ll be a far happier person if you prefer to see the positive side of life. I call that self-motivation. We need more of that in the energy sector.”[REMOVE]Fotnote: https://api.optimum.no/sites/default/files/PDF/optimum-magasinet-2016.pdf 

Published 21. October 2019   •   Updated 21. October 2019
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Knut Ove Kristensen – veteran manager with his heart in HSE

person Kjersti Melberg, Norwegian Petroleum Museum. Based on an interview with Kristensen on 12 September 2019.
More than forty-five years of service on Ekofisk underpin Knut Ove Kristensen’s status as a pioneering leader on the Norwegian continental shelf (NCS). His involvement began in 1974 when he switched from a career at sea to become a process technician for Phillips Petroleum.
— Knut Ove Kristensen in conversation with process apprentice Fredrik Svindland Theissen (left) and operations manager Siri Friestad. Photo: ConocoPhillips
© Norsk Oljemuseum

Early promotion and trust followed, and he served as an offshore installation manager (OIM) for more than 33 years in the Greater Ekofisk Area. 

Plain-speaking

Kristensen recalls that he was a committed young man in the early 1970s – an open, curious and plain-speaking person who was not afraid to criticise health, safety and environmental (HSE) conditions. 

The working style he encountered offshore suited him well, ready as he was to speak his mind. “I’ve undoubtedly been a loud-mouth. I’m used to having zealous people in the Family With grand-parents and a father who served as mayors, which is perhaps why I don’t quite know when to keep quiet.” 

Thinking back to working conditions when he started in petroleum industry, he recalls living on Gulftide, Norway’s first production facility, and says it was fascinating. 

“This was an old jack-up rig, with the helideck installed on planks. We were four to a cabin, and things were pretty shabby. Primitive conditions prevailed, to put it mildly.” 

The workplace at the time was characterised by the presence of the Americans, and confusions frequently arose between them and those who were not particularly good at English. 

“It was very unusual,” reflects Kristensen. “We were trained up by the Americans, of course – they were the ones who knew about this business. There were a lot of misunderstandings among the Norwegians, people who pretended to understand the messages they were given about what jobs to do. Both serious and funny situations occured. Those of us who’d been to sea undoubtedly had an advantage in that we knew the language a bit better. The rest were fishermen and smallholders and ordinary people from the Districts in Western Norway who didn’t speak much English. Offshore terminology wasn’t easy for people who didn’t have the language.” 

He quickly grasped the ethos in this working environment. “The Americans often only gave you one chance. If you showed that you could cope with your job, you won trust, new opportunities and more responsibility.” 

Given his background in the Norwegian merchant marine, however, Kristensen reacted negatively to a number of the conditions which prevailed at the time. “I was one of the youngest then, and that wasn’t always easy because there were a number of older and more experienced people who felt they had a ‘monopoly of brains’,” he comments. “And quite a lot were pushy. “Working conditions weren’t orderly, with proper employment contracts like I was used to from my time at sea thanks to the Norwegian Seamen’s Union – unionisation and the like.” 

He adds that he is grateful for everything he learned from the Americans, but that they at the time were not particularly keen on unions and the Norwegian concept of collaboration between employers and employees. “They thought it was enough to enter into agreements on a mantoman basis or with the company, and saw no need to organise this via trade unions.” 

Involved

Given his views, it is not surprising that he became involved at an early stage with the Ekofisk Committee by serving as secretary to Øyvind Krokvik, who was first head of this union. 

Kristensen explains that he has been committed throughout his career to involvement and worker participation and to good collaboration between unions, the safety service and management. That was particularly important during the early years of the petroleum industry on the NCS, he emphasises. His experience of union work accompanied him into various senior posts on Ekofisk. 

With a gleam in his eye, he says the following about his promotion: “Acquiring managerial responsibility early on may have had something to do with my involvement with the union. Putting in place systems for worker participation and collaboration was particularly important in the early years of Norway’s offshore industry. 

“I played a part in establishing the parameters which govern industrial relations out on the field today, with unions and the safety delegate service.

I became the country’s youngest OIM at the age of 24, and served as a manager out there for 41 years.

They may have thought ‘he’s more trouble than we need, so we’ll just promote him up and then be quit him.” 

Kristensen reports that he has been preoccupied throughout his managerial career with ensuring that “things are genuine” – that a manager must understand and personally be part of “the home team”. He explains that as the ability to understand a position from the standpoint of the various parties involved, and adds that he has thrived offshore with a living and working community. This he defines as one “where you get close to people, where everyone is seen and heard, and where they understand that they play an important role in reaching a common goal”.[REMOVE]Fotnote: Pionèr, ONS 2018: 8. 

It did not take him long to learn how to adjust his management style to the offshore environment, but admits that this approach has developed over the years. The leadership culture which dominated on the platforms during the early years undoubtedly influenced me a bit. I was probably very inflexible and saw things in black-and-white, but have become more judicious and considered over time. 

“Nobody left my office earlier in any doubt about what I meant. I thought that saved a lot of time. But I can’t have been too bad, or I wouldn’t have held down the job for so long.” 

Strategy

Kristensen’s long service makes him unique on Ekofisk, and he has thought a lot about management. His expressed strategy has been to get people on side over HSE through commitment and integrity – and without any “second agenda”. 

“Working in the Ekofisk Complex with 600-700 people is an unusual experience,” he observes. “I held the same job as the man in charge for 20 years. “That means you’re ‘on stage’ the whole time, and attend 10-12 HSE meetings every week. You’ve got to get people committed, drive a doctrine and sell a message. This involves getting what people have to concentrate on implanted in their hearts and minds so they can contribute to their own safety and that of others, he explains. 

“You must be genuine, and your own integrity must be order. You have to build trust, and not least display respect for your audience.” 

“What’s been a powerful help for me is that I’m on the home team. I’ve been a skilled worker myself and have been through most things.” 

Kristensen emphasises several times that he regarded the unions, their elected officers and the safety delegates as a resource in this work. 

“The tripartite collaboration pursued in the petroleum industry between government, companies and unions functions very well,” he concludes.  “This is about informing and involving people, and ensuring that decisions aren’t taken over their heads. Our company has achieved that in a positive way.” 

“The fact that Ekofisk is a mature field and ConocoPhillips is a mature company also has something to do with it. Cooperation with the Petroleum Safety Authority Norway and other authorities is also very good.” 

Kristensen denies that union-management collaboration has become more strained during the downturns experienced by the petroleum industry. “Strained and strained – we must adjust to external conditions and try to protect the jobs needed to safeguard the industry. But nobody’s ever been made redundant by this company. That’s worthy of respect.

Downsizing has been solved with severance packages. People have often been given early retirement. From that perspective, it’s been a privilege to work for an operator company.” 

Commitment

After almost 46 years with the company, Kristensen’s commitment to continuous improvement, good safety and high production regularity is as strong as ever. Recognising that substantial progress has been made in the HSE area over the years he has worked in the industry, he affirms that this issue is closest to his heart. 

“We’ve staked out the path as we’ve advanced. We don’t accept incidents and accidents. We take a completely different approach to risk today. Accidents which do occur are used for all they’re worth in an effort to say to ourselves: ‘this has actually happened, but it’s our duty to learn from it’.” 

Kristensen has personally experienced accidents and injuries at close hand, and thereby knows the importance of preventive safety work to protect people, the environment and equipment. 

He will never forget some incidents – and immediately mentions the Alexander L Kielland disaster in 1980 With 123 casualties. An article in local daily Stavanger Aftenblad as recently as 2012, with photos of all those who have died on duty on the NCS since 1966, made a big impression on him. 

Britain’s Piper Alpha explosion in 1988, when 169 people were killed, is another major incident he recalls. His conclusion is that the petroleum sector has not been a Promised Land for all. 

The former OIM proudly mentions a number of HSE improvements which have partly been the result of technological advances in the industry during his time. But he warns about hazards which still exist, such as vessels drifting out of control. A well-known incident on New Year’s Eve in 2015 made a particularly strong impression on him. 

A 150000 tons, unmanned barge had come loose and was threatening to collide with installations on Ekofisk. Several hundred workers from this field and neighbouring Valhall were flown to safety and production was shut down. The barge passed the platforms at a distance of about one nautical mile, but Kristensen found the actual incident and the threat it posed frightening. 

“Drifting vessels which come loose in rough weather, which can get pretty challenging out there, are perhaps the biggest hazard we now face. Luckily we have good procedures to handle such challenges.” 

Reminder

Such incidents and near-misses are regarded by Kristensen as a reminder that the petroleum industry is under an obligation to learn the necessary lessons. He points to the potential for learning from other industries, and emphasises the good collaboration which prevails across the company. Mechanical handling provides a good example, he says. 

“Things can go terribly wrong. After fatal accidents in the 2000s, we established a work group which held monthly meetings. I took part as technical manager for these facilities. We involved everyone in the logistics chain on land, at the base and on the platforms. That attracted so much attention and such great improvements that we’ve now managed to prevent virtually all undesirable conditions in this area.” 

Despite good systems and routines, colleagues on the installations are Kristensen’s most important reminder of the responsibility he has had as an OIM on Ekofisk. 

“Experiences from my early years meant that I have become particularly attentive to HSE – and I was involved in quite a lot, of course. But this mostly relates to the individual who gets injured on your watch and on your shift – in other words, the people you work with. They stood on the drill floor and worked so that the sparks flew around their ears. Having only two-three fingers used to confer ‘status’. 

He notes that improvements have a lot to do with technological progress. Much risk has been eliminated by automating a great deal of the work which used to be done manually. 

“But we still have more than enough opportunities to injure ourselves. This has a lot to do with awareness – being present in the real world, making sure you’re focused. That’s actually expected for 12 hours at a time.” 

A respectful attitude to his big responsibilities and duties was maintained by Kristensen to his last working day. “Emergency preparedness is like being at war – you do what you’re told. But you feel it. Although we’ve trained so long at this, you’re still conscious of being responsible for several hundred lives. Taking a wrong decision could … You must act on the basis of the information you’ve got, not what you know many months later. When you tackle it, however, you get a sense of mastery at solving the problem together with an outstanding emergency response organisation on land. Ultimately, though, you’re the skipper on your own ship.” 

Time to reflect

Kristensen has finally retired from ConocoPhillips, giving him time to reflect over his own commitment and lifestyle offshore as it affected him and his family. 

“For my own part, I must say that it’s had a price,” he admits. “I couldn’t get involved in politics or organisations, for example. I was only at home half of the time. I followed up the kids when I was at home, of course, but never felt I could be active in associations and so on, contribute the way I’d have liked. 

He has found the transition to retirement unaccustomed in many ways. “Simply remembering that I’m not going offshore is a big change, for example. I had to deal with so many challenges right up to my last day at work that it’s been impossible to prepare anything. I ought to have thought about and planned retirement a bit better, of course, but I’ll undoubtedly find something to do when I want to.” 

Published 21. October 2019   •   Updated 25. October 2019
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Ekofisk 2/4 VC

person Norwegian Petroleum Museum
Injection water from subsea installation Ekofisk VC (Victor Charlie) began to be pumped down well VC-03 on 28 September 2018. Well number two came on line just under a week later. 
Kjappe fakta:
  • Plan for development and operation (PDO) was approved by the Ministry of Petroleum and Energy on 7 September 2017.
  • Part of Ekofisk South
  • Installed September 2017
  • On stream September 2018
  • Gets electric power and signals from Ekofisk 2/4 M
  • Also called "Victor Charlie"
— Illustration of Ekofisk 2/4 VC (Victor Charlie). Illustration: ConocoPhillips
© Norsk Oljemuseum

The aim of this facility – an extension to the Ekofisk South project – was to increase waterflooding on the southern flank of the Ekofisk reservoir in order to maintain oil and gas production. 

An amended plan for development and operation (PDO) of Ekofisk South was approved by the Ministry of Petroleum and Energy on 7 September 2017. 

This involved installing a new seabed template with four water injection wells, and represented a continuation of the well-established Ekofisk production strategy based on waterflooding.[REMOVE]Fotnote: https://www.regjeringen.no/no/aktuelt/okt-utvinning-pa-ekofiskfeltet/id2570011/. 

The template was installed in September 2017, with a technical solution similar to that used on the seabed facilities already installed – Ekofisk 2/4 VA and 2/4 VB.[REMOVE]Fotnote: Pionér, no 2, ConocoPhillips, 2018.

In addition to the structure itself, including wellheads and Xmas trees, the installation comprised control modules with umbilicals connected to the existing waterflooding system. 

The 2/4 VC facility receives injection water from Eldfisk 2/7 E, while power and control signals come from Ekofisk 2/4 M. It is run from the Ekofisk 2/4 K control room. 

When fully developed, overall injection capacity for this subsea installation will be 80 000 barrels per day through the four wells. 

The water pipeline and umbilical to 2/4 VB were extended to 2/4 VC. Well operations on the latter began on 24 May 2018 with a view to starting injection before the end of the year. 

Published 15. October 2019   •   Updated 15. October 2019
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