Foreword by Gulbrand Wangen, Managing Direktor INTSOK (Norwegian Oil and Gas Partners)

The Norwegian petroleum cluster – an international success story

The succesful development of the hydrocarbons on the Norwegian Continental Shelf has resulted in strong economic growth and welfare improvements. We have also been able to create an internationally competitive technology driven petroleum industry; delivering advanced products and systems. The industry’s international turnover has almost doubled in the last two years, reaching 95 billion NOK annually. Norwegian companies are now global market leaders in underwater and drilling equipment, floating production and supply services. The Norwegian Continental Shelf has been a breeding ground for innovation and technological development.

Internationalisation of Norway’s petroleum industry has been a high priority for a decade. The aim has been to use the technology and expertise developed on the Norwegian continental shelf beyond the domestic market and thus strengthening the long term basis for growth and development of the petroleum cluster.

A recent study of eight regional clusters in the Norwegian petroleum sector has documented that we are on the way to meet our ambitions. Internationalisation is creating more jobs and adding more value to society.

The drilling cluster in the southern part of Norway is one of the major success stories. The number of employees in the cluster have more than trippled since 2001 to some 5000 people now directly employed in the cluster. The indirect impact on the region’s economy is substantial. The same pattern can be seen on the north-west coast where the industry leads the world in advanced supply vessels for use in the oil and gas industry. The companies have more than doubled their turnover and increased their number of employees with almost 70 percent since 2002.

The high international growth has not been at the expense of the activity on the Norwegian shelf: simultaneously with an increase in overseas turnover the activity level in the domestic market is record high with an annual capital expenture above 130 billion NOK.

Norway has succeeded in establishing a culture where oil companies, suppliers and research environments interact. Many of the regional petroleum clusters have been able to build on the same formula for success; collaboration, sharing years of experience and developing new products and systems that meet the needs of the clients.

INTSOK was formed as a joint undertaking between industry and national authorities and has become a good tool for the petroleum industry. Having a Norwegian presence in countries with significant petroleum resources has proved to be an important factor in the internationalisation of the Norwegian petroleum cluster.

The opportunities internationally are large. The world will need to produce more energy to meet the continued growing demand from countries like China and India. The world will also have to manage the climate change challenge better, developing new technologies that can be part of the future.

Capital expenditures in the oil and gas sector will remain high, even in a global economic crisis. Some projects will however be put on ice as a result of economic uncertainty and lower oil prices. New technological solutions may be more difficult to finance for a while, but the hydrocarbon industry is a long term industry and will emerge more competitive and efficient after past crisis.

The Norwegian oil and gas industry is well positioned for the future challenges, including carbon management. The technological expertise is already working at full speed to expand into renewables and developing viable environmental solutions, not at least in carbon capture, transportation and storage.

The Norwegian continental shelf will continue to be a technological laboratory, but international challenges will have to be incorporated into the laboratory to ensure that Norway will maintain its leading international position.