I’VE just been in Norway; Bergen to be precise. The objective was to visit a number of key companies with a heavy commitment to subsea, including the biggest purchaser of technologies and services on the Norwegian Continental Shelf . . . Statoil itself.
It was a long overdue trip, given that I was last there about five years ago and at least eight since the previous visit, and so forth. But it is only this time that I finally clocked the massive importance of this beautiful but purposeful place to north-west Europe’s offshore industry; indeed far wider than that.
I guess that like many folk in Aberdeen, I have tended to regard Stavanger as the Granite City’s Norwegian alter-ego. But I have come to the conclusion that Bergen is more comparable.
For sure, in population terms, the two are broadly of the same class, though Bergen city is somewhat bigger (Stavanger is much smaller) whilst, in city-region terms, Aberdeen has the edge with around 400,000 versus 380-390,000. Both have tens of thousands of residents who work for the oil and gas industry.
Bergen describes itself as the MMO capital of Norway . . . the place from which most of the Norwegian Continental Shelf is run. For MMO read maintenance, modifications and operations. That is basically what Aberdeen is about too.
Not only that, Bergen is Norway’s main subsea centre and Aberdeen fulfils that role in the UK. Together they absolutely dominate global subsea in the oil and gas context.
While Aberdeen claims to be and is generally regarded as the subsea capital of the world, it is necessary to qualify that, as Bergen has the lead when it comes to developing the technologies that get carted around the world by ships that are never built in Britain.
Indeed most of the vessels are Norwegian-built, albeit hulls are increasingly contracted out to lower-cost locations like Poland and Romania. Having said this, quintessentially British Rolls- Royce just happens to own a big slice of the Norwegian specialist vessel design and marine systems manufacturing capability.
But then we should not forget that Norway rules the waves when it comes to vessel ownership, with at least one shipowner, DOF, headquartered in Bergen. Of course, operationally, Aberdeen is out in front in terms of global fleet operations management; three good examples being Subsea 7 (Norway), Technip (France) and Fugro (Netherlands).
One can argue that both are credible manufacturing centres, at least in the subsea context, with the emphasis on high-end technologies for obvious reasons. Are they equals in that regard? Not sure.
It’s a bit like comparing apples and pears but I came away from Bergen with the impression that more of its subsea capability, including manufacturing, is in Norwegian ownership than is the case in Aberdeen where foreign brands appear to rule the roost.
For heaven’s sake, even our most successful well services company, Expro, is currently owned by outsiders, though one supposes that could change with time. That said, Norway’s Framo recently came under full ownership by Schlumberger; a situation that is highly unlikely to alter; oh, and Roxar is now owned by Emerson of the US.
Both Aberdeen and Bergen are high-cost locations for any company to attempt manufacturing. However, while companies in Aberdeen tend to whine about it and outsource as much as they can to centres with lower labour costs, I was told squarely by at least three of the companies that I visited in the Bergen area that they prefer local manufacturing, Framo being one.
Indeed Framo has invested massively in a bespoke manufacturing and test complex for its pump-based technologies. This is located just outside Bergen at Horsoy and is absolutely world-class. The company is confident that it can attract sufficient additional skilled personnel, both locals and from other parts of Norway or indeed Europe.
Of course, it is well enough known that Norway tends to be the place where significant new subsea technologies are broken in.
This is hardly surprising given the premium that the Norwegians place on technology research and development. Moreover, it is reflective of the long-term view that Oslo takes with regard to offshore oil and gas exploitation.
There is the further point that Statoil leads the pack when it comes to petroleum company R&D, though, to be fair, my hosts were also complementary of BP . . . so a brownie point for Britain. Total received an honourable mention too.
But the bottom line is that, of all of northwest Europe’s operators, it is Statoil that is likely to be the first to try something new, rather than any of its peers. It’s a well known fact that everyone else vies to be second sheep through the fence rather than the first.
The upshot of my latest foray across the pond is that I have come to the conclusion that Aberdeen and Bergen are a lot more alike than I had previously considered, though absolutely not in terms of geographic setting.
I wonder, therefore, if there is a case for strengthening ties between the two cities, not least at civic and chamber of commerce levels (notwithstanding the British Norwegian Chamber of Commerce).
Even though there are many clearly very strong business relationships in place, I can’t help but think a concerted effort at civic and chamber level might help forge new ones . . . and the more strategic the better.
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