ONS 2016 is in great shape with its best conference line-up ever, claims president & CEO Leif Johan Sevland. He discusses this and the state of the NCS with Jeremy Cresswell.
Two years ago during Offshore Northern Seas, the oil price was falling, having dropped to around $100 compared with just short of $115 on June 20, 2014.
No one thought anything of it at the time. After all, oil prices are volatile and this kind of fluctuation had been commonplace during what had to that point become the longest bull-run in the history of the industry.
ONS 2014 was brimming with confidence and the champagne flowed. Most thought $100 oil was impregnable; six weeks later it was around $85 and the industry still basked. By January 2015, it was sub-$50 and less than $30 a year later. Now it is in the mid $40s.
So, at the end of this month, ONS 2016 gets under way in Stavanger against a very different backdrop to last time. The offshore industry has been to Hell and back . . . and more.
Not a great time to pull a major oil show together, one would have thought. However, Leif Johan Sevland, CEO of the ONS Foundation insists that ONS 2016 is in great shape, has the best conference programme ever AND he expects show attendance to roughly level-peg with 2014.
This is in sharp contrast to the foundation’s local market event ONS Norway which was cancelled last year as too few exhibitors had registered. The foundation of course blamed the collapse in oil prices.
Sevland took over the reins from predecessor Kjell Ursin-Smith in 2012 after 16 years as the mayor of Stavanger, an executive posting that carries great power compared with the titular role of Aberdeen’s Lord Provost.
This means he had a considerable knowledge of ONS prior to taking on the role of CEO . . . one that reaches back 20 years, plus he comes across as being a political animal, which he doubtless uses to his and ONS’s advantage.
Energy’s editor has invariably found Sevland full of Tigger-like bounce. His big frame, powerful handshake and frank face impart a presence too. No doubt he can be a formidable adversary on occasion.
Sevland agrees that the past two years have been particularly horrible for the North West Europe Continental Shelf but that Norway’s industry, though battered, is stronger in spirit and will be around for many more decades yet.
He feels too that, by and large, the succession of governments that have sat in Oslo over the past 50-plus years have mostly both understood the sector’s huge long-term value to Norway and fostered it through good and bad times.
That includes the current administration which, like the industry, apparently also remains strongly supportive of ONS and its value as a forum.
Sevland: “We have a lot of loyal customers; we have new clients, we have an exhibition about the same size as last time, which was the biggest ever for ONS and the conference will be the largest ever with both a strategic issues content and, for the first time, technical sessions.
“In 2010, there were around 80 presentations; now we have around 400 and we have support from all over the world.”
Sevland insists that the traditionally strong international and strategic issues focus of ONS has not been diluted by the addition of the technical programme and dismisses the suggestion that this has made it just another Offshore Europe or OTC where, in both cases, it has been necessary to strengthen the strategic issues element while still running huge technical programmes in order to offer better balance.
He says that ONS is on the right road with both the changes to the formula and its timing, despite commodity prices still at a low ebb.
“Of course this has been a challenging time, we know people have lost their jobs; we know that a lot of companies have lost a lot of money, especially shipowners, who have lost a fortune.
“We’ve been through a crisis; the industry has had a hard time in every way and we feel sad about that.
“Nonetheless, we have managed to keep the level of interest in ONS; indeed it is one of the few events worldwide that people are prioritising.”
Sevland says the Norwegians are squaring up to the need to change and are getting on with reinvigorating their offshore sector.
“I think the industry is now ready for renewed growth and there is growing optimism,” he says.
From the UK perspective Norway is seen by many as better organised than on the Aberdeen side of the North Sea and better able to support its indigenous supply chain.
Sevland agrees, but only to a limited extent. Over the past decade or so especially, many of the big contracts for large new NCS developments have gone to Far East fabrication yards and so forth. This has, over the years, inflicted considerable damage in Norway in his opinion.
But the Norwegian industry is fighting back, determined to be world-class and competitive.
“When we (the supply chain) lost those contracts we realised that we had to be a lot more efficient. So, when the John Sverdrup development came up for bid, the Norwegian industry was ready and as a result won a lot of contracts on that project,” says Sevland.
“There is also optimism about the licence awards made in the 23rd Norwegian Licensing Round in the Barents Sea and the feeling is that this is a long-term industry. We’re going to be here for a while; we have no plans to end it; we’re ready for a new journey.
“Also, a lot of the companies tell me that we’re lucky in Norway because the government has a mature approach to the industry with long-term thinking. That makes a good investment climate.
“There’s a lot of work to do, but if you focus only on the problems then you’re going to lose.”
One of the things that Sevland particular highlights is the calibre of leadership that has emerged on the NCS as a result of the oil price crunch . . . in his view the kind of leadership necessary for hauling an industry through and out of the deepest crisis ever experienced by the global offshore oil & gas industry in its 67 or so years history, not counting the Caspian.
“They work very hard, they work smart, they’re standing up and showing the way. And don’t forget, there’s a long future waiting for us out there.”
Sevland used a quote attributed to UK wartime leader Winston Churchill who supposedly said during World War II: “If you’re going through hell, keep going”.
“Look, we could have said everything has been ruined; but this industry is tough, it’s going to be here for decades and decades. There are a lot of people still working in the industry and there are a lot of opportunities out there.
“We have to build a future for them and I think that’s what that leadership is doing. Not only that, there is a co-operation between the industry and the politicians and I think that is proving to be very fruitful.”
Recommended for you
