Annual Report 2002 Report from the Intsok Board of Directors the Challenge for the Norwegian Supply and Service Industry

Annual Report 2002 Report from the Intsok Board of Directors The challenge for the Norwegian supply and service industry

In 2002 the petroleum industry represented 19.2 percent of the Norwegian The Angolan market GDP.The average daily oil production was 3,0 million barrels. A recent study emerges, and the Norwegian cluster is present. on the employment in the petroleum industry shows that 54,000 people (Picture Girassol: were directly engaged in the industry while some 150,000 were indirectly Ø. Hagen, Statoil) employed in the sector. Contents These achievements are the results of former policy decisions where the 04 Market outlook overall objectives were to establish domestic oil companies and develop a robust supply and service industry.Though a major transformation of the 06 Achievements in the international markeds private sector the capability of the offshore supply and service industry has developed in to a world class oil and gas cluster. With the support of 10 Socio-cultural understanding and business practices international oil companies major investments were made into technology 12 Major events transfer, research & development, education and training.

16 Key clients The globalisation of the industry continues, resulting in mergers and development of large corporate bodies with world-wide presence. During the last 17 Financial result year Norway experienced that major companies within the supply chains of 17 Appointment of board members transportation and drilling equipment were acquired by foreign companies.

17 Organisation The global offshore market, including investments and recurrent costs was estimated at 100 billion USD in 2001. Including the market share on the Outlook 18 Norwegian Continental Shelf (NCS) the Norwegian supply and service 19 Intsok secretariat industry has approximately 10 percent of world offshore market.

20 Intsok partners The challenge for the Norwegian supply and service industry in the next few years is to maintain a strong position in the maturing North Sea and at the same time capture significant market share overseas. Inovation of new cost effective technologies and commercialisation of products and services will have to be given highest attention.

Gulbrand Wangen Managing Director Dr. Ing Intsok

2 3 Market outlook

The best way of describing the market outlook percent to 34 percent by 2030. The dependence in the short term is uncertainty.The war in Iraq on gas imports will increase in the EU, US, China will have short term impacts on the oil price. and India. LNG-trade will grow significantly. The recent problems in Nigeria and Venezuela One notable trend is that there will be a significant have added to the uncertainty.The world economy shift in the geographical source of energy supplies is still weak, also adding to the uncertainty. over the next three decades. Almost all of this Russian production, on the other hand, continues increase will come from non-OECD countries. to grow. A very high level of investment will be required While uncertainty characterises the short term, to expand the infrastructure for energy production, longer-term trends indicate continued growth in conversion and delivery, especially in developing energy demands.The latest assessment from the countries. For example, the capital investments International Energy Agency, IEA, in Paris shows an required to meet the requirements for power annual average growth in the global demand for generation alone will be some 4200 billion USD energy of 1.7 percent through 2030. Fossil fuels will over the next 30 years, according to IEA. remain dominant, accounting for more than 90 percent of the increase in energy use to 2030. Global oil demand will rise from 75 million barrels Natural gas demand will grow fastest, but even in per day in 2000 to 120 million barrels per day in 2030 oil will be the largest individual fuel source. 2030.The transport sector will account for nearly three quarters of this increase in demand. More oil Energy demand will reserves must be identified to keep pace with rising increase, particularly in oil demand. Most of the growth in demand will still The exploration and production developing countries. be met by Opec producers, particularly those in industry faces a dramatic growth Their share of world the Middle East. Iraq, when opened, will attract challenge demand will increase significant international capital. More oil will become from 30 percent today available from Russia and the Caspian. Deep-water Global oil* production medium scenario, Million b/day 150 to over 40 percent in offshore discoveries will be important, but the 2030. China is leading companies will also need technology to keep 120 Technology challenge the growth in demand. increasing oil recoveries from old fields through +80 mmb/d efficient use of seismic and smart wells. 90 New fields There are sufficient The oil from the Caspian is technologies will play a critical role in ensuring to the previous 5-year period. needed.This requires high invest- 60 Increased energy resources to In mature provinces the role of smaller niche recovery - IRR access to affordable and abundant energy. ments in the infrastructure. meet the world's players will grow in importance to handle tail-end Key regions in the subsea area over the next (Picture: Statoil) 30 Existing fields and Middel East demand beyond 2030, production and smaller field developments. fields - depletion The world’s total expenditures on offshore oil 5 years are Western Europe (including Norway) provided that technology UK continental shelf is already seeing the first and gas projects in the period 2003–2007 are with 27 percent,West Africa (25 percent) and 1900 1900 1940 1960 1980 2000 2020 is available to develop indications of the new trend. estimated at 100–110 billion USD per year. the US Gulf of Mexico (20 percent). Expenditure * Petroleum Assessment 2000 (Reston,VA, July 2000). these resources. Global in the floating production sector is again oil reserves are Technological advancements will bring more According to analyst Douglas-Westwood, subsea dominated by West Africa (35 percent), the US adequate, though efficient production from non-conventional sources developments and floating production systems are Gulf of Mexico (19 percent) and Latin America non-conventional oil will of oil, and converting gas to liquids will become among the fastest growing areas in offshore oil (19 percent). probably account for a growing portion of supply. more and more relevant. and gas. Levels of expenditure in these areas Natural gas and coal reserves are abundant. Natural over the next 5 years are expected to increase 4 gas will have a growing market share, from 23 The development and deployment of new by 40 percent and 390 percent respectively, relative 5 Achievements in the international markets

International sales by Norwegian oil and gas Australia a 5-year framework agreement was signed MAINTENANCE, MODIFICATIONS AND suppliers and service companies have with Woodside for the delivery of engineering OPERATIONS (MMO) The contracts in the demonstrated a positive trend in recent years. services, subsea facilities and services.The contract ”The secret of success is MMO area tend to be awarded either to large Sales in 2001 were estimated at USD 4.5 billion, primarily covers Australia, but Woodside may also companies with an international network of offices an 18 percent increase on the 1999 figure. use the services in other regions. to focus on elements that or to local companies that maintain confidence and The Norwegian oil and gas cluster consists of you are good at.” trust with the clients. competitive international supply chains within 13 The Norwegian subsea industry has a leading areas. Achievements within selected areas: position internationally with a 70-80 percent Kjell Eggen, Aker Verdal ABB’s acquisition of Umoe Haugesund is an market share.The skills, experience and technology example of an international company bringing the SUBSEA In 2002 the Norwegian subsea cluster which have been developed on the Norwegian MMO capability of a local company abroad. Over The oil and gas processing won major contracts in Angola, Nigeria and continental shelf over many years are now being the two-three past years the company has The subsea cluster won Sendje Ceiba facilities of was Australia, including Shell’s development of the deployed abroad. PLATFORMS Maintaining a strong position in positioned itself in most regions of the world major contracts in Angola. fabricated by ABB Offshore (Picture above: ABB) Systems. (Picture: ABB) Bonga field, southwest of the Niger delta. Located the North Sea is still important for through the ABB network. 2002 marked a break- in more than 1000 m of water Bonga is Nigeria’s FMC Kongsberg Subsea, ABB Offshore Systems and companies in this area. Last year, however, through, with maintenance contracts in Brazil, and Brazilian drillfloor. first deepwater development. Aker Kvaerner are all competitors in the subsea Norwegian based companies won contracts in good positioning by the company in Egypt, (Picture under: Odfjell Drilling) area while Stolt Offshore and Prosafe in coopera- Canada, Brazil and the Middle East. Kazakhstan, Iran and several countries in West Fifth generation rig In Angola the companies won contracts at Dalia tion with selected partners are positioning Africa. Eirik Raude was chartered for and Girassol for TotalFinaElf. Both projects are themselves for subsea installation and intervention. In Brazil, a joint venture between Aker Kvaerner, assignment in Canada. located in Block 17 in 700-1400 m of water. In Siemens Oil and Gas and the Mauá-Jurong These achievements are the result of a firm (Picture bottom: Ocean Rig) fabrication yard won a contract on 2 utility modules business strategy with focus on regions with VALUE CHAIN for Albacora (Petrobras).This contract is an growing prospects in MMO. example on package suppliers teaming up in order TYPE OF to be competitive in international markets. The North Sea MMO market is increasing and COMPANY ”The local several companies are well prepared to compete Reservoir/ Offshore Drilling Down-hole Subsea Platform/fixed/floaters Field operati- Decom- seismic Drilling equipment and Well ons and trans- isioning Last year Aker Kvaerner won a topside contract in this market. Last year Aker Kværner was awarded Services portation content of for the FPSO for the White Rose (Husky Oil) east a long-term framework contract on the Tampen OIL COMPANIES Reservoir and the contracts of Newfoundland. Aker Verdal won contracts for field (Statoil) while Aker Reinertsen won a similar

SUPPLY CHAIN SUPPLY seismic Drilling Engineering Operator/ fabrication of jackets for Clair (BP) and Goldeneye contract on the Halten-Nordland field (Statoil) and Project Duty holder Management MAIN is growing in (Shell) fields in the UK sector of the North Sea. CONTRACTORS importance The companies engaged in these contracts will gain Leirvik Module Technology won a contract for the valuable experience and build capabilities which at SYSTEM INTE- E, I&T GRATORS Down-hole Subsea in the various Clair living quarters (BP). A benchmark study has a later stage can be introduced in markets outside and Well Fabrication Services and Package Decomis- recently been initiated to monitor the progress of the North Sea. Supplier sioning regions.” PRODUCT Drilling the project in order to compare with “best in class” equipment MMO, SUPPLIERS Transpor- tation Arild Selvig, FMC projects worldwide. The Norwegian strength lies in better and more Marine Offshore Equitment Systems & Supply Kongsberg Subsea effective implementation models, and willingness and Equipment SERVICE Models COMPANIES The companies in this area refer to smart enginee- to accept long-term contracts with flexibility to ring, good purchasing procedures and good house- adapt services to client needs. hold as reasons for their success. OFFSHORE DRILLING The Norwegian rig companies have targeted certain markets outside Europe. Last year Ocean Rig’s new fifth-generation 6 7 1990s the country is particularly interested in improved recovery from existing fields, production ”Clusters of suppliers and from new fields and exploration activities. oil companies are a Statoil was also awarded operatorship for block valuable combination.” 4 in the Plataforma Deltana area off eastern Venezuela in 2003. Statoil is committed to drilling Per Bjørn Habbestad, ABB three exploration wells over the next four years Offshore Systems and will continue to work with the Venezuelan Ministry of Energy and Mines and the state oil company Petróleos de Venezuela (PDVSA) to Installation at Girassol, Kongsberg Simrad is another example of interna- Tree lift off South Africa off Angola. support the development of the Venezuelan supply (Picture: FMC) tional success.The company is the market leader in (Picture: FMC) and service industry. dynamic positioning of FPSOs and shuttle tankers, position mooring and underwater positioning In 2000 Norsk Hydro signed an agreement with systems. In 2002 more than 100 systems were NIOC for exploration of the Anaran block on the exported to clients around the world. border to Iraq. Geological fieldwork has been ongoing in the whole period. In 2002 corridors and Another niche product is marine and subsea roads were cleared for mines in order to undertake topside control systems. In 2002 the company was seismic surveys. During this year more than 500 km awarded contracts for Thunder Horse (BP) and for Norsk Hydro did geological of seismic data was gathered. fieldwork in Iran last year. Habanero Llano (Shell) in the Gulf of Mexico. In (Picture: Hydro) rigs were chartered for assignments in Canada and referred to as example where Norwegian Brazil the company won a contract for Viola The drilling location for the first well is now Angola. One rig is equipped for winter operations technology and long-standing skills development (Petrobras) in co-operation with FMC Kongsberg established. Drilling is planned to start in 2003. off Canada, and is probably the only rig in the world within safety has paved the way for a breakthrough Subsea. Norsk Hydro is the first foreign company to capable of performing such winter operations today. internationally. undertake exploration in Iran in such a heavily The other Norwegian based rig companies are The company is also renowned for its autonomous mined area.This challenging task has been exploring business opportunities in international In 2002 the company signed a contract with Global underwater vehicle (AUV) named Hugin, a performed according to international safety markets as exploration drilling on the Norwegian Santa Fe for the delivery of free-fall lifeboats for free-swimming sensor carried for high-resolution Statoil became operator standards with great success. offshore Iran. (Map: Statoil) Continental shelf is decreasing. two semi-submersible rigs in Angola and Nigeria. seabed mapping, imaging and pipeline routings in The eight lifeboats are the biggest of their kind in deep water. Norwegian based companies have a major share the world. of the international drilling equipment market. The second AUV was sold to a survey company in ”The key to success has Maritime Hydraulics, a subsidiary of Aker Kvaerner, Working with ExxonMobil the company developed the Gulf of Mexico in 2002. won a contract for drilling equipment to Thunder specifications for Kizomba A and B in Angola.This been to work directly Horse (BP) in the Gulf of Mexico and a contract resulted in deliveries of a total of 13 free-fall OPERATORSHIP Statoil secured two interna- of supplying drilling equipment to 3 platforms on systems to Kizomba and Erha in Nigeria. tional operatorships last year. Statoil became the toward the end users.” Azeri, Chiraq and Guneshli (AIOC) in the Caspian development operator for phases six, seven and Kjell Sørensen, Norsafe Sea. The company has also been awarded contracts for eight of the South Pars gas and condensate field in conventional lifeboats to BP in the Caspian Sea and the Iranian sector of the Persian Gulf. The agree- MARINE SYSTEMS AND EQUIPMENT contracts for free-fall lifeboats on Clair (BP) and ment falls within the priority areas of the National This segment contains several niche products Goldeneye (Shell) in UK. Iranian Oil Corporation (NIOC). Since the opening and services.The Intsok partner Norsafe may be of the doors to foreign investment in the late 8 9 Socio-cultural understanding and business practices

Intsok’s annual conference in Stavanger in December small costs for the company. He prefers evolution – not revolution – for the focused on socio-cultural understanding and local industry when doing training programs and business practices. On the next pages we highlight Research shows that 25-40 percent of US and bringing local engineers into the project organisa- “The partner must be some of the guest speakers’ valuable contributions. UK managers failed as a result of cultural shock. tions. Furher his recommendation is to support the Michael Price, researcher at the Centre for This is often due to their short-term assignments existing infrastructure and adjust technology credible, influential and Intercultural Communication concentrates on and inadequate training before going abroad. solutions to local requirements. Brustad-Nilsen also cultural cost-drivers in international business.Victor encourages the companies to build own facilities willing to share risk.” Baumann of Aker Kvaerner advises the partners to Victor Baumann’s experiences relates to Nigeria. on back of projects. Victor Baumann, Aker Kvaerner be well prepared before entering new countries. His first advice is to do your homework.Your Next page: Building competence in West Africa choice of partner is make it or break it.Therefore, • spend time to learn to know your partner, check references. Baumann also emphasises that “the partner must be credible influential and willing to ”The single greatest barrier to business success share risk.” is the one erected by culture.” When it comes to socio-cultural understanding and Edward T. Hall, British anthropologist behaviour, Baumann calls for the same, solid foot- work when it comes to choosing your expatriates: “Expatriates must respect and like to work with Nigerians for this to become mutual. Beeing respec- ted locally, improves your safety.” Baumann has worked with various businesses in Nigeria for 24 years. Gunnar Brustad-Nilsen of ABB He stresses that they must have high integrity. Offshore Systems prefers evolution, not revolution Going there also calls for learning from others and ”Bring local engineers into the when working with local industry. that you build a network.You can then avoid their project organisations.” mistakes and learn the power game faster. He Michael Price strongly recommends companies to reminds that one enemy can make more harm Gunnar Brustad-Nilsen, ABB Offshore Systems take cultural issues into their mainstream business, than ten friends can do good. because it is not a side project:“Intercultural competence means new business opportunities You will only know if your choices were right when and a competitive advantage.” you become operational. For your own safety you should also have contingency plans and be sure you On the subject of corruption Price encourages the are well connected. companies to be more specific when talking about it. Are we talking about corruption or extortion, he Baumann claims it is possible to do decent asks, is it a bribe or a facilitation payment? And business most places.“But do not compromise.” who’s problem is it? Gunnar Brustad-Nilsen, Senior vice president of ABB Offshore Systems appreciates local presence Price does not consider corruption as an oilwhee- and content.This closeness to the customer is ler at all. It’s a cost-driver, and it can become needed both front end and during field develop- Teamwork at Girasson, off Angola. Winning or loosing internationally very much comes down to respect and coope- extremely costly:“In fact, it’s sand in the machinery.” ment and operations. (Picture: Ø. Hagen, Statoil) ration with the local people.This scene is from Baku. (Picture: Statoil) There are no short cuts, you have to train staff to 10 tackle ethical dilemmas.This represents relatively 11 Major events

BUILDING COMPETENCE IN NIGERIA For the third time Intsok and ONS invited interna- Kerimov, took part in the delegation program for The seminar had about 100 attendees. Petro- Norway and Nigeria signed a Memorandum of under- tional partners and delegates to attend a special ONS.The Minister presented a view of the past Canada, EnCana, Norsk Hydro and Norwegian standing in February 2000 covering bilateral co-opera- program during ONS.There were about 45 and future for Azerbaijan under the Exploration contractors and suppliers gave presentations. tion within the energy sector and associated environ- delegates from seven different countries involved in promotion forum at ONS. Newfoundland and Labrador exhibited at ONS and ment. In addition to the private sector development, it the program: Angola, Azerbaijan, Iran, Nigeria, Russia also took part in the Exploration promotion forum. will contain technology transfer and competence buil- and Venezuela. AUSTRALIA Western Australia came with ding and institutional co-operation between the two countries petroleum directorates. Monday, August 26, Det Norske Veritas and Statoil a delegation to the ONS 2002, where they took IRAN Intsok has appointed Mr. Mostafa Mansoori Intsok has formulated a study for private sector hosted four workshops for Angola, Azerbaijan Iran part in the Exploration promotion forum, and as a local advisor to assist Intsok partners in the development in Nigeria.The objectives of the study and Nigeria. 20 partner companies participated in the exhibition. Iranian market. Intsok organised a two-week local are to recommend ways and means of increasing and an overall successful event. capability study tour to Iran in January.The purpose improving the capabilities of Nigerian supply and Intsok’s local advisors from Angola, Nigeria and Iran BRAZIL Mr. João Carlos Nunes, a former top was to expose Norwegian companies to local Minister of Fuel and Energy , service companies, and to assess areas of co-operation were also present in Stavanger during these days. manager of Petrobras, has been selected as the contractors, suppliers, service companies and Medjid Kerimov, on ONS fishing trip to Kvitsøy. with the Norwegian business community. Individual follow-up plans for market entry local Intsok advisor to assist partners in the construction yards.The delegation visited Ahwaz, The work executed by a combined Nigerian and Under: Minister of Oil, strategies to these markets were prepared for the Brazilian market. Busher, Arak, Esfahan, Neka and Tehran. Bijan Namdar Zanganeh Norwegian team is progressing according to schedule respective Intsok partners. In January Intsok visited all of the Brazilian shipyards The main lessons learned were presented to Intsok meets Statoil´s Fred Ole Jahr towards a completion on July 1, 2003. at Oil and Gas Conference The six month 300,000 US-dollar study has been in order to establish contact and explore business partners at the Iran network meeting in March. in Teheran. funded by the Norwegian Development Cooperation ANGOLA Intsok has established an office in opportunities for Norwegian suppliers. The chairman of Intsok, Mr. R. Rasmus Sunde, gave Bottom: Speaker of the (Norad) and the Norwegian Ministry of Petroleum Luanda with Mr. Emilio Grion as the local Intsok Intsok, in co-operation with our sister organization a presentation on the development of a compe- Parlament, Mehdi Karoubi, meets Aker Kvaerner and Energy. advisor.The Minister of Petroleum and Energy in Brazil, (ONIP), and the Brazilian embassy in Oslo, titive supplier industry at the Intsok/ONS topical Engineering´s Anders Tellefsen. There is an agreement between the Nigerian headed a delegation to Angola late May.The organized a visit in May for a Brazilian business luncheon in Tehran in April. 120 people attended. Installation in Nigeria. Department of Petroleum Resources and Intsok that president of Norsk Hydro, top managers and delegation to Oslo, Stavanger, Bergen, Ålesund and A Petrad training program was held, with the (Picture: Shell) the latter in 2003 shall organize seminars on marginal senior representatives from Statoil and seven main Trondheim.The delegation met some 20 Intsok support of Intsok partner companies, in Ahwas field development, advanced subsea technology and contractors took part in the business delegation. partner companies. during April. More than 100 students participated deepwater technology. Meetings were held with senior executives from The Norwegian Minister of Petroleum and Energy in this program, mostly from the National Iranian Norad will partly fund the seminars. Sonangol and TotalFinaElf.The Minister was gave a key note speech at the World Petroleum Oil Company (NIOC). accompanied by the Angolan Minister of Petroleum Congress (WPC) in Rio de Janeiro in September. TECHNOLOGY TRANSFER TO ANGOLA during the whole visit. He was also received by Several Norwegian papers were presented, and Intsok signed a Memorandum of understanding with the President of Angola. several companies had poster booths. NIGERIA Mr. Moses O. Kragha has been assigned the Angolan Chamber of Commerce and Industry in Intsok promoted partner participation at the Statoil was awarded the “Oil industry’s Oscars” in as Intsok’s local adviser and will assist Intsok 2002 with the purpose to offer assistance in Angola oil & gas annual conference and exhibition the category technological excellence for their partners in the Nigerian market. technology transfer between Angolan and Norwegian 2002 in Luanda in December. Several partners solution in reduction of CO2 emissions. Intsok promoted papers and exhibitions from enterprises, but also to support a private sector presented papers and exhibited at this fourth 12 Norwegian companies exhibited at the partners at Offshore West Africa in Abuja in March. development program for the Angolan industry. official conference. Norwegian pavilion of Rio oil & gas show, which Intsok together with the Norwegian oil spill control A curriculum for education of technicians including was organized in parallel with WPC. In addition, association (NOSCA) hosted a workshop in June a train the trainer program in subsea field development and operation at the National Petroleum AZERBAIJAN The annual Norwegian techno- some 10 companies of Norwegian origin held in Port Harcourt. Institute in Sumbe is proceeding according to plan. logy day in Baku with seminar and reception was booths at the show. Together with Petrad, Intsok organized a capacity The project is a joint initiative between main held June 3, the day prior to the opening of the building seminar on asset management and pipeline contractors in Intsok (ABB Offshore Systems, Aker Caspian oil & gas conference and exhibition. CANADA In connection with the official visit by systems in June. Both events were in Port Harcourt Kvaerner and FMC Kongsberg Subsea) and is Mrs. Brit Skjelbred, deputy minister in the Ministry King Harald and Queen Sonja of Norway in May, and 120 people signed up for each event.These sponsored by Norad, the Norwegian Ministry of of Petroleum and Energy, opened the seminar. Intsok, in co-operation with the Norwegian Ministry events were sponsored by the Norwegian Ministry Iran pictures: Sven E. Furulund. Petroleum and Energy and the Angolan Ministry of The seminar had about 75 attendees. of Trade and Industry and the Norwegian Trade of Foreign Affairs. Petroleum.The Rogaland Education and Training A delegation of four from The Ministry of Fuel and Council (NTC), organized an oil and gas seminar Centre is engaged as a project manager. 12 Energy and Socar, headed by minister Medjid in Halifax. 13 RUSSIA In January Intsok, in co-operation with Upstream technology group), British Gas (Egypt, UK Intsok, MEM, PDVSA and Camara Petrolera in This program was a co-operation with the local the Russian trade organisation, organised a and Kazakhstan) and Genesis in London. co-operation with the Ministry of Petroleum and branches of The Norwegian Petroleum Society conference in Norway on opportunities in the A mission to Aberdeen to meet BP,Shell,Wood Energy, Statoil and Norsk Hydro. (NPF).The first part of the meeting was an internal Russian offshore market.The conference was Group, Amec and Halliburtion Brown & Root was A total of 17 companies and organisations took partner meeting with focus upon strategies and followed by two parallel workshops between organised by Intsok in November. 17 companies part from Norway and 45 companies participated market priorities.The second part was an open Russian delegates and Intsok partners. More than attended the mission. from the Venezuelan side. invitation to the oil and gas society in the respective 160 people attended the conference. Intsok had the pleasure of hosting the meeting in cities, where Intsok presented a market outlook, an Intsok, in cooperation with the Norwegian Trade USA As of December 2002 Mrs. Else Hafstad Oslo with the President of Venezuela, H.E. Hugo industry analysis and the Intsok planned activities Council (NTC), hosted the Russian-Norwegian oil Terry will act as country manager for Intsok in Chavez and the Minister of Energy and Mines, H.E. for 2002. and gas meeting in November, on the occasion Houston. She is a former employee of Statoil and Rafael Ramirez, in October.The meetings were Intsok held a number of network meetings for of President Putin’s visit to Norway. 45 people will be engaged in a full time job for Intsok. attended by Norwegian contractors and suppliers. the partners discussing business challenges and attended the meeting. In March Intsok hosted the fourth Houston week. business opportunities in the different markets. In July Intsok hosted a three day seminar on field The selected themes were floating production, CHINA Intsok and Petrad together hosted Intsok employees met regularly with the partners development and offshore technology in Koralovo subsea system and technical directions for a deep water field seminar for China National throughout the year advising them on general outside Moscow. 25 representatives from Caspian deepwater developments.The ambassador to USA, Offshore Oil Corporation (CNOOC) in business strategies and entry strategies for the Oil Company and Yukos participated. Mr. Knut Vollebæk, held the opening address and Guangzhou in April.The seminar was also arranged different markets. Russian-Norwegian oil and gas was on the agenda a dinner speech. for Petronas in Malaysia in May. Throughout the year Intsok has provided the in Moscow in September. Mrs. Brit Skjelbred, deputy The seminar and workshops were complemented In addition, a seminar on gas – exploration, partners with market information and regularly minister of Petroleum and Energy gave the opening with visits to the major oil companies: BP, production and utilisation was developed for updates on international offshore priority projects. speech. A total of 90 senior representatives from ChevronTexaco, ConocoPhillips and Shell. CNOOC in Chengdu in September. In addition, the Intsok local advisors from Angola, Norwegian and Russian authorities and companies In Intsok’s evaluation of Houston week, The seminar advanced technology for offshore gas Brazil, Nigeria and Iran have visited selected participated. the conclusion was that it was an improvement fields development was developed for CNOOC, partners in Norway and provided support to A delegation of Norwegian partners visited compared to previous years.This event should PetroChina and Sinopec, in Chengdu in October. companies’ entry plans for the same markets. Moscow in November. Four workshops were held continue to address topics as floating production A total of 10 Norwegian based companies partici- The sixth annual conference on internationalisation between Gazprom, Gazflot, Rosshelf, and subsea systems. Seminar should be pated and presented 16 papers during this seminar. (see separate story on pages 10-11) with focus on Sevmorneftegaz, Caspian Oil Company,Yukos, Lukoil supplemented with topical workshop and small Norad and The Ministry of Petroleum and Energy, innovation and R&D in the petroleum sector was and the Norwegian oil and gas industry. A total of booths for poster exhibitions. through Petrad, sponsored all of these events. hosted as a joint initiative between Intsok, OG21, 100 people attended these workshops.The topics Intsok is currently working on a vendor list project. Demo 2000 and the Oil and Gas Program of the were Russian market perspectives and the The objective is to further improve partners’ SINGAPORE AND SOUTH KOREA A dele- Norwegian Research Council in Stavanger in Norwegian experience in offshore development. position to win work with major oil companies gation of eight companies participated in six December. 150 people participated at the Much activity in the A delegation from Surgutneftegas visited and contractors through awareness processes different workshops in South Korea and Singapore conference. Sunrise at ONS Russian- Norwegian network in Stavanger in December.The representatives from and gathering of intelligence information on in early April.The delegation met from10 to 35 key in Stavanger. 2002. Here is Rinat R. Murzin, Head of Ministry of Natural Russia visited several Intsok partners and they projects, who is who, contracting and procurement representatives from each of the shipyards Hyundai, Resources, at a seminar in met representatives of the Norwegian Petroleum practices etc. Samsung and Daewoo in South Korea. In Singapore Oslo in January. Directorate. the delegates met representatives of Keppel Fels, VENEZUELA Representatives from the Ministry Jurong and SembCorp Engineering International. UK A UK network meeting was held in of Energy and Mines (MEM) and PDVSA visited A workshop was also arranged with Prosafe Stavanger in February. Representatives from BP Norway in early February. Meetings were held with Production.The shipyards agreed to arrange new and Shell UK presented their project portfolio with the Ministry of Petroleum and Energy, Statoil, Norsk workshops in 2004. emphasis on the Clair and Goldeneye projects. Hydro and Intsok contractors. One-to-one meetings between Shell, BP and Intsok A one-week program on building national capacity NORWAY In January Intsok organised five mee- partners were organised. in offshore development was conducted in tings with partners and industry representatives in 14 In June Intsok partners met BP (Angola team and Venezuela in June.The program was organized by Kristiansand, Stavanger, Bergen, Oslo and Trondheim. 15 Key clients

OPERATORS Shell has consolidated all Intsok to Angola in May, a meeting with TotalFinaElf upstream projects under a central management. (TFE) was arranged where activities and possibilities Their top management met Intsok in Oslo in for Norwegian industry were discussed. Financial result September. A meeting was held with Shell UK in The business and development manager of TFE in Aberdeen in November and with Shell E&P Norway presented a keynote paper on the subject The financing of Intsok is based on co-financing by The financial result for 2002 shows a surplus of projects in the Hague, also in November. research and development process in TFE at the industry and the government.The revenues for NOK 1246,064.The Board considers the Intsok Intsok has agreed to organize regular meetings Intsok’s annual conference in December. 2002 totalled approximately NOK 19 million. foundation as financially stable and viable. between Shell E&P projects and partner companies and also to discuss future technology needs and A half-day meeting with ChevronTexaco was developments. Intsok is working with Shell’s key arranged during the Houston Week 2002 with Intsok is working with operating companies in Nigeria, as well as the key participation from 30 Intsok partners. The world- Shell’s key operating specifying environment in Shell deepwater services wide deepwater activities, plans and strategies, companies in Nigeria in the Hague, London and Houston, to assist in organisations and contacts for business were Appointment of board members (Pictures: Shell) qualifying Intsok partners. presented and discussed in an informative way. The Ministry of Petroleum and Energy appointed the As of September 1, 2002,The Ministry of Petroleum following new board members as of March 1 and and Energy appointed the following new board Meetings with ExxonMobil were held during the May 1, 2002 respectively: Mr. Jan Farberg, Ministry of members: Mr. Per Ludvig Magnus, Ministry of Foreign visit of the Norwegian Minister of Petroleum and MAIN CONTRACTORS AND SHIPYARDS Trade and Industry and Mr.Torkild Reinertsen, Affairs and Mr. Odd Mosbergvik, Statoil Energy to the Offshore Technology Conference Intsok creates meeting places for partners to meet Reinertsen Group (OTC) in Houston. A main issue for Intsok was and present their products and services to the to develop relations between ExxonMobil and international main contractors and ship yards. Norwegian industry. A total of six shipyards in South Korea and Intsok had a meeting in August with the Singapore were visited by a delegation of Intsok ExxonMobil Norway management where several partners in April. proposals for co-operation with Intsok partners During the mission to London in June, a meeting Organisation were discussed. Follow-up meetings took place in was organised with Genesis, being the front-end Houston in September. arm of Technip-Coflexip. 12 partner companies The Intsok secretariat had seven full-time employe- absence rate of 0.09 percent. In December a senior representative from participated. During the mission to Aberdeen in es in 2002.The organisation is based in Oslo with The activities of the Intsok secretariat do not ExxonMobil’s Upstream research company advised November, half-day meetings were organised with an office in Stavanger. directly affect the external environment and no Intsok’s Annual conference participants about the Amec, Halliburton,Wood Group and Aker Intsok has also appointed local advisors in Angola, Health, Safety and Environment report will therefo- research and development process in the company. Kvaerner. A total of 17 companies participated in Brazil, Iran and Nigeria to support partners ente- re be made. the delegation. ring these markets. As from 1 December Intsok has Intsok’s administration was represented at the Top A meeting with 22 Intsok partners and BP on their also employed a full time country manager in Management Forum of Kon-kraft, the joint deepwater activities in the Gulf of Mexico was Houston and a country manager for Russia is being Norwegian government and industry driven initiati- arranged during the Intsok Houston Week 2002. recruited. ve to increase the competitiveness of the Another meeting was held with BP in London in Absences due to illness among Intsok employees Norwegian oil and gas sector. June to discuss new concepts and enabling amounted to a total of 14 days.This represents an technologies with applications for Angola deepwater projects.The annual meting with the managing director of BP Norge was held in October. A meeting with BP UK was held in Aberdeen in November. 15 Intsok partners attended. During the visit by the delegation from the 16 Norwegian Ministery of Petroleum and Energy and 17 Outlook The Intsok secretariat

Total revenues for the Norwegian supply and service industry were estimated at USD 12.5 billion (NOK 94 billion) in 2001, which is approximately 10 percent of the total global offshore market. The board is pleased to observe that the revenues of the Norwegian supply and service industry in international markets has increased from USD 3.8 billion (NOK 28 billion) in 1999 to USD 4.5 billion (NOK 34 billion) in 2001.The goal of generating Mr. Ludvig Magnus Per Mr. Morten Ruud Mr. R. Sunde Rasmus Mr. Gulbrand Wangen USD 6.7 billion (NOK 50 billion) in international Ms. Mariann Marthinussen Mr. Skretting Håkon revenues is achievable with long-term commitment by the industry and continued and increasing support from the government.The main challenge for the industry in the years to come is to maintain the position in the maturing home markets on Norwegian and UK continental shelves and at the same time expand into overseas markets. The Norwegian industry has a competitive advantage in the world’s deep-water markets. In addition, Mr. Odd Mosbergvik Mr. Ole-Kristian Bærvahr Mr. Frode Alfheim Mr. Einar Holmefjord the industry is well positioned to supply niche pro- Mr. Hagen Per ducts and services to onshore operators and contractors as well as systems, modules and equipment to the fabrication yards in Asia and elsewhere. To further support the strategy for internationalisation the board of Intsok has decided to launch a study on the Norwegian supply and service industry internationally towards 2010.The result of this study will form the basis for updating the market strategy of Intsok in 2004-2005. Mr. Jon Erik Reinhardsen Mr.Torkild Reinertsen Mr.Torkild Mr. Steinar Gregersen Mr.Werner KarlssonMr.Werner Ms. Ingvild Litlabø Mr. Heglund Svein Oslo, 26 March, 2003 US office Angola office Nigeria office Iran office Brazil office: Mrs. Else Terry Hafstad Mr. Emilio M. Grion Mr. Moses O. Kragha Mr. Mostafa Mansoori Mr. Joâo Carlos S. Nunes [email protected] [email protected] [email protected] [email protected] [email protected] R. Rasmus Sunde Jon Erik Reinhardsen Jan Farberg phone: + 1 713 807-9451 phone: + 244 2 44 81 55 phone: + 234 1 267 34 50 phone: + 98 21 201 5731 Avenida Rio Branco 156 Chairman adress: Intsok US Intsok Angola Kragha & Associates, Intsok Iran, c/O NIBC Sala 629/631 2777 Alan Parkway, suite Rua de Benguela no 17 c/o Intsok No. 4, 3rd floor, Melat Tower 20043-900 1185 Houston Luanda, Angola 1st floor Foresore Towers P. O. Box 19395-3446 Rio de Janeiro Morten Ruud Odd Sverre Haraldsen Ole-Kristian Bærvahr Deputy Chairman TX 77019, USA 2A Osborne Road, Okoyi Tehran, Iran RJ-Brazil P. O. Box 4216, Marina Mr.Tollak Melberg Mr.Tollak Mr. Jan Farberg Mr. Odd Sverre Haraldsen Lagos, Nigeria

Odd Mosbergvik Per Ludvig Magnus Tollak Melberg

18 Frode Alfheim Steinar Gregersen To r kild Reinertsen 19 dtra:atcs rgi ein Apropos. Design: Graghic Editorial:Tacticus.

Intsok partners at December 2002

• ABB, Oil, Gas and ASA • Norsafe AS Cables AS Petrochemicals • Grenland Offshore AS • Norsk Hydro ASA, • SeaFlex A/S • Acona • GS – Hydro Norge AS E&P • Siemens A/S, Division • Advanced Production • Hartmark Consulting • Nortech, Inc. Oil and Gas and Loading AS (APL) AS •Norwegian • Simex A/S • Air Products AS • Hitec Vision AS Environmental • Sintef • Aker Kværner ASA • Holta & Haaland AS Technology AS Petroleumsforskning AS • Atlantis Deepwater • Hydralift, Drilling • Novenco AS • SM Steinsvik Technology Holding AS Division • NUI DaWinci Services Maskinindustri AS • Autronica Fire and • Hydralift, Crane AS • Software Innovation Security, Division Oil & Division • NUTEC a.s ASA Gas • Institutt for • Ocean Rig ASA • Statoil ASA • Blom Maritime Energiteknikk (IFE) • OCEANOR • Steel Products • Bredero Price Norway • IKM Testing A.S. • Offshore & Marine Offshore AS AS, Dep.Thermotite • Inenco A/S ASA • Stolf Offshore AS • ClampOn • ITC AS • ONS (Offshore • Storvik & Co AS • CorrOcean ASA • JM Consult AS Northern Seas) • Structural Engineering • Crystal Production • Kongsberg Simrad AS • Petec Software & • Sørco AS ASA • Leirvik Module Services AS • Team Møkster AS • Det Norske Veritas Technology AS • Plugging Specialists • Technor ASA • Eide Marine Tech AS • LMG Marin International AS • Telenor • Eksportfinans ASA • Marintek • ProSafe ASA • Terra Energy Services • FMC Kongsberg • MPU Enterprise AS • Pro-Vison • The Bridge Group AS Subsea • Multiconsult AS • Rapp Bomek AS • Tranberg AS • Framo Engineering AS • Navion ASA • Read Group AS • Trelleborg Viking AS • Frank Mohn AS • Nexans Norway AS • Reinertsen Engineering • Triangle Equipment • GANN Mekaniske AS • Norwegian ANS • Valiant Industrier AS • Glamox International Geotechnical Institute. • Scandpower AS AS • Norconsult AS • Scan-Sense AS • Global Geo Services • NORFASS AS • ScanRope Subsea

Oslo office Stavanger office Hoffsveien 1A Professor Olav P. O. Box 631, Skøyen Hansenssvei 10 N-0214 Oslo P. O. B o x 600 Norway N-4003 Stavanger [email protected] Norway 22 06 14 80 51 87 65 00 www.intsok.com