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Norwegian companies attractive for russian partnerships

Even if the focus has been on the giants StatoilHydro and Gazprom after the Shtokman contract, there are numerous other players in the extensive Norwegian petroleum cluster to take market shares in Russia. Their combined efforts over several decades have made profitable partnerships between Russian and Norwegian companies possible.

INTSOK, the Norwegian Oil and Gas Partners, has a strong focus on the Russian markets, and they have worked hard to strengthen the ties between the Russian and Norwegian petroleum industry. Håkon Skretting is INTSOK’s Regional Director for Australia, China and Russia, and he has the strong belief that a cooperative effort between Russian and Norwegian companies will benefit both parties greatly.
“We want to structure, increase the efficiency and motivate increased cooperation between Russian and Norwegian petroleum contractors. Norwegian companies will in many cases increase the possibilities to win new market shares in Russia if they can find the proper partners for cooperation,” he says.
Twenty-five Percent of the World’s Petroleum Resources
The Barents Sea could become Europe’s most important petroleum region in the foreseeable future with estimates indicating that 25 percent of the world’s undiscovered petroleum resources could be found in the Arctic. The Barents Sea is an area where many fields have been discovered and mapped.
While the Shtokman field is the most famous, Skretting believes that other petroleum fields in the Barents region and the Norwegian supply industry successes so far in Russia have been underestimated. One example could be the Prirazlomnoye oilfield located south of Novaya Zemlya in northern Russia on the Pechora sea shelf, at a distance of 60 kilometres from the shore.
“INTSOK has been working together with Sevmorneftegaz to search for potential suppliers to this field. The first time the management of Sevmorneftegaz visited Norway to meet the industry was back in 2002,” he says.
Three dedicated workshops have been carried out and several of the suppliers who participated in the workshops have ended up as suppliers to Prirazlomnoye. “In this field Norwegian companies are the largest international contractors with a 25 percent share of all technology deliveries. Several of these contracts are the result of cooperation with Russian industry. Furthermore, two ice breakers have been constructed in Norway for this field,” Skretting explains.

The Prirazlomnoye oilfield south of Novaya Zemlya in Russia is ice-free for 110 days a year and the cold period lasts 230 days. In this area Norwegian offshore companies have utilized their thorough knowledge of offshore petroleum exploration.
© Sevmorneftegaz
The Prirazlomnoye field will probably start producing oil in 2010. Further east of Novaya Zemlya in the Kara Sea and the Yamal Peninsula, there are tremendous possibilities for offshore companies with arctic competence for petroleum exploitation. Yamal holds Russia’s biggest natural gas reserves, and in 2007 Gazprom invested considerable amounts of money to develop the Kharasavey and Bovanenko fields.
These fields were discovered in the late 1960s, but a lack of infrastructure has prevented the Russians from exploiting them. Skretting believes these extreme fields at 71° north could be a golden opportunity for the Norwegian petroleum industry in the long future.
“Operating in these rough conditions, Norwegian offshore technology and experience is very attractive for the Russians,” he says. Norway has utilized the massive offshore experience and competence as a spearhead to enter the Russian markets.
But investment in the Russian offshore industry is not only going north. Sakhalin has been the main investment area so far, and the investment in the Far East will continue at a high level for the next 30 years at least. In the Caspian Sea Lukoil is developing Yuri Korchagin, and two more projects are in the pipeline.
Russian Partnership Programme
The project for Partnership between the Russian and Norwegian Oil and Gas Industries is the most comprehensive INTSOK has ever done. The objective of this project is to:
1. Support increased partnership between Russian and Norwegian oil and gas industry
2. Support Russia to reach its target for local content in offshore projects
3. Support the internationalization of Norwegian and Russian technology and services
“Several Russian companies want to have contact with Norwegian companies with specific offshore technology and experience. Thus, they could come in a position for the development of both Russian and Norwegian offshore fields,” he says, adding that INTSOK has included 240 Russian companies in a database for companies with a capacity and willingness to cooperate with Norwegian partners. These companies can be studied at a database on website: www.intsok.ru
“These companies’ names and contact details are given to INTSOK by the Russian operators who are partners in the project. We don’t want to have as many companies in the database as possible, but the companies who can be the right partners for the Norwegian companies,” says Skretting.
INTSOK has mapped the Russian and Norwegian companies under www.intsok.ru as a part of Part 1 of the project.

Twenty-five percent of the world’s petroleum resources could be found in the Arctic, and the Barents Sea could become Europe’s most important petroleum region in the foreseeable future
© Norwegian Petroleum Directorate
Part 2 of the project has the following elements:
1. Maintain and update the information on Web
2. Arrange meeting places, “Match making workshops”
3. Assist the companies individually
StatoilHydro, Gazprom, Sevmorneftegaz and Rubin are important partners in INTSOK’s efforts to promote more interaction between Russian and Norwegian companies, but its main target group is small and medium enterprises (SMEs) within the petroleum cluster with specialized competence and possibilities to succeed in the Russian market. However, the project has also attracted larger enterprises who are also welcomed into the project.
St. Petersburg is the administrative centre for northern and western Russia, and the region is very central when it comes to engineering and choosing technology. However, while Russia is the world’s largest gas producer in the world, the north western regions of Russia do not have a well developed infrastructure for the contractors in the oil and gas sector. Skretting believes this is a great opportunity for Norwegian companies to offer their considerable competence to the Russians.
Project sponsors:
 Ministry of Foreign Affairs
• Ministry of Petroleum and Energy
• INTSOK, The Norwegian Oil and Gas Partners
• The Barents Secretariat
• Greater Stavanger Economic Development
• Finnmark County
• Troms County
• Nordland County
• Hordaland County
• Rogaland County
• Innovation Norway (main office)
• Innovation Norway Finnmark
• Innovation Norway Troms
• Innovation Norway Nordland
• Innovation Norway Hordaland
• Innovation Norway Rogaland
Russian partners
• Gazprom
• Gazflot
• Sevmorneftegaz
• Lukoil
• Arktikshelfneftegaz
• CKB Rubin
• Krylov Institute
• Association of Manufacturers of Oil and Gas Equipment
• Union of Oil and gas Industrialists of Russia
• Russian Union of Oil and Gas Service Companies
“We think Development of the Shtokman development will be a key project for cooperation between Russian and Norwegian industries,” Skretting says.

Aker Kværner Pusnes has been a major player in the Russian offshore fields for a number of years, and the Arctic Bow Loading System can load oil in temperatures as low as -46 degrees C.
© Aker Kværner Pusnes
Proven North Sea Solutions
Siemens in Norway is the global leader of Siemens’ operations in the oil and gas fields, and it is also a part of INTOK’s partnership programme. Since the very beginning of the oil age on the Norwegian Continental Shelf (NCS), Siemens has been a supplier of innovative products and solutions. Siemens aims to capitalize further on the unique competence in the Norwegian offshore sector in order to reach its objectives of being a global leader in the fields of oil, gas and marine solutions.
Dagfinn Wanderaas, Vice President for Siemens Oil & Gas Offshore, is Siemens’ foremost expert for the Russian petroleum markets, and he is seeing the Russian markets expanding rapidly as the Russians seek to increase their offshore petroleum production.
“We’re all over Russia, north and south, east and west, in the Barents Sea, the Baltic shelf, the Caspian Sea and in eastern Russia on the Sakhalin field,” Wanderaas says.
Siemens has built a solid reputation in Russia for 150 years, and combined with decades of strong Norwegian offshore competence on the NCS, this is quite interesting for the Russian offshore markets.
“The keyword is well-proven North Sea solutions. We started our activity in Russia in 1992, and we were not sure what this would give us. However, we met a competent and attentive audience, even if they did not know how to realize this into offshore technology,” says Wanderaas.
“We are delivering system solutions, not products, and we have taken over responsibility from the customers steering the projects in the right direction,” says Wanderaas, adding that he has been impressed with the thorough knowledge of basic science from Russian petroleum scientists. Siemens is always considering good engineers and scientists for its offshore petroleum efforts.


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