Some Perspectives of the Norwegian Oil and Gas Clusters.

1
NOT AN OFFICIAL UNCTAD RECORD
Some Perspectives of the Norwegian Oil and Gas
Clusters.
Jacob SannesDirector, Statoil do Brasil
Ltda.Some Norwegian experiences that could be
applicable in Brazil.
2
What is a cluster.

• Clusters were not invented by Michael Porter
  but his work in the early 90-ies established the
  term for common use.
• Porter defined clusters as a location where
• Cost and quality of inputs
• Nature and intensity of local competition
• Sophistication of local customers, and
• Presence of related industries
• interact to create dynamics which innovate, boost
  productivity and attract new industry to that
  location.
• Porter stated that success is greatest where
  competition is strongest and peer companies
  compete to be best but also have constructive
  co-operation.

3
Some examples.

• Italian shoes
• Hollywood films
• Broadway and London Theatres
• Detroit cars
• Silicon Valley IT
• Madison Avenue advertising agencies
• Houston and Norwegian Oil and Gas Industry.

4
Clusters must develop

• Productivity and technology may out-compete the
  advantages of a cluster
• Heavy shipbuilding moved from Europe and USA to
  take advantage of higher productivity in Japan
• Steel production moved from proximity to iron and
  coal in Europe and USA as combination of
  productivity and new technologyin Japan plus
  cheaper bulk transport developed
• In some cases, new clusters develop from the
  ruins
• Specialist shipbuilding in Europe but not USA
• Specialist quality steel production

5
Norways goals and strategies -

• The petroleum resourcesbelong to the nation
• Development of the resources must benefit the
  society as a whole
• The goals and strategies
• National involvement
• Resource management
• Technology and competence

6
Transforming the societyDeveloping the necessary
knowledge

• Build competence
• Adapting the education system
• Focusing on training and developing employees
• Stimulating students
• Transform existing industries
• Maritime
• Mining
• Process
• Maintain a balance between oil and non-oil
  sectors

7
Strengthening the competitivenessof the energy
service industry

• Structure projectsaccording to national
  capabilities
• Develop technologyin joint projects
• Inform
• Educate
• De-brief
• Help with advice

8
Balancing Competition and Co-operation

• Successful clusters are invigorated by strong
  competition, very often personal and driven by
  strong individuals desire to show who is best.
• Inside successful clusters there is recognition
  that some issues are best solved through
  collective actions.
• The Norwegian society traditionally works towards
  solving issues through co-operation, and this has
  helped in establishing the Norwegian Oil and Gas
  cluster.
• To sustain any cluster its members must develop a
  mode of co-operation whilst maintaining
  competition.

9
The Norwegian co-operation model
Govern-ment and Authorities
Contracting and supply industry
Oil companies
Employees and Labour Unions
10
A large oil and gas producerNorway has
celebrated 30 years of production

• A large producer and exporter of oil and gas
• Oil and gas revenues represents 20 of Norways
  GDP
• A strong and capable domestic support industry
  now going international

11
Improved recovery and reservoir management
Achieved recovery factors
Field
1996
2000
Target
1986
Statfjord
61.4
65.6
68
49.4
49.4
54.5
62
46.5
Gullfaks
12
Supplier Development Programme

• GOALS
• Bring new technology to market
• Establish new possibilities for the industry
• Availability of new products, giving Statoil
  reduced cost, environmental profit, and increased
  safety

PROJECT STATUS LUP - 2000

• STATOILS CONTRIBUTION
• Define user requirements
• Technical competence
• Project control
• Establish contacts
• Advising

13
Principles applied in the Development of a
Norwegian Oil Gas Industry

• Focus on development of a supply industry
  sustainable on a long term basis
• Contractors to be selected on a transparent,
  non-discriminatory manner, securing best value
  for money
• Technical solutions and contract management
  structure that accommodates domestic supply
  industry
• A proactive information policy towards domestic
  supply industry

14
Norwegian Oil Gas World-Class
ClustersAround 80.000 directly employed in sector
15
A sustainable future for Norway?

• Fewer discoveries and developments in Norway will
  shift industry focus towards operational
  challenges and internationalisation
• Many Norwegian companies already co-operate with
  local industry in other countries, using their
  capital and technology to develop competitive
  local companies
• Statoil strongly believes that supporting local
  industry to become competent and competitive will
  bring benefits to Statoil, the oil and gas
  industry and the host country later

16
And for Brazil?

• Brazil already has a nucleus of an oil and gas
  cluster in Rio/Niteroi and a number of competent
  companies in related areas
• Brazil has strong universities offering higher
  education in all relevant areas
• Brazil has strong industry associations and are
  used to establishing industry-wide development
  programs
• Brazil has a strong national champion for the
  development of a competitive national industry

17
Going forward

• I believe Brazil is in a unique position to
  develop a national oil and gas cluster
• But this will require a long-term view from all
  engaged
• Federal and State government and authorities
• Financing institutions
• Employees and unions
• Contractors and service industries
• Oil and gas companies
• which must all understand the potential benefits
  from co-operating whilst being internationally
  competitive.
• I hope Statoil may be part of this challenging
  development