doing business in the stavanger region. the business case for being present... ...on the norwegian...
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The Business Case for Being Present ...
...on the Norwegian Continental Shelf
Large production, larger future resources Changed exploration and licensing policy
facilitating exploration and development of smaller fields in mature areas within the life span of existing infrastructure
... in the Stavanger Region
Most other companies are here, forming a strong and diverse oil and gas cluster
Research and development focused on the oil and gas industry Quality of life and infrastructure geared toward international
relations and foreign residents
Oil: 50 more yearsGas: 100 more years Gas resources
Future of the Norwegian Oil & Gas Market
Size World’s 3rd largest exporter of
crude oil Ranks sixth among oil producers
(NGL included).
30 years of production have depleted less than a quarter of the resources.
Expected remaining petroleum resources is more than 10.6 billion m3 of oil equivalents.
Focused Areas Gas has the largest future
potential Potential new discoveries in the
deep-water areas in the western parts of the Norwegian Sea and northern areas outside Lofoten and in the Barents Sea
Exploring mature areas (satelite fields and improved recovery of existing fields)
Remaining resources are becoming more difficult to produce
Market trends
Simplified ownership structure Increased opportunities to enter Norway through asset
swapping / purchases Investments in sea floor installation Increased focus on profit through cost reduction on existing
investments Deregulation of the gas market leads to more players, higher
risk and need of infrastructure and systems Statoil is being privatized
Gassco is set up to deal with infrastructure for the transportation of gas and Petoro has taken over the administration of SDFI-assets (the State's Direct Financial Interest). Both are located in the Stavanger Region.
Internationalisation of Statoil and Hydro 50 % of Statoil’s crude is expected to be produced out of Norway
Ministry of Petroleum and EnergyResponsible for resource management and for administering petroleum activities in Norway. Ensures that petroleum activities are conducted in accordance with applicable legislation and policies adopted by the Storting.
Ministry of Labour and Government AdministrationIn the field of safety and working environment, the ultimate regulatory responsibility lies with the Ministry of Local Government and Regional Development, but the NPD has been delegated supervisory responsibility within this field for petroleum activities on the continental shelf.
Norwegian Petroleum Directorate (NPD)Shall have the best possible knowledge concerning discovered and undiscovered petroleum resources on the Norwegian continental shelf. Carries out supervision to ensure that the licensees manage the resources in an efficient and prudent manner.
Public Authorities
Other LicenseesOther LicenseesProduction Licence OperatorsProduction Licence Operators
Ultimate Customers in the Oil & Gas Industry All multinationals are present in Norway, with offices in Stavanger or Oslo. The largest operators have their headquarters in Stavanger, except Hydro. Other licensees are spread between Oslo and Stavanger.
Svenska Petroleum UglandSvenska Petroleum Ugland
StavangerStavanger
OsloOslo
Other LocationsOther Locations
Aker EnergyAker Energy
AEDCAEDC PETORO
Main Contractors and Supplier Segments
Foreign based international companies include:
Large Norwegian companies include:
The Small Upstream Company
British independent oil and gas E&P company listed on the London Stock Exchange. Assets in the U.K., Danish and Norwegian North Sea, Indonesia, Romania, U.S. and Tunisia.
Following the acquisition of Petro-Canada’s Norwegian interests early 2001, Paladin set up a Scandinavian headquarters in Stavanger. The office also runs Paladin’s growing Danish interests.
After the first year in business, Scandinavia constitutes around 50% of Paladin’s total production and reserves. The company sees a large potential in the region and aims at further growth.
Although conditions in respect to infrastructure and quality of life were little emphazised in the first phases, Paladin employees highly appreciate these once settled.
Companies Recently Establishing or Expanding a Presence in Stavanger
The Major Downstream Company The Major Downstream Company
Following a change of corporate strategies during the late 1990's the French downstream company Gaz de France decided to enter the upstream segments.
A Norwegian office was set up in the beginning of 2001. The decision to settle in Stavanger was caused by a wish to be in the middle of the Norwegian oil and gas business community and with their first partner Statoil.
Licence partnership shares were bought from Statoil and Gaz de France was also awarded licenses in the latest licensing round.
Gaz de France sees no obstacles in continuing to expand in Norway.
Local amenities are very much appreciated.
Companies Recently Establishing or Expanding a Presence in Stavanger
The Major Services Supplier
Companies Establishing or Expanding a Presence in Stavanger in Later Years
The international giant Schlumberger employs 4000 in Scandinavia. Scandinavian headquarters are in Stavanger.
A research satellite was established in 1999 and now employs around 700. The satellite works with NCS oil and gas companies in research and problem-solving activities related to oil and gas fields on the Norwegian continental shelf.
The main topics worked on are within seismic stratigraphic interpretation, multi component seismic and reservoir monitoring. In these core areas research done by Schlumberger here is utilised quite extensively on other global markets.
Schlumberger considers Norway a favourable place to invest in R&D activities, due to the tax regime and highly qualified personnel.
Spin-off Possibilities in Other Markets
0
5
10
15
20
25
30
35
Billion NOK
1994 2001
Companies gaining experience in Norway, use their knowledge in other markets.
An indicator is the development of the Norwegian supplier industry, now going international as never before.
Growing Exports From the Norwegian Offshore Industry
Variety of Business Life
The Stavanger region has a large number of employees in the manufacturing sector and is the centre of North Sea oil and gas activity in Norway.
The Stavanger region is a major producer of hydroelectric power in Norway.
Bank, finance, wholesale and retail trade, hotel and restaurant services, as well as public services, are also growth areas in the region.
Rogaland is the most important agricultural region in Norway measured both in terms of gross product and man-labour years.
Egersund and Karmsund land more fish than any other port in Norway. Fish and shell farming are also important.
Oil & Gas is dominating, but not unique
Harbours and Supply Bases
Europe's largest offshore supply bases is in Risavika / Tananger and Dusavika
In addition harbours for short and long distance transport of general goods are located in Mekjarvik, Risavika, central Stavanger and central Sandnes
Stavanger harbour is the centre for inter- and intra-regional and international passenger transport and cruise ships.
Egersund (50 km to the south) hasferry connections with Denmark
Europe's Largest Offshore Supply Bases
Supply Base
Other Harbour
Risavika –
Tananger
Mekjarvik
Dusavik
Stavanger
Sandnes
Connections and Transportation
Stavanger Airport Sola is located 15-20 minutes by car from Stavanger and Sandnes.
In 2001 about 2,5 million passengers used Stavanger Airport, 0,5 million on international flights.
Railways link the region to Kristiansand in the south and to Oslo.
Major haulage companies have bases in this region and engage in extensive transport to and from other locations in Norway as well as the UK and the Continent via ferries in Stavanger, Egersund and Kristiansand.
Long-distance buses connect the region to Bergen, Kristiansand and Oslo. Buses and vessels connect the Stavanger area with the rest of Rogaland county.
Public transportation runs in the urbanised area on the Stavanger region.
Well Connected
Ferry LinksDirect Air ConnectionsFerry LinksDirect Air Connections
World Class Network of Broadband and Fibre
Cables
Installed and Planned IT Structure in the North Sea
A high speed telecom network is fully operational in the region with direct connections over Ekofisk in the North Sea to Scotland and Europe.
Fibre-optic cables cover most of the fields in the North Sea offering very large transmission capacities and improved communication quality.
Telecom costs are very favourable in Norway compared to most countries.
Telecommunications
Distances
The Stavanger Region houses around 190.000 in the city area and 270.000 in the wider region.
The main city centres are Stavanger and Sandnes, only 15 km (10 miles) apart.
Offices, supply bases and warehouses are located on the fringes of the residencial areas.
Extensive public transportation, networks of roads and a north-south railway, easily facilitates travelling.
15-20 minutes travelling distance between most locations: Residence, office, customers, airport.
A Compact Region
Dusavika
Forus business
area
Supply Base & Offices
15 km (minutes) on road between the major city centres of Sandnes and Stavanger
University Area, NPD,
R&D activities
Central Stavanger
Central Sandnes
Supply Base & Offices
Risavika / Tananger
Third Largest in Norway
Convention Facilities
Stavanger hosts on an annual basis more than 20 international conferences / congresses and is Norway's third largest venue for these kind of arrangements.
ONS international conference and exhibition is by far the most important for the oil & gas industry.
Key facts:
4 conference halls seating more than 500 participants, the largest with a a capacity of 1800.
A hotel capacity of 2800 rooms.
Labelled most important conference city in Europe for the oil and gas industry
Lower Cost Than Elsewhere In Norway
Real Estate Availability and Costs
Cost for offices and warehouses are among the lowest among in Norway
Offices: NOK 1000-1500 per m2. Other major cities have average prices exceeding NOK 2000.
Warehouses: NOK 400-750 per m2
Office availability is fair and several projects are being planned
Housing
Large and experienced rental market
Forus business
area
Forus business
area
Supply Base & Offices
Supply Base & Offices
University Area, NPD,
R&D activities
University Area, NPD,
R&D activities
Central Stavanger
Central Sandnes
Supply Base & Offices
Supply Base & Offices
Dusavika
Risavika / Tananger
Corporate and Personal Taxation
Personal Taxation
The tax rates for individuals range from 28% to 55,3%.
(Including the employee’s contribution to the Norwegian National Insurance Scheme)
Taxation of Business Profit
Business profits of companies, including capital gains, are subject to a general income tax at a rate of 28%.
Permanent establishment of foreign companies in Norway are taxed at the same rate, 28%.
Value Added Tax, 24% (VAT).
Production Licenses Are Normally Awarded Through Licensing Rounds
The Licensing System
NominationNomination
AnnouncementAnnouncement
ApplicationApplication
NegotiationsNegotiations
Awarding of licensesAwarding of licenses
Two types of oil and gas licenses on the NCS
The Licensing System
A Reconnaissance License grants the holder the right to carry out geological, petrophysical, geophysical, geochemical and geotechnical surveys in a specified geographical area of the NCS
A Production License grants the holders an exclusive right to explore for and produce petroleum within a specified geographical area. The licensees become the owners of the petroleum produced from the field covered by the license
Extensive Regulation With Regard to Health, Safety and the Environment
Health, Safety and Environment (HSE) Regulations
Licensees and other persons engaged in petroleum operations are required to maintain at all times a plan to deal with emergency situations.
The Norwegian Petroleum Directorate has adopted a wide range of regulations that set forth detailed requirements as to the HSE aspects of petroleum operations. In addition, a number of regulations adopted under other acts, such as the Working Environment Act of 1977 and the Pollution Act of 1981, apply.
Violations of such regulations can lead to fines. Holders of licenses under the Petroleum Act are subject to strict statutory liability in respect of losses to damages suffered as a result of pollution caused by spills or discharges of petroleum from petroleum facilities covered by any of our licenses.
Legislation and Regulations Organisations
Labour Regulations and Organisations
NHO
The Confederation of Norwegian Business and Industry
LO
The Norwegian Confederation of Trade Unions
Citizens of the EEA-countries are free to enter Norway and to work here. Citizens of non-EEA countries must apply for entry visas and work permits in order to live and work here. Special attention should be paid in this respect.
The relationship between employer and employee is to a great extent subject to statutory regulations.
Foreign employers should also take note of the national social security system and tax considerations including stock option programs for expats.
National forums Regional Forum and Portals
Cooperation and Networking
OLF – The Norwegian Oil Industry Association
INTSOK – Norwegian Oil and Gas Partners.
TBL - Federation of Norwegian Manufacturing Industries
PIL - Federation of Norwegian Process Industries
KON-KRAFT – New top executive forum led by Ministry of Petroleum and Energy with participants from oil companies, suppliers, trade unions, research institutions and government bodies.
Regional Forums
World Energy Cities – Municipality Cooperation between energy cities around the world
Deep Community
Stavanger Chamber of Commerce
Stavanger Your Quality Partner
Portals
NPF – Norwegian Petroleum Association
Offshore.no Magazine
Scandinavian Oil & Gas Magazine
Research Labs and Institutions Throughout Rogaland
Centres of Research and Development
Business Innovation Climate
RF Rogaland Research
Rogaland Science Park
A new international research center for improved oil recovery is established in Stavanger
Tax rules makes Norway an attractive country for R&D investments for oil & gas companies.
Schlumberger has set up an R&D department employing more than 700.
Private / corporate investments are focused on agri-/aquaculture and energy/petroleum as shown on the map
Growing Population and a High Level of Education
Selected Demographic Developments
Norway has a high educational attainment compared to other OECD-countries.
Approximately 85 % of the population in Norway aged 25 to 64 years had at least completed an upper secondary education in 1999.
The country mean across OECD was 62 %
Workforce Stavanger Region
-20 00040 00060 00080 000
20-44 yrs 45-66 yrs
2002
2015
Half of the Employees in the Oil & Gas Industry Live in the Stavanger Region
0
100 000
200 000300 000400 000
500 000
600 000700 000
800 000900 000
Norway Netherl. Germany France
Top mgmtJunior mgmt.Officers
Wages for Management and Salaried Employees (Kverneland ASA case)
Oil & Gas Employees
(year 2000)
10 000
20 000
30 000
40 000
Rogaland Rest of Norway
Qualified and Available Personell with Reasonable Salaries
Work Force – Size and Salaries
Companies like Baker Hughes, Paladin Resources and Gaz de France express that Norwegian petroleum engineers are both highly qualified and available, and the levels of salaries are competitive. All three have their Norway headquarters in Stavanger.
Schlumberger estimates that a Norwegian researcher cost 1/3 of his American counterpart
The company Kverneland (non-O&G) compared its Norway-based employees with collegues in three other European countries. Result: The compensation is level with or lower in Norway (see illustration)
Average Labour Costs Sickness Absence and Work Stoppages
The average labour costs per full-time equivalent employee in oil and gas extraction and mining were NOK 684 000 in 2000.
Oil & Gas Industry – Some More Workforce Characteristics
Total Labour Costs per Full Time Employee, Oil&Gas
(Annual cost year 2000 of NOK 684.319 NOK)
Taxes deducted
subsidies
11 %
Training costs
2 % Safety and health
0 %
Direct cost incl
salary
69 %
Salaries in kind
8 %
Employers' social
contributions
7 %
Payments for
days not worked*
3 %
Fjords, Beaches and Mountains Offer a Variety of Activities
The Pulpit Rock Is the Most Famous
Recreational Opportunities
70 kilometers of beaches. Some of these are the most suited in Norway for surfing, wind surfing and kite activities.
Tracks and pathways throughout the region.
Nordsjøvegen is one of the main arteries of the region, twisting and turning from sea level to a height of 900 metres.
Sandnes is called the ”Bicycle Town”, city bikes, which are free to borrow, make it fast and easy to visit the city centre.
Mountain ski-areas can In the winter be reached within an hour by car from Stavanger.
Pulpit Rock (see picture) is situated above Lysefjord and Kjerag located at the other side of the same fjord.
Fishing is a popular leisure time activity in the region ranging from sea fishing in the fjords, to salmon or trout fishing in many of the rivers and lakes.
Photo: Rogalandfylkeskommune/ Rogaland Reiseliv
Music, Theatre, Galleries, Museums, Restaurants and Pubs Festivals and Sports
Cultural Opportunities
Concert halls where artists and orchestras from Norway and abroad give concerts.
Stavanger Symphony Orchestra
Music Conservatory
Children’s Music School.
Libraries
Cinemas (films are shown in original version with Norwegian subtitles.)
More than 30 museums and galleries
Nearly 200 restaurants
Large variety of pubs and nightclubs (largely due to 30 years of oil workers influence and the university centre.)
the Gladmat Food Festival, the Blues Festival, the Oil Festival, the Emigration Festival, the Humour Festival and the Kite Festival. (a.o.)
The mountains are a popular area for parachute jumping/paragliding and basejumping.
Several golf courses
Sports and music opportunities for children
Sports-centres and swimming pools
Photo: Sandnes & Sola Golfklubb
A Great Variety of Small and Large Businesses
Major Commercial Centres
Public and Private Services
Health centres and social welfare offices, medical centres, dentists, psychologists, post offices, banks, hairdressers and pharmacies
Local grocery stores and super markets
Several large stores for furniture, toys, food and other.
You can buy sea food directly from the local fishing boat in the harbour close to where you live.
Vegetables and fruits can be bought directly from the farmers during the harvest season.
’Kvadrat’ , the largest shopping centre in Norway, is situated at Forus.
Madlakrossen
Sola
Randaberg
Forus
Sandnes City
Stavanger City
Hillevåg
Major Development Projects and Plans
Urban Development
PastThe foundation of Stavanger and its early
history are closely tied to the history of St.Svithuns Cathedral. The date of the town's foundation has been set to 1125.
The historic town of Stavanger, better known as Gamle Stavanger, is the biggest and best conserved wooden housing settlement in North Europe. UNESCO has placed it on the list of human patronage.
PresentMajor residencial, commercial and office
locations are spread around the area, mainly on a north-south axis with Forus as the major business area.
Public and private development projects are currently being processed for several areas along the north-south axis and in Tananger/Risavika in the west to residencial areas in Sandnes to the south and east.
Residencial
Commercial
Hundvågand Buøy
Stavanger:City & East
Hommersåk
Vatne etc.
Bogafjell & Vedafjell
Smeaheia
Forus
Tananger /Risavika
Jaatun
Hinna
Paradis
HillevågUniversity area
Sandnes City
Sola
Past and Present
A Peaceful Country
Security and Crime
Norway is a comparatively peaceful country, with fewer cases of homicide and armed robberies. Oslo is in that respect among the safest capitals of the western world.
The degree of lesser serious crimes is more like the European average.
Norway is a rich country and has more reported crimes like thefts, car thefts and burglaries than the European average, but less than countries like Denmark, Sweden, Germany, France, Italy, UK, Canada and the USA.
Norway has considerably fewer prisoners than the European average and only 1/10 compared to the USA (per 100.000 inhabitants).
The illustration shows some crime rates in the largest counties (Oslo/Akershus, Rogaland includes Stavanger, Hordaland includes Bergen, Sør-Trøndelag includes Trondheim)
Offences reported to the police, by group of offence and county. (Per 1000 population, year 2000)
-
20
40
60
80
100
120
140
Offencesfor profit(theft etc)
Offencesof
violence
Sexualoffences
Offencesof
narcotics
Damageto
property
Oslo
Akershus
Rogaland
Hordaland
Sør-Tr.lag
Regional ServicesA Well-developed National Health Service
The main hospital in the region is ‘Sentralsykehuset i Rogaland’. Patients may however choose any other Norwegian hospital.
The general practitioner service is well established in Norway
Everyone who wishes it is offered a permanent general practitioner to go to.
Private medical centres operate independently from the public health service.
An increasing number of private centres offer alternative treatment.
Healthcare
Extensive health services and a well-developed social safety net.
All residents have a right to economic assistance and other forms of community support during illness, old age or unemployment.
All employed persons have a right to sick pay from the first day of absence.
Treatment during hospitalisation is free of charge and children receive free medical and dental care in school.
Ca. 4000 Resident Foreigners Are Working in the Oil & Gas Industry
The International Community
The petroleum business has influenced the region since the early 70’s
The international organisations in the district are many; the International Cultural Centre; Petroleum Wives’ Club; Stavanger International Rotary Club for Business People (English speaking); US in Norway; Stavanger Partner Information (SPIN); Asociacion Hispano-Noruega, Centre Culturel Franco-Norvegien amongst others.
The International School of Stavanger is the largest of its kind in Europe with more than 500 students
Great amount of different religious communities with their own places of worship
Photo: Sverre G. Hauge
For Children and Adults University Studies
Educational Opportunities
Well developed primary and lower secondary education system
Variety of further education options, also at college level.
The Norwegian educational system covers the age groups 6-12 years (primary school), 12-15 years (lower secondary school) and 16-19 (upper secondary school / high school).
The largest International School in Europe (500 students),
French, British and Dutch schools.
Primary schools offer teaching in 52 languages.
The University Centre in Stavanger, offers petrochemical subjects among other.
The Norwegian School of Management BI offers master programmes in economics and marketing.
Folkeuniversitetet Adult Education Association provides adult education at college and university level.
Mild Winters, Cool Summers
Weather and Climate
The coastal districts in Norway have a temparate marine climate with mild winters and relatively cool summers.
Because of the Gulf Stream, the coast and harbours on the west coast usually are free from ice during the winter.
The average rainfall for the Stavanger district is 46 inches (1180 mm) per year.
Temperatures are fairly stable, varying between 32 and 60 degrees Fahrenheit (0-15 degrees Celsius).
Spring comes early. April and May are beautiful months with strong spring sun and dry spells. The warmest months are usually July and August.
The average temperatures for January and February are usually just above freezing. Snow does occur however.
-30
-20
-10
0
10
20
30
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
Oslo Max Temp Stavanger Max TempAberdeen Max Temp Oslo Min TempStavanger Min Temp Aberdeen Min Temp
-
20
40
60
80
100
120
140
160
180
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
Oslo
Stavanger
Aberdeen, Scotland
Average temperatures (oC)
Average rainfall (mm)
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