Norwegian Oil Research Articles

Multivariate ocean waves dynamics in North Sea and Norwegian Sea by Gaidai reliability method

Current study presents state-of-the-art approach for evaluating spatiotemporal multivariate environmental risks, especially suitable for complex environmental systems that have been either numerically simulated or physically observed. Advocated methodology provides accurate hazard risk forecasts, based on real-time in situ environmental data. Design of offshore structures requires multivariate risk assessment – offshore and naval operations require both short- and long-term risk and reliability analyses. Contemporary risk evaluation techniques often struggle with raw timeseries multivariate data due to intrinsic multidimensionality and nonlinear interconnections among critical system’s dimensions/components. In the current study effectiveness of the Gaidai multivariate risk evaluation method is illustrated by utilizing significant wave heights dataset, measured within two offshore zones: Heidrun and Troll Norwegian oil fields. Analyzing offshore waves being particularly challenging due to their complexity, high nonlinearity, multidimensionality, yet dynamic inter-correlations. Global warming being among several significant factors, affecting ocean and sea wave heights. For naval, offshore and marine structures operating in harsh weather conditions, robust multivariate environmental risk evaluation methods being crucial for both design and safe operations. Current study aims to validate and benchmark state-of-the-art methodology, enabling extraction. Advocated approach allows for efficient yet accurate assessment of global damages, failures or hazard risks for a wide range of complex nonlinear multivariate environmental and energy systems. Primary advantage of presented multivariate reliability methodology lies within its ability to treat complex systems with practically unlimited number of dimensions, while existing reliability methods being mostly limited to univariate and bivariate analyses.

Greening from within: the role of organisational purpose shift in building internal legitimacy for fossil fuel incumbents’ green innovation

ABSTRACT Green innovation that reduces harmful emissions and impacts on the natural environment is crucial in combatting the climate crisis. Yet, incumbents in carbon-intensive industries struggle with its development due to their lack of organisational commitment. We investigate how fossil fuel incumbents can overcome this obstacle and build internal legitimacy for green innovation. Through a longitudinal case study of a Norwegian oil major over 20 years, we highlight the important role of organisational purpose shift. We derive a process model of how fossil fuel incumbents can shift from a goal-based organisational purpose focused on profitability towards a duty-based purpose connected to sustainability-oriented values, building internal legitimacy for green innovation. Our study also demonstrates that organisational purpose shift, when only selectively and gradually realised, impedes full decarbonisation. We contribute to the literature on innovation studies by discussing how organisational purpose shift and internal legitimacy can enhance sustainable innovation in fossil fuel incumbents.

Governing as valuing: Assetization and the making of the Norwegian oil fund

Recent scholarship has highlighted ‘assetization’ as an increasingly prevalent process in which valuation practices from financial economics are imposed on new aspects of society. This paper analyses the establishment of the Norwegian ‘oil fund’ – currently the world’s largest sovereign wealth fund – as the outcome of such a process. It traces the shift in the Norwegian government’s valuation arrangements from valuing oil as ‘activity’ in the 1970s towards valuing oil as a ‘national asset’ from the mid-1980s, and shows how this shift happened through close exchanges between economic expertise and governmental procedures. The paper contributes to understanding assetization as a mode of governing by showing both how it happens through governmental tools and practices and how it can have direct material consequences. In the case of Norwegian oil, the introduction of new tools of valuation made the Norwegian government manage the oil resource in a new way, and led to a re-timing of the pace of its extraction. The outcome was speeding up the conversion of oil into financial holdings, and the establishment of the ‘oil fund’ as a new infrastructure for handling oil as a national asset.

Transition from fossil fuels to renewable energy: Identifying the necessary dynamic capabilities for a transition among Norwegian oil and gas companies

AbstractThe increasing awareness of the role of fossil fuels in global warming, fluctuating oil and gas prices, and governments' commitments to phase out fossil fuels are driving the Norwegian oil and gas industry to increasingly aim for a transition to more sustainable renewable energy. There are few studies investigating how highly emission‐intensive oil and gas firms can transition into greener industries. In this multiple‐case study, we investigate how these firms can develop green innovations and enter renewable industries by developing dynamic capabilities. We find several microfoundations of dynamic capabilities that are important for green innovation development. Expanding the search window and proactive behavior are key for identifying new opportunities, while developing market insight, cross‐sector collaboration, and structural ambidexterity are crucial to seize and reconfigure opportunities. The findings also illuminate how firm strategy in the sensing stage impacts what opportunities firms seize. The study is one of few studies that explore the microfoundations of dynamic capabilities necessary for entering new and unfamiliar markets, and it contributes to the understanding of the dynamics of the underlying microfoundations and the impact of green innovation type on these dynamics.

Tales and theories as levers of expert influence: A case study of the Norwegian Oil Fund

Abstract The power of economists in policymaking is widely recognized by both scholars and political actors. While the literature on expert influence has primarily focused on the intellectual features of expert arguments, we argue that economists’ strategic use of framing and normative reasoning wields more influence in policymaking than is acknowledged by current scholarship. Through a comprehensive investigation into the institutionalization of the Norwegian Oil Fund and its associated fiscal regime, drawing on 26 elite interviews with key political and technocratic actors, we unveil the considerable influence of state economists in shaping the policy for managing petroleum wealth. These economists not only played a crucial role in legitimizing and lending credibility to the new policy but also employed strategic framing as a reinforcing mechanism to sustain the policy regime, illustrating the essential role of economists as storytellers. Hence, we suggest including strategic framing as a conceptual element within the theoretical framework of expert influence.

Comparison of Asset Management Practices in Norwegian Oil & Gas and Road Infrastructure: Results from Industry Survey

Comparison of Asset Management Practices in Norwegian Oil & Gas and Road Infrastructure: Results from Industry Survey

Advancing the multiple streams framework for decision-making: the case of integrating ethics into the Norwegian oil fund strategy

This article applies a modified Multiple Streams Framework (MSF) to an in-depth case study of the contentious issue of integrating ethics into the Norwegian oil fund strategy. By exploring how ethical investment guidelines evolved from a discredited and allegedly unrealistic idea into policy consensus and, ultimately, a global exemplar, the study contributes to the literature in two ways. First, it contributes to the ongoing theoretical refinement of the MSF perspective by illustrating how the framework proves valuable in examining both agenda-setting and decision-making processes. Specifically, it confirms the relevance of a two-phase model for a more rigorous analysis of the decision-making process. Second, while prior literature defines the output of agenda-setting as a ready proposal, it is demonstrated that this outcome may not necessarily signify a fully developed policy proposal. To account for a broader range of scenarios, this article suggests redefining the output of the agenda-setting process as a policy commitment, rather than a worked-out proposal ready for negotiations in the political stream. Acknowledging the uncertainty and ambiguity in the decision-making process highlights the significance of developments in the problem and policy streams that past literature has not given due attention. Consequently, the article proposes a revised two-phase model to enhance the conceptualisation of decision-making within the MSF.

Plant Operator Support using Industrial Artificial Intelligence

Despite the high degree of automation in industrial control systems, human operators in industrial plants play a critical role in ensuring uptime, production quality, and safety. Plant operators do so by not only monitoring the process but also intervening when the process runs into unusual or exception situations. In this paper, we present to ensure smooth plant operation by automatically identifying and investigating potential upcoming issues as well as providing recommendations to plant operators on how to address them with confidence. This is achieved by applying Artificial Intelligence (AI) techniques including deep learning, process mining, and graph search, on historical industrial process data such as alarm and event data, audit trails, engineering documents, and safety procedures. Our solution has been validated on data from the Draugen oil field operated by the Norwegian oil and gas company, OKEA.

Long-term observations (2014–2020) of level ice draft, keel depth and ridge frequency in the Barents Sea

Results from consistent long-term observations of sea ice draft by upward looking sonars at five sites in the Barents Sea during the period 2014–2020 are presented. The recordings were initiated by the Barents Sea Metocean and Ice Network (BaSMIN) with the objective to provide data for design of offshore structures in Norwegian oil and gas license areas. Sea ice imported from the Arctic Ocean, ocean heat of Atlantic origin as well as dynamic deformation contribute to spatial and temporal variability in drafts. The average draft of locally grown level ice at the end of winter is approximately 0.6 m. Reflecting a decreasing trend in ocean temperatures at the observation site, the timeseries of locally grown level ice draft exhibits an increasing trend during the observation period of approximately 5 cm per year. During events of sea ice drifting in from the north, the level ice draft reaches up to 1.5–1.8 m. Keels deeper than 2.5 m have an average keel depth of 3.8 m. The 99th percentile keel depth is 9.4 m, while the deepest keels protrude down to nearly 20 m. The average ridge frequency is 3.6 ridges/km, with a corresponding 99th percentile of 25 ridges/km. Sea ice on Spitsbergenbanken has deeper keels and larger frequency of ridges than sea ice on Storbanken at the northern end of the Hopen Trench. We hypothesize that more vigorous currents with convergence and shear on the shallower Spitsbergenbanken contribute to this geographical difference.

Accountability for responsibility: a case study of a more intelligent enactment of accountability

PurposeThe purpose of this paper is to explore how hierarchical accountability can be enacted and accounting control systems mobilized in a way that promotes a sense of felt responsibility.Design/methodology/approachThe paper draws on interviews, shadowing and observations to explore the implementation of a strategy for “increasing accountability” in a Norwegian Oil Company. The case provided an opportunity to explore the dynamics of hierarchical accountability and felt responsibility, and in particular Roberts (2009) concept of “intelligent accountability”, in an empirical context.FindingsThe case study explores how the strategy of increasing accountability at OilCo was enacted around three operational issues; the control of costs, roles and relationships in the complex matrix structure, and the operation of the management system. It traces how the long history of Beyond Budgeting practices and philosophy in OilCo resulted both in an explicit recognition of the incompleteness of accounting numbers, and trust-based practices which avoided many of the dysfunctional individual and organizational effects typically associated with the exercise of hierarchical control.Originality/valueThe paper explores empirically how OilCo’s embrace of Beyond Budgeting practices and philosophy had created the conditions under which a more intelligent form of accountability could emerge. As a European case study, it calls into question the Anglo-American tradition of accounting research which suggests that externally imposed accountability within a hierarchy mitigates against employees’ felt responsibility.

We’re in the middle of it: Consultants' role in risk management in the Norwegian petroleum sector

Most risk management research focuses on owner/operators and regulators, and ignores other actors. Preventing major accidents in the offshore oil and gas sector is a key responsibility of the companies that own and operate the infrastructure. Regulatory oversight of their activities comes in the form of industry-specific goal-based regulation administered by a specialist regulatory agency. In this paper we focus on a third actor in the system – the consultants who provide specialist services regarding safety and risk.Our study draws on interviews with experienced consultants in the Norwegian oil and gas sector (n = 11, average experience 20+ years). Power’s concept of riskwork is used to examine how consultants interact with their clients and how they see their role in relation to risk management. The analysis shows that the role of experienced consultants goes well beyond metaphor of the fox guarding the hen house. Rather, consultants contribute to regulatory compliance on the part of their clients but, further, they try to positively influence decision makers beyond simple compliance in order to promote what they believe to be the best safety decision making.The paper argues that consultants’ role in the system is under examined and under theorized. Alongside earlier research, our study indicates that consultants play a big role in risk management, which should be both recognized and scrutinized.

On the Exchange Rate Dynamics of the Norwegian Krone

Global energy production is undergoing a transition from fossils to renewables. At the same time, the Norwegian Oil Fund has grown exponentially in size and is now a major global investor. These events in combination are likely to impact the dynamics of the Norwegian krone. Concurrently, the persistent weakening of the Norwegian krone (NOK), hitting record low exchange rates against the major currencies, is sparking national and international interest. Using updated data, we find that oil prices and global asset prices are both important drivers of EURNOK returns. However, we find that the relative importance changed following the 2015 oil price decline, whereafter asset prices became more significant. Furthermore, we observe an impact of investor risk aversion, suggesting that the krone is no longer a safe-haven currency.

“State of happiness”? Petroreligion and petromelancholia in Norway

ABSTRACTThis article discusses the intersection between the symbol systems of petroculture and religion in development of the Norwegian oil age. The public TV series State of Happiness (2018‐now) dramatizes Norway's adventure with oil and gas, beginning in 1969. Drawing parallels to Darren Dochuk's work on the mutual construction of petroculture and American religion in Anointed with Oil, this essay argues that State of Happiness retells the story of Norway's adventure with oil framed by some in terms of salvation, as a blessing and as the arrival of a better, messianic age. The characters in the series negotiate their religious commitments with the enchantments of the emerging petroculture in the Stavanger region, engaging the themes of Advent, Christmas, Baptism, and Trinity.

Improving the Recovery of Hydrocarbons in a Well in the Gullfaks Field by Injecting Sequestrated CO2

The Gullfaks field was discovered in 1978 in the Tampen area of the North Sea and it is one of the largest Norwegian oil fields located in Block 34/10 along the western flank of the Viking Graben in the northern North Sea. The Gullfaks field came on stream in 1986 and reached a peak of production in 2001. After some years, a decrease in production was noticed due to the decrease in pressure in the well. The goal of this paper is to improve the production of a well located in Gullfaks field by injecting CO2 through coiled tubing. The use of the CO2 injection method is due to the fact that it is a greenhouse gas, and its production in the atmosphere contributes to global warming. It is important to reduce its emission into the atmosphere and to boost the production of oil in the well. The CO2 is injected through the coil tubing to lighten the hydrostatic column and allow the fluid to move from the tubing to the surface. The completion and PVT data are processed in Pipesim and Prosper softwares. By integrating a number of calculations by using the nodal analysis methods and gas injection methods, the results obtained show that the well is not producing and by injecting sequestrated CO2 at the flow rate of 1.482 MMScft/d with an injection pressure of 2500 psig, the oil flow rate provided by the coiled tubing gas injection is 900 Stb/d. The profitability of the project is achieved over a period of 20 years with a net present value (NPV) of $11948858.5 and a return on investment after 5 years 2 weeks.

The role of power and future resources in the institutionalisation of the Norwegian oil economy

Low-carbon transitions involve profound economic and social change. Recent research on socioeconomic transitions has highlighted the need for a more nuanced conceptualisation of power and agency within these processes. In this article, we expand our understanding of the role of power in socioeconomic transitions by critically applying the Power in Transition framework (POINT) to a multilevel perspective (MLP) analysis of the establishment of the Norwegian oil fund and the associated fiscal policy. The empirical data stem from in-depth elite interviews with key political and technocratic agents who were active at the national level over a fifteen-year timespan. We find that control over the allocation of future resources was key in the creation and protection of the Norwegian fossil fuel-based economic regime. Consequently, we extend the concept of transformative power to include control over structures and institutions arbitrating the distribution of future resources, illustrating the critical role of this control in determining regime stability. We conclude that political agents who foster sustainability transitions should prioritise efforts aimed at contesting the control over and allocation of future resources.

Maturity Assessment of Industry 4.0 Implementation in Kazakhstani and Norwegian Oil and Gas Contexts

The present industrial revolution in modern history, called Industry 4.0, completely changes the vision and processes of modern production and makes it more efficient, high quality, and potentially more profitable. The spreading of Industry 4.0 across all industries did not leave behind the oil and gas sector. More developed countries such as Norway, where the oil and gas industry plays a crucial role, have already initiated Industry 4.0 transformation and progressing toward achieving higher maturity levels. At the same time, developing countries such as Kazakhstan, where the oil and gas sector is also one of the most important industries, make their initial attempts towards Industry 4.0 but in a more cut-rate way. Therefore, this study aimed to conduct a maturity assessment of the oil and gas sectors of two countries, through a new Industry 4.0 readiness assessment model (RAM), developed exclusively for oil and gas companies. As a result, the model helped to identify the current maturity level of enterprises, strengths and weaknesses, and pinpoint country-specific patterns. Although the research focuses primarily on the upstream sector, the developed model and research results can also be extended to address the needs of the midstream and downstream sectors.

A stochastic study of carbon emission reduction from electrification and interconnecting cable utilization. The Norway and Germany case

We analyse how carbon emissions are reduced utilizing the new NordLink cable between Norway and Germany, taking policy plans of platform electrification in Norway into account. Building a stochastic model based on existing data for Norwegian and German electricity production and demand (Open Power system data, 2020) to account for uncertainty, we found that the cable can be used as an effective way to reduce German emissions by exporting German renewable surplus production on windy days to Norway and importing from Norway other days. We found that such flow of power will lead to a possible reduction of the countries’ total emissions by over 4.1 million tons CO2 annually. Based on a mean reduction of German CO2 emissions of about 710 g/kWh by electricity imported from Norway, we found that electrification of the Norwegian oil and gas extraction is inferior to an increased export to Germany in terms of total emission reduction, as electrification only gives a reduction of about 425 g/kWh according to numbers from the Norwegian Oil Directorate (Oljedirektoratet, 2020). A similar calculation assuming a realistic full electrification of the platforms only gave a reduction of 2.4 million tons CO2 annually. In the long term, we conclude that combining both approaches makes the best use of Norwegian surplus energy production in view of carbon emission reduction.

Assessing blockchain technology adoption in the Norwegian oil and gas industry using Bayesian Best Worst Method

Despite the promising features of blockchain, such as enhancing efficiency, transparency, immutability, cost savings, and traceability, the technology is still not widely adopted across industries. The oil and gas industry uses state-of-the-art engineering solutions for oil and gas exploration but substantially lags behind in using innovative digital technologies that can improve operational excellence. This study proposes a multi-criteria decision-making (MCDM) framework for assessing blockchain adoption strategies. The framework builds on critical factors for blockchain adoption and four adoption strategies — single use, localization, substitution, and transformation. Data were collected from ten experts in the Norwegian oil and gas industry using a structured web survey. The Bayesian Best Worst Method (BWM), a probabilistic MCDM method, was used for analysis. The results suggest that three sub-criteria, which are lack of expertise about technology, lack of supply chain partner collaboration, and reducing operation cost, have the most impact on the adoption process. As for blockchain adoption alternatives, the fourth phase, that is, transformation, is the most preferred in the context of the Norwegian oil and gas industry. The proposed framework lays the foundation for companies to understand the critical elements that need improvement to accelerate the blockchain technology adoption process.

Analysis of sources of assets of the national fund of Kazakhstan and assessment of its efficiency

The article examines the assets of the national fund of Kazakhstan and its dynamics from 2005 to 2020, analyzes the sources of its formation and evaluates the effectiveness of the use of assets. The main sources for the formation of the fund’s assets are direct taxes from organizations in the oil sector and investment income from management. Since 2016, the funds of the national fund in the form of aggregate transfers have already been used and directed to support the country’s economy in the face of an unfavorable price environment for commodities. To assess the performance of the fund and its effectiveness from 2001 to 2020, we calculated such indicators as accumulated profitability, arithmetic and geometric mean returns, portfolio standard deviation, variation coefficient, average risk premium, Sharpe ratio. The key indicators of risk and return of the fund’s foreign exchange portfolio are also compared with the indicators of the Norwegian oil fund. As a result of the comparison, valuable recommendations and conclusions were made on the structure of the fund’s portfolio. The Fund needs to gradually increase the share of investments in risky financial instruments such as shares of foreign companies in order to increase the overall return of the fund. The total transfers of the fund in relation to GDP for the last 10 years have been estimated and the forecast for the size of the fund at the end of 2022 has been made. The size of the fund is still at a sufficient level and is a reliable safety cushion for the economy of Kazakhstan during periods of adverse external factors

Human Rights and Sustainability vis-à-vis the Norwegian Oil Industry: An Early Assessment of Greenpeace Nordic and Others against Norway

Human Rights and Sustainability vis-à-vis the Norwegian Oil Industry: An Early Assessment of Greenpeace Nordic and Others against Norway