Brown & Root + Aker = Brownaker

Brownaker had been established as a joint venture by America’s Brown & Root and Norway’s Aker group. This meant that the two partners controlled the enterprise together, invested equal amounts of capital and shared costs and profits equally.

The collaboration was not intended to endure, but had been established for the Statfjord A job. Brownaker also had certain contracts on Ekofisk and Eldfisk.[REMOVE]Fotnote: Interview with Jens Petter Egeland by Trude Meland, Norwegian Petroleum Museum, 2 September 2011.

Brown & Root

Brown & Root was a multinational contractor owned by Halliburton Company, with its head office in Houston and branches in many parts of the world. In addition to a number of contracting subsidiaries, it owned companies whose only job was to secure cheap labour for hire to other Brown & Root members.

The group had established a presence in Norway in early 1970 to participate in the development of Ekofisk, and was eventually represented by several companies – Brown & Root NV (Netherlands Antilles), Brown & Root Norge and finally Brownaker.[REMOVE]Fotnote: Ryggvik, Smith-Solbakken, Gullvåg, Smith-Solbakken, Marie, Gullvåg, Else Wiker, & Norsk petroleumsforening. (1997). Blod, svette og olje (Vol. 3). Oslo: Ad notam Gyldendal: 111.

In addition, Brown & Root had a subsidiary – Brown & Root Employment Services – in the well-known tax haven of Jersey in the English Channel. Its job was to hire personnel for the parent company’s many enterprises around the world. However, only senior staff and certain key personnel were employed directly by the Jersey company.

The first contract secured by Brown & Root for the Statfjord A development covered engineering design and management of the loading buoy, flare and flowlines. This was awarded in September 1975.[REMOVE]Fotnote: Moe, J. (1980). Kostnadsanalysen norsk kontinentalsokkel : Rapport fra styringsgruppen oppnevnt ved kongelig resolusjon av 16. mars 1979 : Rapporten avgitt til Olje- og energidepartementet 29. april 1980 : 2 : Utbyggingsprosjektene på norsk sokkel (Vol. 2). Oslo: [Olje- og energidepartementet]: 182.

Three months later, it also took over planning, management and execution (engineering design and project management) for the offshore hook-up work from Matthew Hall Engineering, which had done an inadequate job on the topside outfitting and thereby lost its contract.[REMOVE]Fotnote: Read more under building the topside at Stord Verft.

Operator Mobil regarded Brown & Root as the best qualified company, and awarded the latter job without competitive tendering.[REMOVE]Fotnote: Moe, J. (1980). Kostnadsanalysen norsk kontinentalsokkel : Rapport fra styringsgruppen oppnevnt ved kongelig resolusjon av 16. mars 1979 : Rapporten avgitt til Olje- og energidepartementet 29. april 1980 : 2 : Utbyggingsprosjektene på norsk sokkel (Vol. 2). Oslo: [Olje- og energidepartementet]: 156. Brown & Root had been offered the same contract earlier, but had turned it down because its order book was full. The company now had spare capacity after completing work on the UK continental shelf.

On Mobil’s behalf, Brown & Root administered a number of sub-contractors – including its own subsidiaries. This meant that it was both the main contractor with responsibility for selecting and checking sub-contractors, and a sub-contractor through its own subsidiaries.

A contract was namely awarded to Brown & Root NV covering the hire of labour and equipment for the offshore work. This “personnel resource” assignment was also placed without competitive tendering, but Brown & Root guaranteed its subsidiary’s performance.

Brown & Root’s possession of two big contracts came in for criticism from various quarters, including several licensees who took the view that the US group had become responsible for planning and construction as well as checking and approving its own work, estimates and costs.[REMOVE]Fotnote: Hanisch, T., Nerheim, G., & Norsk petroleumsforening. (1992). Fra vantro til overmot? (Vol. 1). Oslo: Leseselskapet. A number of critics maintained that this was a case of setting a fox to keep the geese.

Only peripheral mention was made of the nature and scope of the work in the contracts with Brown & Root, while planning and coordination of materials and equipment were not mentioned at all. The text contained vague formulations that the company should use Norwegian goods and services to the extent that these were competitive, but this was not made obligatory.

One intention was that Brown & Root should invite tenders for electrical installation and instrumentation from Norwegian firms, but the company maintained that this would complicate project management.

A number of companies in Norway reacted when it appeared that the contracts would not be going to a domestic bidder. They contacted Statoil, who put pressure in turn on Mobil.

The latter got in touch with Brown & Root, and the outcome was that the electrical installation job went to a Norwegian joint venture called Elcon, with Siemens Norge A/S as the responsible main contractor and coordinator.[REMOVE]Fotnote: Hanisch, T., Nerheim, G., & Norsk petroleumsforening. (1992). Fra vantro til overmot? (Vol. 1). Oslo: Leseselskapet: 396. The other partners were Nebb A/S and Asea A/S in Oslo, Stord Elektro A/S, and Sønnico A/S.  The instrumentation contract went to Spec A/S in Oslo.

Aker

The Aker group had been involved in the construction of Statfjord A from the start. Through Aker Offshore Contractors (AOC), it was responsible for mechanical outfitting of the shafts in the concrete gravity base structure (GBS). Aker’s Stord Verft yard south of Bergen was responsible for building the topside.[REMOVE]Fotnote: The Aker group was owned 50 per cent by Fred Olsen, who therefore had a 25 per cent holding in Brownaker.

Aker was accordingly dissatisfied that the contract for the offshore work went to Brown & Root NV, and felt itself bypassed. In addition to experience with the platform itself, the group felt that it had expertise in offshore working after the construction of the A platform for Britain’s Beryl field.

It argued that a domestic company would be better able to comply with Norwegian practice on the division of work, planning and labour relations. While accepting that Brown & Root had great experience with this type of job, Aker maintained that the US group had little understanding of Norwegian working life and unions.

Pressure was brought to bear by Aker on both the government and Statoil, as the biggest Statfjord licensee, to secure acceptance of a greater Norwegian involvement in the development. That led in turn to discussions between the group and Brown & Root during the autumn of 1976, and the creation of the joint venture.

Brownaker Offshore A/S was established in Stavanger during January 1977.[REMOVE]Fotnote: Moe, J. (1980). Kostnadsanalysen norsk kontinentalsokkel : Rapport fra styringsgruppen oppnevnt ved kongelig resolusjon av 16. mars 1979 : Rapporten avgitt til Olje- og energidepartementet 29. april 1980 : 2 : Utbyggingsprosjektene på norsk sokkel (Vol. 2). Oslo: [Olje- og energidepartementet]: 184. Negotiations on a possible takeover of the contract held by Brown & Root NV were initiated that spring.

Brownaker

It took time to achieve this transfer. Mobil sent a completed contract for signature to Brownaker on 22 July 1977. This was identical with the agreement held by Brown & Root NV. Brownaker responded that it wanted wider responsibility than was prescribed in the original contract. A new agreement was not signed until April 1978, almost a year after offshore work had begun on Statfjord A.

At times, Brownaker had up to 1 000 personnel simultaneously engaged on installation activities out on the A platform. Because of tour and shift arrangements, 2.5 workers were needed for each job. This meant that the total workforce employed by the joint venture came to 2 500 people.[REMOVE]Fotnote: Moe, J. (1980). Kostnadsanalysen norsk kontinentalsokkel : Rapport fra styringsgruppen oppnevnt ved kongelig resolusjon av 16. mars 1979 : Rapporten avgitt til Olje- og energidepartementet 29. april 1980 : 2 : Utbyggingsprosjektene på norsk sokkel (Vol. 2). Oslo: [Olje- og energidepartementet]: 184. According to the contract, half of these would be drawn from the Aker group and the rest from Brown & Root.

Few people were employed directly by Brownaker. The workforce was derived from subsidiaries or sub-contractors to Brown & Root and from Aker companies. Those who came from the latter were employed by their respective Aker subsidiary – such as Aker Verdal, Tangen Verft and Akers Mekaniske Verksted in Oslo – and were hired out to Brownaker.

Each Aker company had a quota agreement for how many skilled workers of various kinds it would supply to Brownaker at any given time. The companies could not always fill this quota from their own workforce, and were forced to send people they had hired in their turn. If the Aker companies failed to secure enough people, Brownaker filled up the missing numbers itself by hiring people from small companies around Norway.

Brown & Root’s share of the workforce was provided along much the same lines. All electricians on Statfjord were actually sub-contractors to Brown & Root through the Elcon joint venture. Workers in the electrical department were Brownaker personnel, but were employed by the “parent company” and thereby hired in. Brown & Root personnel who worked for Brownaker were regarded formally as sub-contractors to the latter, like the Aker companies.

Many of the workers on Statfjord hailed from Spain, Portugal or Mexico. They were not part of the Brownaker labour force, but were hired directly by Brown & Root through its Brown & Root NV subsidiary. Crew on Atlas I, Brown & Root’s own crane ship which lay on Statfjord during the first summer to lift modules on board, were employed in Panama under that country’s liberal legislation.
Engineers, administrators and technical specialists were largely Britons employed by Brown & Root UK Ltd. Foremen consisted primarily of Americans employed by the parent company and hired out to Brownaker, but they formed a small and exclusive minority.

Brownaker was divided into a number of departments covering the various specialities. Each was headed by a general foreman who reported to an assistant superintendent. The latter was subordinate in turn to the superintendent, Brownaker’s overall boss on the platform. The departments comprised a number of work gangs of 10-12 people, each headed by a foreman.

Brownaker’s work organisation was led by the Brown & Root project management, which comprised engineers from various technical disciplines and was subordinate to Mobil’s development department for Statfjord A.[REMOVE]Fotnote: Godø, H. (1980). Plattformutbygging til havs (Vol. Nr 11-1980, Sosialdepartementets sammendragsserie (rapportsammendrag : trykt utg.)). Oslo: Sosialdepartementet: 72.

In other words, work on the platform was organised in a highly complex manner based a very hierarchical model. It was managed through an extensive system of contracts, with a detailed division of labour. The organisation was built up in such a way that each position was given specific assignments, rights and duties.