Organisation of the construction projects

person by Trude Meland, Norwegian Petroleum Museum
Developing the Statfjord field was a complex business. A solid organisational structure was needed to handle the many elements which were to function as a unit and the many equity interests involved.
— Statfjord B's concrete gravity base structure (GBS) in Gandsfjorden. Photo: Øyvind Hagen/Equinor
© Norsk Oljemuseum

The formal organisation comprised two groups with differing influence and interests. One was the licensee partnership, which exercised ultimate control, and the other was Mobil as the operator and thereby responsible for development and operation of the field.

Preliminary development plan

As soon as the discovery had been declared commercial, the Statfjord licensees drew up a preliminary development plan which was submitted to the Ministry of Industry on 24 September 1974. This proposed a staged process.

Mobile prepared extensive supporting materials. Submitted to the Norwegian Petroleum Directorate in December of the same year, these comprised reservoir and financial studies, studies of landfall options, and production, drilling and pipelaying plans.

Licensees

The ultimate authority in the Statfjord development project was the Statfjord Unit Operating Committee (SUOC). This comprised the licensees, with Statoil as the largest, Mobil as the operator, and Norske Conoco, Esso Exploration, Norske Shell, Saga Petroleum, Amoco, Amerada, Texas Eastern, Conoco North Sea, Gulf Oil Corporation, Gulf UK and the British National Oil Corporation.

Voting rights matched each partner’s share of the field, and a valid decision by the SUOC required at least 70 per cent support. With a 44 per cent holding, Statoil could block all decision.[REMOVE]Fotnote: Rolstadås, Asbjørn, Prosjektstyring, Trondheim 1981, p. 103.

The operator was subject to the SUOC, and formally had no greater influence than its share of the licence prescribed. In reality, however, its power was greater because it controlled the means for conducting studies and because it normally moved proposals for decision. This meant, in other words, that Mobil ran the project in practice and was also chair of the SUOC.[REMOVE]Fotnote: Lavik, Håkon. Statfjord. The largest oil field in the North Sea . Stavanger 1997, p 41. 

Before the SUOC was established in 1976, a licence 037 committee established by the Norwegian licensees was the informal decision-making body. Soon after the discovery had been declared commercial and this committee had been appointed, it became clear that Statfjord extended into UK block 211 where Conoco North Sea Inc was operator.

Work was accordingly initiated on a unitisation agreement between the Norwegian and British licensees, and on a UK-Norwegian treaty for exploiting the discovery. An informal meeting was organised in late 1974 between the licensees on both sides of the boundary, which discussed a unitisation agreement. This resulted in an agreement on exchanging well and seismic data, which was signed in May 1975.

The first formal meeting between the British and Norwegian partners in August 1975 resulted in the formation of a licensees’ committee as the ultimate authority for the unitisation work. It comprised the Norwegian licensees, with the UK partners given observer status. Each licensee had a member and alternate.

Phase I development plan

Construction of the Statfjord A platform began as early as October 1974 with the casting of the bottom section of the concrete gravity base structure (GBS) at Hinnavågen south of Stavanger.

Work continued simultaneously on a full development plan for the Statfjord field. This was submitted to the Ministry of Industry in January 1976, and formed the basis for White Paper no 80 (1981-82).[REMOVE]Fotnote: The plans formed the basis for White Paper no 90 (1975-76). Three platforms were proposed, with the B installation due for tow-out in 1979 and Statfjord C in 1980.

The final British-Norwegian agreement on a unitisation of Statfjord was signed on 17 June 1976, with the SUOC established simultaneously as the ultimate decision-making authority. This gave the UK licensees a vote on the same basis as the Norwegians, and all the partners had an influence which corresponded to their share of the field.[REMOVE]Fotnote: White Paper no 80 (1981-82). Om Kostnadsanalysen, Norsk Kontinentalsokkel.

Licensee holdings in Statfjord

In order to investigate and consider special issues which arose during the Statfjord development, the SUOC appointed a number of permanent and ad hoc sub-committees in which either all or only some of the licensees were represented.

These bodies conducted technical discussions but did not normally take decisions. They merely submitted recommendations to the SUOC, which decided. Nor did they have any formal organisational association with the licensees, but were affiliated with the operator’s project task force (PFT).

There were 10-12 more or less permanent sub-committees, with the Statfjord field engineering committee playing a key role. This met once a month and utilised a sub-committee of its own for geology and geophysics as well as a number of ad hoc bodies appointed as and when required.[REMOVE]Fotnote: Kostnadsanalysen norsk kontinentalsokkel 1980

In addition came a separate audit committee, on which all the licensees were represented, to monitor project execution. The chair of this group revolved among the partners other than Mobil.[REMOVE]Fotnote: Rolstadås, op.cit. p. 103. The chair of this group revolved among the partners other than Mobil.

The operator’s organisational structure

Mobil Exploration Norway Inc (Meni) had a holding of roughly 13 per cent in Statfjord, a relatively modest interest which meant that it only had 13 per cent of the votes in the SUOC. In practice, however, the operator controlled the project and was responsible for establishing the organisations which led the construction of the three platforms.

Each of these installations was regarded as a separate project. Mobil accordingly appointed independent PTFs to head work on the A, B and C platforms respectively. These task forces comprised representatives from Mobil Oil companies, primarily Mobil Research and Development Corporation (MRDC) based in Princeton, New Jersey.

The latter served as a consultant to Meni, assigning technical specialists to the three PTFs and providing support in the form of general technical specifications, special assistance and so forth. MRDC reported to the PTFs, which were responsible for coordination and submitted technical plans, cost estimates and so forth to Meni. The operator presented these in turn to the SUOC.

Meni was also a subsidiary of Mobil Oil Corporation, the holding company in New York. Head office followed up the projects in detail, and was heavily involved in important decisions. That limited Meni’s authority.

The Norwegian government was also closely involved in the development, and regular meetings took place between Meni and the ministry. The same applied to the Norwegian Petroleum Directorate (NPD).

As the largest licensee in the field, Statoil had personnel integrated in the Meni organisation. This arrangement was specified in the licence terms to ensure that the state oil company learnt how to develop Norwegian fields. Statoil was also the government’s mouthpiece in the development, and used this role to safeguard special Norwegian interests through contract awards and the like.

PTF Statfjord A

PTF A began its work in London during July 1974 together with Matthew Hall Engineering (MHE), which was responsible for technical design of the project. This task force initially comprised only five people.

Mobil’s overall philosophy was to hire a limited number of main contractors, and let them recruit sub-contractors. The three principal companies chosen were Norwegian Contractors to build the GBS, MHE for technical design of the topside and shaft outfitting, and Brown & Root for technical design of the loading buoy, flare and pipelines.

As the construction of Statfjord A advanced, however, it became clear that MHE would be unable to execute the work in a satisfactory manner. Its contract was cancelled in the spring of 1976 and the remaining engineering design work transferred to Brown & Root.

To achieve better coordination, Meni took over direct management of the project and Brown & Root was incorporated as part of Mobil’s PTF.[REMOVE]Fotnote: Kostnadsanalysen norsk kontinentalsokkel 1980.

PTF Statfjord B

The PTF responsible for Statfjord B was appointed in early 1976 and grew in the course of the year from two to 20 people. While three main contractors had been chosen for the A platform, it was resolved to select one principal engineering and management contractor (EMC). This would stand between the PTF and the construction sites.

A joint venture between Norwegian Petroleum Consultants (NPC) and Brown & Root was chosen. Mobil had originally wanted to give the job to the US engineering company alone, but Norway – represented by Statoil – wanted to build up domestic expertise and demanded a collaboration with a Norwegian partner.

Operations in the EMC were split between London and Oslo, which led to communication and collaboration problems. Mobil eventually sought to get project management back on track by taking over part of the work itself. That included follow-up of the contracts and, to some extent, the associated negotiations.

The joint venture accordingly moved from being an EMC, responsible for awarding and administering all contracts as well as project management, procurement and construction management, to become an engineering management consultant. Such a company only has advisory authority in relation to contracts.

Mobil’s PTF also took over supervision of the construction work in the spring of 1978. It established a site supervisor at every construction facility, who was directly subordinate to the PTF. The joint venture continued to provide personnel for site supervision, but these now reported to the PTF.

PTF Statfjord C

The PTF for the C platform was organised by and large in the same way as for Statfjord B in order to achieve the greatest possible copy effect administratively as well as on the technical side.

Published November 13, 2019   •   Updated November 20, 2019
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