Brown & Root lands offshore jobStatoil’s oil transport study

NPC – a Norwegian option

person by Trude Meland, Norwegian Petroleum Museum
While work on the formal approval for Statfjord B continued, operator Mobil initiated its preparations for building this platform.
— "NPC – new consulting firm for the oil sector" Facsimile from Adresseavisen 10.12.1975
© Norsk Oljemuseum

The first job was to identify possible engineering management contractors (EMCs). The planned B platform ranked as the largest Norwegian industrial project until then, and forces in industry and government wanted to prevent project assignments being awarded outside the country.

On Statfjord A, the bulk of the engineering work had gone to foreign contractors. The main problem was that no Norwegian company was big enough to undertake such a job, and possible contenders also lacked expertise in planning large processing facilities.[REMOVE]Fotnote: Engeland, S. (1995). Ingeniørfabrikk På Norsk : Oppbygginga Av Norsk Petroleumsrelatert Engineeringkompetanse, 154: 33.

The three largest industrial groups in Norway – Kværner, Aker and Kongsberg Våpenfabrikk (KV) – met in the spring of 1975 to discuss opportunities for winning engineering contracts on Statfjord B. Statoil was interested in a Norwegian constellation, and wanted this in preference to one of the large international companies. Experience with Matthew Hall Engineering (MHE) in London on Statfjord A had not been the best. The state oil company also gave clear signals that it was willing not only to look at engineering costs, but also to give weight to the positive effects which a Norwegian contractor could have for choosing domestic suppliers.[REMOVE]Fotnote: Engeland, S. (1995). Ingeniørfabrikk På Norsk : Oppbygginga Av Norsk Petroleumsrelatert Engineeringkompetanse, 154: 36.

The goal had to be to replace MHE in the next project. Statoil believed there was only room for one large Norwegian company, and that the three main groups had to involve more partners, not least with an eye to regional considerations. Seven other Norwegian companies – Elkem, Årdal og Sundal Verk, Electro Union, Norconsult, Dyno, Hafslund and Norsk Jernverk – were invited to participate in the new joint venture. The 10 partners would own a tenth each, thereby ensuring that none of the three largest would become too dominant and giving the new company an independent image.

According to the business purpose clause for NPC, “the company’s purpose will be to pursue independent consultancy activities – including project management for planning, building and operation of facilities related to oil and gas”.[REMOVE]Fotnote: Agreement on establishing NPC. Engeland, S. (1995). Ingeniørfabrikk På Norsk : Oppbygginga Av Norsk Petroleumsrelatert Engineeringkompetanse, 154: 51. The basis had now been laid for national participation in the planning of future petroleum projects, an activity which had previously been reserved for foreign industrial giants.[REMOVE]Fotnote: Norsk Oljerevy. (1976).

NPC’s management committee appointed a working party for Statfjord B in November 1975. The joint venture was clearly going to win the contract, but needed a foreign partner to share the work on a 50-50 basis. In order to reach agreement, three candidates were invited to tender in open competition for a joint venture with NPC covering the contract for overall project management and engineering services. The invitation was issued on 12 February 1976 to Brown & Root (UK) Ltd, Bechtel International Ltd and Foster Wheeler Offshore Ltd.[REMOVE]Fotnote: Norsk Oljerevy. (1976).

Brown & Root won the job, and agreed with NPC to share functions and work between their respective offices in London and Oslo.  Sceptical about NPC and worried about coordination problems between the two cities, Mobil demanded that the US partner should have the lead role. The operator also suspected that NPC would be unable to secure sufficient staff and that its office facilities would be unsatisfactory.

Negotiations began with Mobil in October and the contract was signed after much toing and froing.

To learn more, see: Statfjord B – the original plan.

Brown & Root lands offshore jobStatoil’s oil transport study
Published December 5, 2019   •   Updated December 11, 2019
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