Signed by the Norwegian and British governments on 10 May 1976, this unitisation agreement marked an important breakthrough in international law. Two countries had agreed for the first time on how they were to exploit an offshore petroleum deposit as a single unit, with joint installations on both sides of the boundary.
The Frigg reservoir straddles the UK-Norwegian median line in the North Sea, with the Total Oil Marine (TOM) group operated by Total on the British side and the Petronord consortium with Elf as operator on the Norwegian. A number of considerations had to be clarified before a development of the field could begin.
First, the two sides had to decide whether Frigg should be developed as a unit, or as two separate parts. The size of the field and its division between the two nations also had to be clarified. Last but not least, a decision had to be taken on where the gas should be landed and sold. Once the licensees had reached agreement, too, their decisions had to secure UK and Norwegian government approval.
Negotiations on the Frigg development became a touchstone for cross-national exploitation of a petroleum field to the benefit of society. Socio-economic and resource considerations favoured a unitisation. The licensees needed to join forces on a common plan for development and operation, and reach agreement on how costs and revenues should be allocated in relation to licence interests. But unitisation calls for collaboration between licensees who do not necessarily share the same interests. This proved to be the case on Frigg.
A series of smaller agreements concluded between Petronord and the TOM group in 1973 and 1974 formed the basis for the unitisation deal. To understand something of the complexity of the main accord, it is necessary to look at these underlying agreements.
Efforts to reach a unitisation agreement dragged on. After the discovery of Frigg in 1971, discussions began on how to develop the field. The various parties agreed that its exploitation called for collaboration, but not on how extensive this should be. Norsk Hydro stood at one extreme, calling for full unitisation with joint development, production, transport and sales, while both the Norwegian government’s oil office and Elf believed that unitisation had to cover production from the reservoir but did not necessarily have to extend to development, transport or sales. Total and Aquitaine were on the other side, and their sole interest was getting going as quickly as possible. The British government also wanted the fastest possible development so that Frigg output could help relieve gas supply shortages in the UK during the early 1970s.[REMOVE]Fotnote: Since the Ekofisk gas had gone to Germany, securing Frigg production was important for the British Gas Corporation (BGC). It made no secret of its desire to obtain the Norwegian share of the field’s gas. The British gas market would have a supply deficit from 1975, with demand expected to rise from roughly 40 billion cubic metres in that year to about double this level by 1982. Total wanted to act while the terms were good. Possible further major gas discoveries in the North Sea would change sales conditions. The consideration for the Norwegian government and Hydro was not so much time but more the attainment of full unitisation, so that the field could be jointly developed and operated.
Norway was very concerned that Total would begin production from the UK part of Frigg before Petronord was ready to start on the Norwegian side. This reflected a recognition that whoever was first to get going could tap the whole reservoir. Production would cause pressure changes affecting other parts of the field, with gas being drawn towards the producing wells regardless of national boundaries. The Frigg field was very homogenous and permeable, making it impossible to separate Norwegian from British gas during production.
Elf, the operator for Norway’s share, was less concerned than its Norwegian partners. It had almost 45 per cent of the TOM group, and would receive revenues wherever the gas came up. The three French companies in Petronord’ Elf, Total and Aquitaine – were the sole licensees for the British share, and would accordingly make money regardless of where production started. Since taxes were lower on the UK continental shelf, early production there would actually be an advantage.
The Norwegian companies and authorities had to stand together to achieve the best possible agreement. On 25 May 1973, the government exercised its option to acquire five per cent of Petronord. This holding was transferred to the newly-established state oil company Statoil. Later, Hydro also exercised its double option to increase its share from 13.6 per cent to 32.87.
Although Elf retained the operatorship, the Norwegian position had become significantly stronger. Licence interests were now 27.61 per cent for Elf, 32.87 per cent for Hydro, 20.71 per cent for Total Marine Norge, 13.81 per cent for Aquitaine and five per cent for Statoil.
Britain’s TOM group comprised Total Oil Marine (UK) Ltd as operator with 33.33 per cent, Elf Oil Exploration & Production Ltd with 44.45 per cent and Aquitaine Oil (UK) Ltd with 22.22 per cent.
One of the Norwegian government’s trump cards in the fight over a unitisation agreement was the median line treaty of 1965 with the UK. This specified that the governments of the two countries should seek to reach agreement on how structures which lay in both continental shelf sectors could be most effectively exploited and the revenues distributed. The governments were ultimately responsible for ensuring the best possible utilisation in socio-economic terms. True, they could not force the companies to unitise – but if the two nations were agreed it would be difficult for the licensees to oppose them.
A step forward
The various parties had made some progress by the end of 1972. Hydro and the Norwegian government dropped their demand for a parallel development, while the French companies agreed to joint production. Agreement was reached that production would start at different times, but would aim for maximum effective utilisation.
A processing plant was to be built at St Fergus in Scotland to receive the British gas through a pipeline from Frigg. Petronord would receive a percentage of the revenues when production began from the UK side.
That meant money in the bank for Petronord, significantly reducing the consortium’s need to borrow for funding its own development. In addition, the Norwegian authorities gained time to complete discussions on another key issue for a Frigg development – namely, where the Norwegian gas was to be landed. We will return to that question.
Licensee groups reach agreement
The biggest hurdles in the negotiations between Petronord, the TOM group and the Norwegian and British government related to efforts to find a way to divide up the reservoir between the two countries. A lot of money was at stake. Calculations indicated that each one per cent share would correspond to two billion standard cubic metres (scm) of gas. Assuming a price of NOK 0.05 per scm, that would be worth NOK 100 million. The sales price actually turned out to be six times higher.
By the summer of 1972, the question of a division of the field had become a red-hot issue. The Frigg reservoir had been calculated in January to contain 285 billion scm of gas, with 57 per cent lying in the Norwegian sector. Then Total drilled a dry well on the UK side. The Norwegian players maintained that this called for a reassessment of the size and division of the field to Norway’s advantage. On 8 September, both sides presented their overall estimate of reservoir size and division: Elf/Total maintained that the field contained 260 billion scm, with 52-55 per cent lying on the Norwegian side, while Hydro argued that reserves totalled 234-291 billion scm. Of this, 65-66 per cent was Norway’s.
To reach agreement, Elf proposed the engagement of independent experts who could interpret the data and draw a conclusion. The other parties concurred with this proposal. The choice lay between DeGolyer and MacNaughton and Core Laboratories, and the former was selected. Its assignment was first to determine the extent of the Frigg reservoir, second to estimate the total volume of gas and finally to calculate how large a share fell on each side of the boundary. This work was due to be completed by 30 September 1974. While the licensees undertook to accept DeGolyer and MacNaughton’s conclusions, the British and Norwegian governments refused to be bound by them. The deal to hire expert consultants was enshrined in the Frigg field expert agreement, the first official contract between the partners in the licences, at the end of May 1973.
DeGolyer and MacNaughton took its time in reaching a conclusion. Before these findings were ready, three other agreements had been concluded between the two sets of licensees.
On 9 July 1974, the Frigg main agreement determined that the field would be treated as a single unit and that the ultimate shares of the various participants would be determined by their original interest and the cross-boundary division of the reservoir.
The Frigg operating agreement was signed on the same day. This established the guidelines for developing the field and organising the actual gas production. It also contained provisions on how certain operations should be carried out and a binding structure for communication between the companies and the authorities. A division of the Frigg operatorship was agreed, with Elf responsible for developing and operating the whole field. Total took charge of the transport side, which involved both laying and operating the pipelines and operating the receiving terminal.
Finally, a transport agreement was signed between Petronord and the TOM group. A key issue in the unitisation process had been where the Norwegian share of Frigg’s gas should be landed and who would purchase it. This proved a difficult part of the negotiations. Total was bound by the British law which said that all gas production from the UK continental shelf must be offered to the British Gas Corporation (BGC) as the state distribution monopoly. This made it clear that at least one pipeline had to be laid from Frigg to the UK to carry the British share of the gas.
In Norway, the political intention was that petroleum production should be landed wholly or partly in the country if the national interest required it. This was made clear in the royal decree of 9 April 1965. But landing in Norway faced a number of problems. First, selling the volume of gas involved to the domestic market would be difficult. Norway was not a large gas consumer, and no distribution network existed. Second, crossing the deepwater Norwegian Trench between Frigg and the Norwegian Coast was not technologically feasible at that time. A unitisation agreement which covered both development and production of Frigg required an exemption from the Norwegian landing rule.
After a long and complex political process, Petronord concluded a gas sales contract with the BGC on 1 July 1974. A royal decree of 21 June 1974 gave the green light to landing and selling the Norwegian Frigg gas in the UK. The Frigg transport agreement between the TOM group and Petronord was signed nine days later. This involved laying two pipelines from the field to St Fergus, one British and the other Norwegian, with Total UK as operator for both.
These four deals – the main, operator, expert and transport agreements – concluded the unitisation work carried out by the licensees. It was now up to the Norwegian and British governments to agree a formal treaty. Although the basis for this had been laid by the agreements between the licensees, the discussions dragged on. There were several reasons for this, including the fact that the size and division of Frigg were still not clear. In addition, Statfjord had been found further to the north. This huge oil field also straddled the boundary, and it was important for Norway that a thorough job was done with the Frigg unitisation in order to provide a starting point for negotiations over Statfjord.
The final Frigg treaty was signed in London during May 1976. Its terms by and large confirmed the agreements reached between the licensees. The Frigg reservoir was defined to embrace the main structure and associated gas-containing strata. Procedures were also developed for determining later disputes over the division of interests. The number of platforms and their location were specified. The licensees were required to draw up a plan to ensure acceptable production of the field, which would be revised once a year. It was determined that no barriers should be imposed to prevent free movement of personnel and freight over the boundary. Common safety measures and regulations were to be developed. Two separate pipelines would be laid and the field would have two operators, one for production and the other for transport. This treaty opened the way to commercial exploitation of Frigg.
Approaching a clarification
Although the unitisation deal was in place, disagreement on the size and division of Frigg remained unclarified. It was clear as early as the summer of 1973 that DeGolyer and MacNaughton needed more data before it could reach a conclusion, and that more seismic would have to be shot.
At the same time, the newly-formed Norwegian Petroleum Directorate wanted an independent opinion on the field. It hired Core Laboratories to review data on the reservoir’s size and to advise on certain engineering problems relating to the formation and its production in connection with the proposed unitisation. Core concluded that Frigg contained 242 billion scm of gas, with 69 per cent lying on the NCS.
Hydro and Statoil disagreed over the interpretation of the seismic data which was submitted, and a big divergence existed between DeGolyer and MacNaughton’s interpretations and those made by the Norwegian companies and not least by Core. DeGolyer and MacNaughton had concluded that only 51 per cent of the gas reserves were on the NCS. The French companies had to admit that uncertainty over the interpretation was great, but were satisfied with the result.
Hydro and Statoil called for new drilling in order to reach more reliable conclusions. The Norwegian companies had everything to gain from additional appraisal wells, even though their cost was high – an estimated NOK 20 million each. DeGolyer and MacNaughton agreed in September 1974 that a new well on the western flank would be sensible. Statoil and Hydro convinced the French companies that three more were required. All four wells were drilled between April 1975 and January 1976.
Almost three years late, on 14 February 1977, DeGolyer and MacNaughton signed off its final report on the size of the gas reserves in Frigg and their allocation between the UK and Norway. The reservoir was estimated to contain 268 658 million scm, of which 60.82 per cent belonged to Norway and 39.18 to the UK. Although the licensees had undertaken to accept these conclusions, the Norwegian and British authorities were free to reject them. After much discussion, however, both governments accepted the division of reserves on 12 December 1977. By that time, parts of the field were already developed and production had started from the UK side.[REMOVE]Fotnote: This text is based on an unpublished manuscript by Lars Gaute Jøssang and Birger Lindanger, Pioner på sokkelen. Elf i Norge gjennom 30 år 1962-1992, and on Gunnar Nerheim, En prøvestein på petroleumshushold og unitisering, Norsk Oljemuseums årbok, 1991.
Unitisation in Norwegian The term unitisere (unitisation) has been established as an unambiguous concept in the Norwegian oil industry, meaning “to treat as a single unit”. It was accepted by the Norwegian Language Council in 1991, which had no objections to its continued use if the term was established in the industry. However, the council noted that there was nothing wrong with using a more “Norwegianised” term, such as enhetsbehandle/enhetsbehandling. Letter from the Norwegian Language Council to the Norwegian Petroleum Museum, 21 November 1991.
The Frigg archive is located at the National Archives in Stavanger and consists primarily of two sections - Total E&P Norway's records and the records of the Elf Aquitaine Norge Offshore Union (Eanof).
As a result of mergers, the Total archiveconsists in turn of a number of sections. Many departments and offices have also had separate sets of records. These documents deal not only with Frigg, but also with the company’s ordinary operations. The Eanof archive also comprises several sections – the union’s own correspondence files, materials from the chief safety delegate and the transactions of the working environment committee. Material from Elf Aquitaine Norway is also included, since union representatives sat on the company’s board.
Under a deposition agreement with Total E&P Norge AS, the National Archives in Stavanger has undertaken to store the material even though it formally remains the property of the records creator. Legal rules on confidentiality will be observed, but enquiries about access to and use of the archive will be considered by the company until a possible future amendment to the agreement.
Before the material was sorted, it filled 160 metres of shelving. Rearrangement has reduced this by 50 per cent. The selection aims to document a cross-section of Frigg activities – not only material relating directly to development and operation of the field but also necessary contextual documentation. Space has accordingly been given to land-based operations and general company history. Furthermore, efforts have been made to concentrate on internal company records not found elsewhere. Little of the information reported to the Norwegian authorities (the Norwegian Petroleum Directorate and the ministries) has been conserved by this project. It will nevertheless become lodged with the National Archives’ records when these government document collections are transferred there.
The National Archives has only selected 140 technical drawings produced in connection with the construction and operation of the Frigg field’s installations, a tiny percentage of the total. These include flow diagrams, elevations, deck cross-sections and diagrams of well and piping tracks.
Other sets of records at the National Archives in Stavanger also contain materials dealing with Frigg. The most important are the records of the NPD and the Ministry of Industry’s oil office. The latter embraces material transferred in its time to the NPD and subsequently passed on the National Archives.
Overview of the Total E&P Norge Archive
Total E&P Norge consisted originally of the Total, Fina and Elf Norge companies. Elf Norge was originally called Petropar A/S from 1965, but changed its name in 1967. Elf Norge became part of Elf Aquitaine Norge A/S in 1977 (previously Sociète Nationale Elf Aquitaine – SNEA). The company changed its name to Elf Petroleum A/S in 1992. Total Norge A/S and Fina Exploration Norge SA merged in 2000. Elf Petroleum also became part of this company in 2001. It was known as TotalFinaElf until 2003, when its official name was changed to Total E&P Norge A/S.
The French company Elf discovered Frigg in block 25/1 in 1971, and became responsible for its development and operation. Frigg ranked at the time as the world’s largest offshore gas field. It straddled the UK-Norwegian boundary line, and accordingly became a collaboration between Britain and Norway (40 per cent UK, 60 per cent Norwegian). The platforms were divided between the two sectors. Plans called for the quarters platform (QP) to stand entirely on the UK side of the boundary, but 10 metres of one corner extended into the Norwegian sector. The two countries nevertheless agreed on a practical boundary midway along the bridge between treatment platform 1 (TP1) and treatment and compression platform 2 (TCP2). A sign on this bridge marked the frontier between Britain and Norway. The boundary provided an opportunity for duty-free sales on QP. TP1, TCP2 and QP collectively formed the core Frigg platforms, also known as the Frigg complex. Drilling platform 2 (DP2) and the flare platform (FP) on the Norwegian side plus concrete drilling platform 1 (CDP1) and manifold compression platform 01 (MCP-01) in the UK sector comprised the remaining Frigg installations. The Frigg area also embraced the North-East Frigg (NEF), East Frigg (EF) and Lille-Frigg (LF) satellites.
Records creator: Pa 1362 – Total E&P Norge
Former names: Elf Aquitaine Norge A/S, Elf Norge. Elf Petroleum Norge A/S, Petropar A/S, TotalFinaElf, TotalFinaElf Exploration Norge A/S
History: period from 1965 (about) to 2007 (about)
Scope: 80 shelf metres
Access restriction: Restricted private archive, access given to former archive owners.
Description of the archive:
The records have a range of provenances because of all the mergers (see history) and because many offices and departments established their own archives (including two offices when the company was called Elf Norge – one for administration in Oslo and the other for technical activities in Stavanger). Elf Aquitaine Norge created the bulk of the archive, but since no sharp division by periods was made at the time of the mergers, it has been difficult to separate out the Elf records. It is very hard to document the original structure of the archive. Various departments and individuals in Elf have delivered material for which they were responsible, but which they did not necessarily create, to the remote archive. The latter has recorded which department supplied the material. This has often provided the basis for structuring the records into series. Other archives were delivered from the relevant department, which has in turn formed the basis for structuring the series. The material is a selection covering 160 shelf metres (unsorted) made in connection with the Frigg industrial heritage project. This choice was made from several thousand shelf-metres in all. Weight was given to documenting the human side of the activity. The technical/production aspects of the business will largely be documented in the NPD archive. Preserving documents found only in the company’s archive has also been a priority. Information reported to the authorities will be found in the relevant government records. The archive documents not only the Frigg field, which was in operation from 1977-99, but also the company’s regular activities. In this way, activities on Frigg are located in a necessary and broader company context. The series, item and folder descriptions are in both Norwegian and English. The records have largely retained their original titles. Their content is largely in Norwegian and English, but includes some documents in French.
Overview of the Eanof Archive
The Elf Aquitaine Norge Offshore Union (Eanof) was established in 1977. It was (and remained in 2007) part of the Norwegian Union of Energy Workers (Safe), previously the Federation of Oil Workers? Trade Unions (OFS) and before that the Union of Operator Employees (OAF).
Records creator: Pa 1415 – Elf Aquitaine Norge Offshore Forening (Eanof) Period: 1977-2003
Scope: 17.8 shelf metres
Description of the archive:
The records probably have several provenances, because they also contain material from the chief safety delegate (Hovedvernombudet – HVO) and the working environment committee (Arbeidsmiljøutvalg – AMU) in Elf/Total. Eanof officials are likely to have also been represented in the HVO and AMU, or to have received copies of documents within their ambit. Moreover, the achieve includes a number of documents from Elf Aquitaine Norge, including board documents. The union had representatives on the company’s board. As finally organised, the material fills 17.8 shelf metres. The bulk is organised by subject. The correspondence files are organised by file index, and some of the internal memos are arranged in accordance with the National Archives’ own filing system (see the series description).
Overview over David Robert Bayly archive
Bayly started keeping a note book at the end of 1974 initially to assist him in organising his work as the principle structural auditor for the Dunlin A concrete substructure. Initially the note books containing very brief details of events including actions to be taken, facts not to be forgotten, documents received etc. Entries were made as and when necessary and not on a daily basis.
Bayly started keeping a note book at the end of 1974 initially to assist him in organising his work as the principle structural auditor for the Dunlin A concrete substructure. Initially the note books containing very brief details of events including actions to be taken, facts not to be forgotten, documents received etc. Entries were made as and when necessary and not on a daily basis. Over time a more structured approach was adopted and soon entries were made on a regular basis for most working days. The day books, usually referred to throughout his working life as his “Black Books” (although for a period they were red!), include records of conversations, notes taken at meetings, lists of things to do, pasted-in notes from his secretary, details of travel arrangements and, since 1993, details of his working arrangements in Norway. As well as a record of his professional activities the day books also contain a number of entries relating to personnel matters, particularly church activities. The vast majority of the entries in the day books were made at the time the events occurred and no efforts have been made to provide a summary or commentary on the events. The purpose of the day books was to simply record what factual information not to record events for posterity. The primary reason for recording the minutiae of his working life in a day book has not changed since David first started in 1974. The purpose, he says, is “to assist me in effectively organising my work and to provide me with a record of actions, conversations and meetings that might be helpful to me in the future”.
Records creator: David Robert Bayly
Born in Catford in South East London. Father Paul W. Bayly, shipping clerk in a firm of oil and seed brokers, mother Alice Violet Bayly. Family life centred on the local Baptist church. Still actively involved in church life. Education: City University London – BSc (Hons) (1962 – 1966), City University London – PhD (1966 – 1969). Married Doreen Janet Cliffe in 1967, 3 children. Working Background: City University London (1969 – 1971 lecturer in the theory of structures), Pell Frischmann Group (1971 – 1994), Crandon Consultants Ltd (1994 -). Involved in the offshore oil and gas industry since 1973. 1977 to 1993 he was responsible for the technical and commercial management of many design projects including topside modules and decks, steel jackets and subsea production facilities in both the northern and southern basins of the North Sea. He also supervised numerous field development and specialist studies including complex stress analyses of pressure vessels and valves on the Frigg Field platforms. In 1993 he came to Stavanger to assist Elf Norge in the preparation of a safety case for the Frigg Field UK platforms as required by the new UK regulations brought in following the Piper Alpha disaster. He has commuted to Norway on a weekly basis. In 1994 he became an independent consultant working mostly for Elf Norge. 1994 – 1996 he was an “integrated contractor” in the Engineering Department of Elf Norge involved in managing risk analyses for the Frigg Field. In 1997 he moved to the HSEQ Management Department of Elf Norge and was responsible for the preparation of Safety Case submissions to the UK Health and Safety Executive and Applications for Consent to the Petroleum Safety Authority Norway. He has been involved in numerous risk analyses and, since 1999, has been part of the team responsible for the decommissioning of the Frigg Field production facilities.
Overview of the Oil Office Archive
Those parts of the archive described here were transferred in their time from the Ministry of Industry to the NPD, and subsequently delivered to the National Archives in Stavanger. The rest of the industry ministry?s archive has been delivered to the National Archive in Oslo. The records primarily comprise documents related to the activities of the oil office, but include materials from before the creation of this body ? probably from the continental shelf committee and the State Petroleum Council.
Ministry of Industry, oil office, Ministry of Industry, oil and mining department, oil office.
As a result of the large increase in oil-related business, it proved necessary in 1966 to establish a separate oil office in the Ministry of Industry. Government consideration of continental shelf issues had previously rested with the ministry’s mining office. A continental shelf committee appointed by the Crown Prince Regent’s decree of 8 November 1963 supported the ministry in preparing legislation and regulations. The State Petroleum Council was established by royal decree of 9 April 1965 to support the ministry as an advisory body concerning exploration for and exploitation of submarine petroleum deposits on the NCS. This council was the licence-awarding authority when blocks were handed out in the first offshore licensing round. The industry ministry acquired its own oil and mining department in 1972. The oil office comprises two sections, for technical and geological aspects respectively. The NPD was also established in 1972.
Overview of the NPD Archive
The archive consists of minutes of meetings, memos and correspondence files. These are arranged in such a way that the original archive structure has been retained ? in other words, it accords systematically with the file index used by the NPD. The NPD?s correspondence files are periodised annually.
All correspondence categories can accordingly be found in each annual set. Records begin in 1973 when the NPD became operational, but some documents from 1972 (the DWP project) are included. The correspondence file contains a general section and a section organised alphabetically by approved discovery and field name and by transport systems. An annual set can cover a large number of boxes. Records which lacked a file code have been organised in series E. See also the A-101348 archive, which contains documents from the Ministry of Industry’s oil office in the 1963-75 period. This material was transferred to the National Archives in Stavanger in 2003.
Records creator: Norwegian Petroleum Directorate Period: 1972-
History: Legal authority and area of jurisdiction: The Storting (parliament) resolved on 14 June 1972 to establish a petroleum directorate in Stavanger to regulate oil and gas discoveries on the Norwegian continental shelf.
Predecessors: Before the NPD was created, government consideration of continental shelf issues was handled by the mining office of the Ministry of Industry. A continental shelf committee appointed by the Crown Prince Regent’s decree of 8 November 1963 supported the ministry in preparing legislation and regulations. The State Petroleum Council was established by royal decree of 9 April 1965 to support the ministry as an advisory body concerning exploration for and exploitation of submarine petroleum deposits on the NCS. This council was the licence-awarding authority for the first offshore licensing round. A big expansion in the volume of business prompted the creation of a separate oil office in the ministry in 1966, and the latter acquired its own oil and mining department in 1972.
Administrative placement: Petroleum and energy issues were transferred in 1978 from the industry ministry to a new Ministry of Petroleum and Energy. Constitutional responsibility for issues relating to safety, the working environment and emergency preparedness on the NCS was transferred in 1979 from the Ministry of Petroleum and Energy to the Ministry of Labour and Local Government. This meant that the NPD subsequently answered to two ministries. The working environment and safety department of the Ministry of Local and Regional Government was formally transferred to the Ministry of Labour and Government Administration on 1 April 2001. Where carbon dioxide issues are concerned, the NPD derives its authority from the Ministry of Finance.
Functions: The NPD was given overall authority to regulate, carry out total safety assessments for and issue regulations governing the petroleum activity. A branch office was established at Harstad in connection with the start of exploration drilling off northern Norway.
Successors: The NPD was divided into two independent regulatory bodies in 2004: the Petroleum Safety Authority Norway, responsible for safety and the working environment, and the NPD in charge of administering petroleum resources.
Gunleiv Hadland, Norwegian Petroleum Museum
French oil company Elf led the development of Frigg, and was accordingly responsible for awarding the required contracts. These assignments were largely split between France, Norway and the UK, but deliveries also came from the USA and other countries.
— TP1 modules under construction in France. Photo: TotalFinaElf/Norwegian Petroleum Museum
From the early 1970s, the Norwegian government was already giving weight to promoting domestic companies as suppliers to the oil industry. Conditions on establishing offices in Norway and the use of Norwegian suppliers were included in the licensing rounds which awarded acreage on the Norwegian continental shelf. While these political guidelines helped to set a more national stamp on the oil industry, the Norwegianisation process took time and did not make itself fully felt until the 1980s.
In the late 1970s, the Frigg development was one of the projects reviewed in a cost analysis of such activity on the NCS. A number of developments had found costs rising sharply compared with initial estimates, and an official inquiry – known as the Moe commission – was appointed to establish the reasons. This body submitted a wide-ranging report in 1980 on progress in the various development projects on the NCS, under the title Cost analysis on the NCS.
Phase I, britisk side 1973-1977
Phase II, norsk side 1974-1978
Phase III, compression facilities 1978-1981
Fordeling av Frigg-kontraktene pr. høsten 1978.
Tabell satt opp av Elf til Kostnadsanalysen bind 2, s.104
This report identified a number of factors which could lead to overruns.[REMOVE]Fotnote: Distribution of Frigg contracts to the autumn of 1978. The table was prepared by Elf for the Moe commission’s
report (vol 2, p 104).
One was the country responsible for the delivery, as shown in the table above. Data in the cost analysis showed that about 26 per cent of total deliveries for the Frigg development came from Norway and 37 per cent from France. While the latter accordingly accounted for the biggest share overall, it is worth noting that the Norwegian proportion increased during the development phase.
The project was divided into phases. Phase I covered the development of the British share of the field, phase II the work on the Norwegian side, and phase III the installation of the compressors. During phase I and the first part of the second phase, Norwegian involvement was relatively modest apart from local services. One exception was the construction of the concrete gravity base structure (GBS) for the pumping platform, which was later converted to the first drilling installation (CDP1). The GBS was built in Åndalsnes by Norwegian Contractors on behalf of the French Doris group. Suppliers in Norway had an advantage in delivering this type of structure, which called for deep fjords for construction and short distances for towing. A corresponding commitment on the UK side occurred with the construction of Frigg’s TP1 platform in Scotland. The GBS for MCP-01 was built in Sweden because this country had the construction capacity needed.
In phase II, the Norwegian share of orders increased from 17 to 33 per cent, whilst Britain’s proportion sank from 22 to seven per cent. This was primarily because Norwegian Contractors secured the contract to design and construct the GBS and module support frame for the second treatment and compression platform (TCP2). This structure was again built at Åndalsnes. Part of the job of fabricating and hooking up the topside modules went to the Orkanger yard of France’s Spie Batignolles/Vigor. Oil Industry Services in Kristiansand became involved as a sub-contractor at the hook-up stage.
Companies in Norway secured more than half of all the contracts in phase III of the Frigg development, which involved positioning the compressors on TCP2. The Norwegian authorities considered it desirable that Elf placed the order for the compressor modules in Norway, since the domestic share of goods and services for the field was lower than the government expected. In a number of cases, tenders from Norwegian fabricators were uncompetitive.
Because of political pressure, companies in Norway nevertheless won a series of contracts. The largest went to a joint venture between Spie Batignolles and Vigor, with Ponticelli as piping sub-contractor. The generator and process control module was fabricated in Orkanger. By comparison, about half the total deliveries to Statfjord A derived from Norwegian companies. Ten per cent of these contracts were held to have been awarded on a non-commercial basis – in other words, bids from foreign firms were lower than those from Norway, but the latter were preferred to help build up a Norwegian supplies industry.
One purpose of the Moe commission’s analysis was to investigate whether the purchase of Norwegian goods and services was responsible for the cost increase. The study found that the rise in costs from using domestic suppliers was not especially great in relation to total expenditure. In the autumn of 1978, the development project was estimated to have cost NOK 10.5 billion. That represents an increase of NOK 7.6 billion from the 1974 forecast of NOK 2.9 billion, or more than a tripling. No less than NOK 1.2 billion of this rise related to the loss of the DP1 jacket. The additional cost of using Norwegian deliveries was put at NOK 50 million, since bids from domestic fabricators were often higher than those from foreign suppliers. According to the report, the bulk of the overruns was attributable to expensive technical solutions, often in combination with the use of consultants and weak control by the operator. Prices had also been driven up because a number of large development projects were being pursued at the same time.
The additional cost of using Norwegian suppliers was small by comparison with the total overruns in the Frigg development. Many had feared that political pressure to “buy Norwegian” would lead to sharp cost increases, but these worries proved misplaced. The deadline-based contract for gas deliveries meant that progress was prioritised at the expense of cost control. Delays arising from the loss of the DP1 jacket could be recovered to some extent with deliveries from Norway. The Frigg project was implemented at a time of very strong price inflation for oil industry supplies. It also proved difficult to cost the new technical solutions which were adopted.
Sources: Moe, Johannes (ed): Kostnadsanalyse norsk kontinentalsokkel (Cost analysis for the NCS), 1981.
NOU 1999, 11: Analyse av investeringsutviklingen på kontinentalsokkelen (Analysis of investment development on the continental shelf).
Published August 2, 2018 • Updated October 22, 2020
by Trude Meland, Norwegian Petroleum Museum
After the most hectic development phase had been completed on Frigg and Heimdal, these fields moved into the operations or production phase. This called for a restructuring of the organisation and improvements to its efficiency.
— The radio room at QP. Photo: TotalFinaElf/Norwegian Petroleum Museum
Elf started to cut costs in the autumn of 1985 through a determined downsizing. There was no way a workforce about 1 600 strong could be maintained in Norway.
Forecasts showed that production from Frigg would gradually decline, and could cease altogether around 1995.[REMOVE]Fotnote: Elf Aquitaine Norge A/S, annual report for 1985, p 40: Elf today. The oil price slump in 1986 prompted oil companies in general to cut back their activities, with downsizing and rationalisation becoming an international trend. A marked decline in the Elf Aquitaine Norge workforce can be seen in the graph below, from 1 600 in 1985 to roughly 1 000 in 1991.
The workforce expanded somewhat between 1991 and 1994 because of the Lille-Frigg and Frøy developments.[REMOVE]Fotnote: Elf Aquitaine Norge, annual report for 1992, p 8: Employees By the early 1900s, however, it had become clear that the profitability of Frigg production was in decline. A shutdown of the whole field would only be a few years off unless operating costs could be reduced. Project 94 was launched to adapt the organisation to a lower level of profitability. With the aid of severance packages and early retirement, the number of employees in Elf was reduced from 1 039 at the start of 1994 to 873 by 31 December 1995.
The Change 97 campaign began in September 1996 as a continuation of the downsizing process, with attractive severance packages. By the end of 1997, the workforce had been reduced to 558 people. Yet another process involved the transfer of 99 employees to Norsk Hydro in connection with the latter’s takeover of the Heimdal operatorship on 1 January 1998.[REMOVE]Fotnote: Elf Petroleum Norge, annual report 1997, employees and organisation.
In connection with the downsizing, an extensive restructuring of the operations organisation and production philosophy for Frigg was implemented in 1997. This Future Operations (Futop) project was pursued by Elf’s own organisation. Offshore technicians, for instance, were actively involved in its planning and execution.[REMOVE]Fotnote: Hansen, Christian: From a Chinese butterfly to nails. Paper at the 23rd World Gas Conference, Amsterdam, 2006. All preventive maintenance was subjected to a critical assessment, which resulted in a 41 per cent reduction in the maintenance programme. A maintenance assessment showed that only 10-15 per cent of material damage and faults were so important for continued operation that they had to be immediately repaired. The rest could wait until a specialist team was mobilised.
A new organisational model was implemented, with a flatter structure. This involved removing a number of middle managers and establishing multiskilled teams with extensive self-management and responsibility. Operating costs for Frigg were reduced by about 40 per cent compared with the early 1990s. Elf Petroleum Norge’s annual report for 1998 assumed that Frigg would shut down on 1 October 2001, but the restructuring helped to keep operation of the field profitable until the autumn of 2004.
In order to enhance flexibility during the final production phase, a contract for Frigg maintenance was signed with Aker. The latter had long experience of contractual work on the field, with employees stationed out there for a number of years. Part of the Elf workforce was transferred to Aker, but remained on Frigg. The move to Aker meant that they could be shifted to other fields as the Frigg workforce was downsized. Maintenance, modifications and support functions thereby came to be largely performed by contractor personnel who were well acquainted with Frigg.[REMOVE]Fotnote: http://www.akerkvaerner.com/internet/AboutUs/AkerKvaernerGroup/GroupStructure/MMO+Europe/Projectsandexperience.htm.
Turnover of female employees had proved high – as much as five-six times the level for male personnel. One reason was the difficulty of caring for pre-school children during working hours. The staff committee accordingly proposed the creation of a nursery school “because the company wants to retain women in the workforce”1.
This was seen as a good proposal by management. Contact was taken with the nursery school which formed part of the French school and with the city council to achieve a collaboration. Nothing came of these approaches. It was thereby resolved that Elf would establish its own facility, and a house was leased at Grødem in Randaberg local authority. A nursery school for 20 children opened its doors in 1978.2This was soon too small, and work continued to secure more space. A new building was erected at Finnestad, close to Elf’s main offices, and Pierre Chouzenoux, managing director of Elf Norge, was able to cut the ribbon and declare “Veslefrigg” – Infant Frigg – open on 18 October 1983. It had three classes and space for 40 children. At that time, only Elf, Statoil and the hospital had their own nursery schools in Stavanger.
1Minutes of the staff committee meeting on 19 August 1976. 2Elf Weekly, 27 February 1978.
The decision was taken in 1972 to locate Statoil and the Norwegian Petroleum Directorate in Stavanger, confirming the city's status as the country's oil capital. A number of international oil companies had already established offices there.
— Kampen School in Stavanger. Photo: Jarle Vines CC BY-SA 3.0 (https://commons.wikimedia.org/w/index.php?curid=10628249)
The French school are leasing the premises from Kampen school in Stavanger.
Petroleum workers from all corners of the globe moved in, including many French speakers. Elf had discovered Frigg and begun to build up an organisation in Stavanger. Many people were brought from France, and a number had their families with them. Most would be in Norway for two-five years, and needed educational provision for their children. The French school opened in 1972, leasing the premises from Kampen school which it still occupies. Although it was the arrival of the oil industry which prompted the creation of this facility, neither Elf nor other companies had anything directly to do with its establishment or operation. It represented a fantastic provision for Elf employees. Children who had gone to school in France, or who were to continue their education there, could attended classes with a French curriculum and teaching.
A privately-owned institution, the school falls under Mission Laïque Française, an organisation which runs schools outside France where major French companies operate.1 The teachers are French, and come to work in Stavanger for three-year periods.
The school was attended by 100 French children and young people in 1977. During the 1980s, a Norwegianisation of the oil industry occurred as locals acquired the necessary expertise to take over. This reduced the need to import personnel for the industry. That also applied to Elf. Fewer French families came to Stavanger, and the number of pupils at the school declined. To prevent its closure, Norwegian children were invited to apply for the further education stage. The only requirement was that they had studied French in secondary school – essential since all teaching is in French.
Today, the school has 60-70 pupils, both French and Norwegian, in classes from primary level to the first year of further education. A nursery section caters from children from three to six.
Unlike Stavanger’s French-Norwegian Cultural Centre, which is subordinate to the French embassy, the school is independent. But it cooperates closely with the centre. The latter’s media facility is much used, and the pupils also use the centre’s premises to exhibit art they have created in class.
1According to the French Ministry of Foreign Affairs, the object of Mission Laïque Française is to spread French language and culture by encouraging dialogue between cultures.
1Mission Laïque Française er en organisasjon som driver skoler utenfor Frankrike hvor store franske firma opererer. Formålet er å spre fransk språk og kultur ved å oppmuntre til dialog mellom kulturer. Minestère des Affaires Ètrangères.
Stavanger's French-Norwegian Cultural Centre is the only institution of its kind in Norway outside Oslo. It was established to promote cultural and linguistic exchanges between Norway and France through information, education and collaborative cultural activities. The centre contributes to a broad array of art exhibitions, musical events and the like.
— Small Eiffel tower. Photo: Fotografierende from Pexels
Like similar institutions elsewhere, it is subordinate to the French embassy. But unlike all other bodies of its kind, the cultural centre in Stavanger has introduced a form of bilateral relationship. Its job is not only to make France and the French language better known in the city, but also to raise awareness of Stavanger and Norway among the French.
The centre was inaugurated with due ceremony in 1981. The audience in Kongsgaten 54 included Einar Førde, minister of education and church affairs, Stavanger mayor Arne Rettedal, French ambassador Pierre Dessaux and Pierre Chouzenoux, managing director of Elf Aquitaine Norge. Visiting professor Jacques Blanc at the Rogaland Regional College (now the University of Stavanger) became the centre’s leader, with Nora Smedvig as his assistant. It took less than a year from the time the centre was proposed until it stood ready.
After two years, the centre outgrew the premises in Kongsgaten and a third floor was taken over. It moved in 1989 to modern facilities in Løkkeveien, which include a conference room, classroom, media library and film room. The new building was financed by Elf (now Total), and the company also contributes to the centre’s annual running costs.
According to general manager Marc Ordaz, the centre has a unique collaboration with Total and could not survive without its support. This is provided under a contract renewed every three years. “Total’s backing reveals the French mentality,” says Ordaz. “It demonstrates how important culture is for France and the French.”
The centre had three permanent staff and 12 teachers under contract in 2007. Its three priority areas are cultural exchange, assistance for studies in France, and – most importantly – language courses in French. A large cultural programme is pursued, with events to promote French culture. Scholarships are awarded annually to students in the last year of further education who want to do an extra year of studying in France. The centre has contacts with five French universities in this programme. Language courses are provided at every level, from beginner to advanced conversation. Many Elf/Total employees and their families have had the pleasure of learning French at the centre.
Elf's club system is unusual. Few companies in Norway offer such a varied range of social activities for employees and their families. As early as 1970, the first French employees in Norway had organised their own club which a small fund, library and film showings. The Norwegian employees were naturally invited to join.
— First sailboat in Elf boat club "Albin Vega" 1977. Photo: Elf Aquitaine Norge A/S//Norwegian Petroleum Museum
This was a good way to bring the French and Norwegians together, and the club functioned as a bridgebuilder between nationalities.
The club system was brought by Elf from France, where companies were required to allocate a certain percentage of their payroll budget to social purposes through the “Comité d’Entreprise” (usually translated as works council). Headed by managing director Paul le Rest, the French in the company took the initiative in the spring of 1974 to establish this system in Norway on a more formal basis.
Created in January 1975, the Elf Norge Club was to support and promote social leisure activities for employees and their families, forge stronger links between personnel and the company, and build a good working environment. This move was well received, and virtually all employees belonged to one or more clubs by the end of the 1980s. The most popular were the holiday cottage, art, tennis, sports, riding and boat clubs. This system helped to create the distinctive Elf culture, and was so successful that other companies copied it.
Some clubs had the character of holiday societies which appealed to specific families. That applied, for instance, to the Elf Norge Boat Club. According to the statutes, its object was to encourage members and their families to participate in and learn to enjoy sailing, life afloat and associated activities. Membership was free, but a small fee was charged for using the boats. Various types of craft were acquired – motorboats, lifeboats, yachts and so forth. The club also organised navigation courses.
For its part, the Elf Windsurfing Club possessed both boards and wetsuits. Another holiday club was the Elf Norge Cottage Club, which leased three cabins in Stjernarøy north of Stavanger for use by members. These were maintained by volunteers. Cabins were also acquired at Sinnes in Sirdal. The Elf Caravan Club worked to promote interest in caravan holidays in the broadest sense, and helped members to secure equipment and suitable camp sites. Caravans were purchased, and the club had a site in Sirdal.
Sports clubs were another category, with associations for both team games and individual activities. The Elf Norge Football Club was very active, with a number of teams drawn from company employees and their families. These played in several company football tournaments. The Elf Handball Club was also active in such competitions.
The Elf Tennis Club collaborated with the Stavanger Tennis Club and used its premises. Until the end of 1975, it was able to borrow a corner of the Siddishallen indoor court for a few hours a week. New indoor courts opened at Gamlingen in Stavanger in 1976 and improved the position. These buildings were erected with financial help from Elf. The Elf Norge Table Tennis Club also embraced other sports which did not have their own Elf association, and was based in the bomb-proof cellar of the main building in Dusavik.
Located at the Stavanger Golf Club’s courses on Stokka Lake, the Elf Aquitaine Golf Club possessed several sets of clubs and organised free instruction.
Members of the Elf Bridge Club also met in Dusavik, the Elf Orienteering Club arranged races, and the Elf Ski Club organised weekend outings for both Nordic and Alpine disciplines with equipment for hire at low rates. The Elf Norge Riding Club was one of the biggest in the company, and collaborated with the Stavanger Riding Club at Gimle Farm near the golf course. The club owned a number of horses, including Lady Elf, Delfin, Elf Galvin, Gawin and Miss Elfana, as well as two Iceland ponies – Peer and Paal. Full scuba sets and a Zodiac inflatable boat were available in the Elf Norge Diving Club.
Klubbsystemet, økonomi og samfunn,
Klubbsystemet, økonomi og samfunn,
Klubbsystemet, økonomi og samfunn,
The Elf Norge Cannon Club – officially the Elf Hunting, Shooting & Fishing Club - provided target-shooting rifles and pistols. A miniature rifle range was installed in the cellar of the main building. For hunting, Elf had a duck-shooting area in Sandnes and a terrain for small game in Sand. A small powered plastic-hulled boat and a rifle for big-game hunting were available. Opportunities also existed for hiring more extensive hunting grounds. Where fishing was concerned, the club had sites on the Årdal and Ogna rivers.
A fully-equipped darkroom for developing black-and-white photographs was provided by the Elf Norge Photo Club at Eiganesveien 21. Equipment for developing colour pictures was eventually also acquired. The chemicals for black-and-white photos were free, and members only had to bring their own paper.
The Elf Motor Club’s object was to act as a service for employees by offering spare parts and other accessories at reduced rates. Courses, car testing, competitions and so forth were organised, together with safety and first-aid teaching.
Artwork lotteries were held by the Elf Art Club, while the Elf Music Club had a library of records and tapes which members could borrow cheaply. Music courses were held for those who wanted to learn to play an instrument. Professional teachers could be hired. The club had an orchestra and bands for all its members.
Published August 8, 2018 • Updated October 22, 2020
The Norwegian share of Frigg yielded about 116 billion cubic metres of gas, worth some NOK 200 billion in 2007 money, from the start of production until its cessation in September 2004. When satellite fields are included, production reached 190 billion cubic metres.
Frigg proved to contain no less than 40 per cent more gas than had been estimated when it first came on stream. Seventy-eight per cent of these reserves were recovered. The recovery target set by the Norwegian government for gas from an offshore reservoir is 75 per cent, so that goal was met with a comfortable margin.
Frigg has meant a lot for Norway as a gas nation, for the Norwegian economy and for its licensees. Together with its satellite fields, it has also been highly significant for the UK. From the early 1980s, Frigg supplied almost a third of all gas consumed in the British Isles.
The field also made an important contribution to technological developments on the Norwegian continental shelf and to Norway’s offshore supplies industry.
During Norway's 1986 union-management negotiations on pay and conditions, gas deliveries to the UK were shut down for the first and last time because of a labour dispute. The agreements under discussion covered drilling, catering and operations personnel. All three existing deals expired on 1 April. The employers maintained that prospects for reaching a settlement were good, but said that everyone had to be willing to negotiate.
— "STRIKE". Part of facsimile from Klassekampen 07.04.1986
On the same day that the management side issued this statement, the Catering Workers Union (CAF) – part of the Federation of Oil Workers Trade Unions (OFS) – withdrew from the talks. The employers then broke off negotiations over all three agreements and announced a lock-out. The CAF called a strike on 6 April. In response, the employers instituted a lock-out of all workers covered by the three agreements. The OFS stepped up the strike on 19 April by calling out members of the Union of Operator Employees (OAF) on the UK side of Frigg and shut down gas deliveries to the UK.
Both sides were called in by Norway’s chief state mediator three days later for mediation. This effort broke down, and everyone was summoned to Arne Rettedal, then minister for local government and labour. He made it clear that they had one night to negotiate, and fixed a new meeting for the next day. Since the overnight talks also proved fruitless, the minister informed unions and management on 26 April that the matter would go to compulsory arbitration. This meant the unions had to resume work. Gas deliveries to the UK had then been halted for six days.
One consequence of this conflict was that the Frigg workers undertook not to down tools on the UK side during future labour disputes. Ensuring that a stoppage of this kind did not recur was important for Elf. The company took the initiative on talks between those involved, and a protocol was established. Another nation could not be hit or harmed by disagreements on the NCS. The guarantee given by the workers was incorporated in the agreement on pay and conditions.
Published August 8, 2018 • Updated October 21, 2020