TECHNOLOGY FROM EUROPE

EUROGIF: Advancing environmentally sound oil / gas technologies

Brussels-based European Oil & Gas Innovation Forum (EUROGIF) President Svein T. Wille details the organization’s goals and activities, including its membership of operating / service companies, research institutes, national federations and other oil / gas organizations. Communication with government is discussed, as well as positive efforts with the European Commission. New, industry R&D-related Thematic Networks are described, as well as more detail on plans to enhance industry’s environmentally responsible programs through the European Commission.

Q. Mr. Wille, would you please characterize developments within EUROGIF since we discussed this organization in this feature one year ago?

A. First of all, I would like to thank you very much for the opportunity to present EUROGIF in World Oil for a second time – I hope it becomes a tradition. Regarding your question, there have been four major developments. These will be discussed in the context of further questions and answers. The four developments are EUROGIF’s:

1. Statutory formation, membership, the Brussels office and the seminars we have organized
2. Contacts to, and activities with, the European institutions and other oil / gas-related, Brussels-based organizations
3. Thematic Networks, and
4. Contribution to the 5th and 6th European Framework Program for Research and Development.

The objective for our organization in 1999 was to enter into a phase of organization and consolidation. This was achieved, and EUROGIF is becoming a player in its environment.

The legal structure has to be finally defined according to Belgium’s statutory requirements. A series of proposals lead to signature of the EUROGIF Articles. The group’s board has decided to create eight Belgian nonprofit organizations, demonstrating its objectives in the areas of European cooperation and technical innovation.

With final registration at the Belgian Ministry of Justice, EUROGIF becomes a legal entity – able to fully represent the industry in Brussels and also qualify for several opportunities of funding under EU law.

Q. As now established, what are the organization’s principal activities?

A. The Brussels office has been equipped to support every kind of event, especially seminars, workshops and awareness meetings. It is in a position to gradually support members in their activities in Brussels. The EUROGIF Web page has been established for interested parties and members information.

The idea is, however, that EURO-GIF wishes to establish a "Pan-European cooperation." It is not a central office which provides all services to its members. Member organizations, like the very successful UK Assist, are the closest partners to the companies.

Q. What types of memberships have been adopted, and have new members joined?

A. EUROGIF memberships can fall under one of three categories:

1. Full members – Federations, large contractors and small / medium companies, all belonging to the hydrocarbons supply and services industry sector
2. Associated members – Universities, institutes, operating companies and their federations, and
3. Honorary members – Well, we don’t have any yet.

EUROGIF member contributions are moderate, and membership has been developing smoothly and steadily. It has to be said that membership marketing will be an ongoing process. Many individual discussions were held with representatives of European countries: Germany, Denmark, Italy, Spain, Portugal, Greece and Sweden. But a lot more persuasion must be done until we reach the level of recognition and cooperation desirable and necessary.

The main obstacle for wide-spread recognition is the high degree of fragmentation of the oil and gas suppliers industry in Europe. And with new technologies emerging – like electronics – which are not necessarily related or connected to the industry, the target becomes even more difficult.

During the last year, EUROGIF held several presentations in Paris, Hamburg, Hanover, Madrid and Milan. Seminars were held in Aberdeen with the help of UK Assist, and in Rijswijk with the help of Shell and IRO, our member federation in the Netherlands.

Additional national federations were also contacted and invited to become members such as, in particular, GMT from Germany, Assomineraria from Italy and the Club Espanol de Petroleo. So far, EUROGIF has managed well, and Italy and Germany are – step by step – getting closer to membership. Contacts with Spain are promising, and Denmark is also listening – it will, however, take time and patience.

Contacts with large contractors have been intensified. Kvaerner Oil & Gas, Aker Maritime and ABB are already supporting EUROGIF. We are pleased that companies like Bouygues Offshore from France, and Saipem from Italy have recently joined and are taking an active part in the Thematic Networks.

Among the research institutes supporting us you find: IFP, ENERG, RF Rogaland, Sintef, TNO and Ifremer, just to mention some. At our workshops, several universities were represented, like: Newcastle, Athens, London, Edinburgh and others.

Q. How are your member federations developing?

A. It was interesting to see, especially, the developments of the British oil / gas industry. LOGIC has been created. That is an industry organization that will work with companies throughout the industry to stimulate collaboration and radically improve competitiveness – with a special emphasis to serve the whole "supply chain," including both large and small companies.

CMPT has been replaced by Industry Technology Facilitator (ITF). Its aim will be to set up joint-industry projects (JIPs) by connecting what industry needs with: 1) what researchers and "technology-delivery" companies can provide; and 2) what the public and private sectors want to fund. (See separate ITF feature).

Q. What other oil / gas organizations have been contacted, and for what purposes?

A. OGP and EUROPIA have been introduced to oil / gas supplier industry activities, especially toward EURO-GIF’s R&D activities. This was positively received. Cooperation is daily life for EUROGIF. Shell has been mentioned before. BP Amoco gave an interesting view of its strategic views of oil / gas developments in the North Sea during the seminar in Aberdeen. And Elf and Statoil, like other oil / gas operators, are strongly supporting our activities.

A further important point is under discussion and a topic of cooperation – the industry’s public image. Justified or not, it is, unfortunately, a fact of present life that the oil industry is facing a negative public image, e.g., it is considered to be composed of wealthy, exclusively "shareholder-value-driven job killers."

EUROGIF, as the European representative of the oil and gas suppliers and contractors industry, will contribute actively and very sincerely to improving our technologies, with special emphasis on the environmental impact of our work. We are, therefore, seeking cooperation with research institutes and universities. That is why we have organized so many workshops and seminars. The technologies and innovations of the suppliers / contractors industry have been, and will be, impressive.

A negative image, further, jeopardizes many jobs in our industry. In Britain alone – according to LOGIC information – employment amounts to about 300,000 jobs. Stable employment is, however, the target for many of EUROGIF’s members’ regions.

Q. Has EUROGIF been able to establish contacts with the Parliaments?

A. This is certainly no easy target, for a more formal reason – energy policies are not within the responsibilities of the European Community. Despite the Maastricht and Amsterdam Treaties, energy policies remain under the authority of the national governments. But the Parliaments Committee VI – Industry, External Trade, Energy and Research (INDU) – is involved in many detailed matters.

EUROGIF is now a member of the European Energy Foundation (EEF). It is an informal and neutral forum where topical, energy-related subjects linked to the European Union political dialogue are presented and debated. It organizes meetings and conferences with members of the European Parliament, members and representatives of the European Commission and other EU institutions, as well as experts from industries, associations and organizations involved in the energy sector.

The EEF is the ideal place for communication and regular dialogue with parliamentarians interested in contacts to the energy industries.

Q. Has EUROGIF established a positive representation with the European Commission?

A. The officials of the Commission are very open and interested to learn about technological and economic achievements of the oil / gas industry. The open-door policy is not just a verbal statement, it is reality. There is no problem getting in touch with the Commission. At our workshops, we are well-supported by the officials. The Commission’s representatives always attend our Forum meetings.

As you know, the Commission has been reorganized in some areas, such as the merger of the Directorates Transport and Energy. EUROGIF is expecting the same good cooperation, as was the case before. We have recently been invited by the Directorate Research to nominate specialist advisors for the discussion of specific topics. Our Vice President, Dr. Claude Roulet, is among the members of the external advisory group for the Directorate.

Q. What is the European Commission view toward world energy supply?

A. You certainly refer to the Shared Analysis Project on Energy Policies and the European Union’s Outlook Until the Year 2020. This has many views, and I restrict myself to only one remark. The study has recognized the fact that energy supply is not a solved problem. Energy, of whatever technical or natural origin, is not, anymore, considered an abundant tool for mankind’s survival. Especially, the value of the renewables and their contribution to world energy supply are now seen much clearer than in some previous years. It is now recognized that energy from hydrocarbons will play an important role for many years to come. Furthermore, hydrocarbons – or even renewable energy sources – are often recoverable in areas which cannot be taken as geopolitically stable.

Q. How has the "world of energy" changed in 1999 in your and EURO-GIF’s views?

A. In 1999, the oil price reached a very low level, down to below US$10 per barrel. This development severely affected investments of both the oil / gas operators and suppliers. Under such conditions, it was obviously too expensive to exploit oil / gas from the North Sea reservoirs. Production cost there is still as high as around US$13 per barrel.

The oil price has recovered during the year to an unexpectedly high level. The question remains, however, whether investors will believe in stability or oil-price volatility. Oil price and its repercussions on new developments remain – to my mind – a very important problem!

In Norway, an investment program has been launched called DEMO 2000. The intention is to stabilize investments and foster technological innovation. The program is sponsored by the Norwegian government, oil operators and the Norwegian supply industry. In 1999 and 2000, the government funded 100 million Norsk kroner per year. The same amounts are contributed by the operator / supply industry.

It is now EUROGIF’s intention to establish similar programs in Europe. Like the maritime industries, oil / gas suppliers and contractors will initiate these developments with Thematic Networks.

Q. Please explain what a Thematic Network is? Who can participate?

A. A Thematic Network (TN) is a tool provided by the European Commission (EC) to financially support operation / management of an industry sector "think tank" with the following goals:

• Establish a core team of companies / institutes, representative of their industry segment at the European level
• Define the industry technical vision within the scope of the Fifth Framework Program (FP5)
• Define industry R&D needs and priorities in line with the technical vision
• Coordinate industry actions in the FP5 framework program in line with relevant Key Actions objectives
• Make recommendations to the EC for including relevant Key Actions in the work program, and
• Disseminate information among all industry segment actors at the European level.

The objective is to boost competitiveness of European companies in the related market segment. The Thematic Network is expected to: 1) foster synergy between various industry sectors, enabling the targeting of actions toward main objectives of FP5; 2) ensure a healthy flow of high-quality R&D projects through joint-industry projects (JIPs); and 3) interface with the EC on operation of relevant Key Actions.

EUROGIF and its members have started this work by:

1. Collecting information on specific, TN-interested companies in EUROGIF participants’ countries. Some, like Norway, are very advanced in this already
2. Pre-screening of those companies with the national EUROGIF specialists here in Brussels, considering possible TNs and companies which fit to them and proposing the formation of several TNs based on the lists received
3. Identifying those companies which are considered capable, and asking them whether they are prepared to take the lead in a specific TN
4. Organizing meetings with those companies who agreed to take a project lead to discuss further steps.

On January 25th, the first Networks were started and Network leaders were nominated. These projects are: TN 3: Floating Systems, and TN 4: Surface and Subsea Processing & Systems. Three main tasks for these running networks are now: 1) assess the international state of the art; 2) develop a strategy for the area of interest; and 3) disseminate the results to facilitate creation of R&D consortia. Participants can be every interested company experienced and interested in those areas.

The last workshop was held February 24th in Brussels – there will be more to come.

Q. How do you see EUROGIF’s future?

A. As a simple answer – prosperous. The most important factor for the future is that the oil / gas industry will be the main contributor to the European energy supply for the next 50 to 100 years.

The author

Svein T. Wille, President of EUROGIF and a native Norwegian, earned the MS degree in ship and ship engine building from the University of Trondheim, Norway, in 1960, and started his career in 1961 with ship R&D and design. Assignments later included technical direction of a gas carrier fleet and management of the building of the Havdrill DP vessel. In 1971, as engineering manager for the Aker Group, he designed A-H3 semisub rigs. From 1981 – 1984, he evaluated ships / casualties for the Scandanavian Marine Claims Office in New York. He served as president of ABB Norway, Global Engineering and, in 1996 was advisor to the ABB Group. He assumed his present position with EUROGIF in 1998.