Topsides assembly and contract problems

person Finn Harald Sandberg, Norwegian Petroleum Museum
Stavanger’s Rosenberg Verft yard won the job of assembling the Draugen topsides in early 1990. This massive jigsaw formed an integrated structure, with components and equipment packages put together at the construction site.
— The construction of Draugen topside takes place at the Aker Rosenberg Shipyard at Buøy in Stavanger. Photo: A/S Norske Shell/Norwegian Petroleum Museum
© Norsk Oljemuseum

Design

The topsides were originally intended for a floating production platform, which meant they were much lighter than a traditional complex used on a fixed installation.

That in turn proved appropriate for a concrete gravity base structure (GBS) with a single support shaft, since it would keep stability during towout within safety requirements.

The topsides were 79 metres long, 59 metres wide and 15 metres high (figure 1). Their quarters section was almost 23 metres tall and contained 130 berths.

During earlier projects, the Rosenberg yard – part of the Moss Rosenberg Verft (MRV) company – had used four specially built concrete cylinders to support the topsides structure.[REMOVE]Fotnote: Statfjord industrial heritage – Building the Statfjord B topside

Standing in the water alongside the dock, these pillars were intended to imitate the shafts of the GBS which the topsides would rest on – as with the Statfjord and Gullfaks structures.

However, the Draugen platform only had one shaft. In addition, the top of this monotower was larger than earlier points of contact and virtually square.

That presented a challenge which had to be overcome before assembly work could begin. The answer proposed was a kind of both-one-thing-and-another solution.

To accommodate barges to float the completed topsides to nearby Vats for mating with the GBS, two of the four concrete cylinders had to be placed at the seaward edge of the structure.

These stood immediately beneath the quarters section, and were supplemented by smaller concrete blocks supported by steel tubes and positioned on the seabed to imitate the top of the monotower.

Similar blocks were also spaced along the edge of the support frame to distribute the topside weight and thereby avoid damage. They could easily be removed to let the barges in (figure 2).

Construction

The detail engineering job for the Draugen topsides had been awarded in 1989 to Kværner Engineering. Like MRV, this company was a member of the Kværner fabrication group.

Covering the drawings used in tendering for and building the topsides, this contract was signed by project director Mahdi Hasan for Shell and senior executive Hans Jørgen Frank for Kværner.[REMOVE]Fotnote:  Interview with project director Mahdi Hasan, 11 August 2018.

This pair also put their names to the construction and outfitting assignment for the topsides when it was awarded to MRV in early 1990.

Since both design and construction were to be carried out by companies in the same family, the prospects for a positive outcome looked promising.

Computers at the engineering and fabrication firms talked the same language, allowing them to communicate. With such intimate collaboration, the job should have presented no problems.

Nevertheless, this proved yet another offshore development where the design drawings were less than perfect – as had been the case in several projects off Norway during the 1980s.

The latter had experienced major cost overruns, in part because of variation orders (VOs) during the construction phase. On Draugen, the flow of these amendments seemed endless.

The yard faced problems dealing with all the changes to the drawings, with disruptions and discontinuities affecting assembly. Both time and costs became difficult to control.[REMOVE]Fotnote: Nerheim, Gunnar, Jøssang, Lars Gaule and Utne, Bjørn Saxe (1995). I vekst og forandring – Rosenberg Verft 100 år: 442-443.

In fact, awarding these two contracts to companies in the same group may have contributed to the disagreements which arose during the construction period.[REMOVE]Fotnote: Interview with Sigbjørn Ellingsen, production vice president, Rosenberg Verft, 19 January 2017.

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"Embarrassing for Shell, worse for Kværner". From Stavanger Aftenblad 13.01.1996

The topside was originally costed at NOK 1.1 billion, but the bill had almost doubled to NOK 2.1 billion when Shell took delivery at the towout in February 1993.[REMOVE]Fotnote: Stavanger Aftenblad, 13 January 1996, “Pinlig for Shell, verst for Kværner”.

MRV’s contract was a pure construction job. This meant that all proposals for variations from the design drawing – from minor improvements to major conversions – had to be approved by Shell.

The Rosenberg yard accordingly sent such suggestions to the client, who then had to pass them to the engineering company for redrafting.

However, Shell’s project team took the view that these proposals should go directly to Kværner Engineering and be sorted out between the two group companies.

That approach would have been similar to the one used in the integrated engineering, procurement and construction (EPC) assignments which had become common in Norway’s offshore sector.

This was precisely what Shell had envisaged and hoped would happen when it awarded both contracts to two companies in the same group.

These two different interpretations of the contractual relationship meant that VOs piled up without being dealt with, and work at the yard was delayed by the absence of a response.

Although this bottleneck was eventually resolved, a lot of critical time had been lost and it became important to speed up the remaining work.

But disagreement over the contract persisted, and the final bill had to be settled by arbitration. This process dragged out, and took three years to bring to an end on 11 January 1996.[REMOVE]Fotnote: Stavanger Aftenblad, 13 January 1996, “Pinlig for Shell, verst for Kværner”.

On behalf of the licensees, Shell had originally claimed NOK 1.47 billion from Kværner. This was later reduced to NOK 576 million.[REMOVE]Fotnote: Aftenposten, 13 January 1996, “Draugenseier til Kværner”.

Shell based this demand on allegations of intentional or grossly negligent material breaches of the contract by Kværner, but these were dismissed by the arbitration tribunal.

Kværner secured extra compensation of NOK 113 million because Shell had demanded an acceleration of the work, which meant the yard had to take on more personnel than originally planned.[REMOVE]Fotnote: Dagens Næringsliv, 13 January 1996, “Shell tapte mot Kværner”.

Although the hearing ended in victory for Kværner, local daily Stavanger Aftenblad still headlined a comment by journalist Arnt Even Bøe: “Embarrassing for Shell, worst for Kværner”.

He wrote that this case and others still to be resolved meant that the group had earned itself a reputation as the company which took legal action against its customers.[REMOVE]Fotnote: Stavanger Aftenblad, 13 January 1996, “Pinlig for Shell, verst for Kværner”.

[1] Statfjord industrial heritage – Building the Statfjord B topside

[2] Interview with project director Mahdi Hasan, 11 August 2018.

[3] Nerheim, Gunnar, Jøssang, Lars Gaule and Utne, Bjørn Saxe (1995). I vekst og forandring – Rosenberg Verft 100 år: 442-443.

[4] Interview with Sigbjørn Ellingsen, production vice president, Rosenberg Verft, 19 January 2017.

[5] Stavanger Aftenblad, 13 January 1996, “Pinlig for Shell, verst for Kværner”.

[6] Stavanger Aftenblad, 13 January 1996, “Pinlig for Shell, verst for Kværner”.

[7] Aftenposten, 13 January 1996, “Draugenseier til Kværner”.

[8] Dagens Næringsliv, 13 January 1996, “Shell tapte mot Kværner”.

[9] Stavanger Aftenblad, 13 January 1996, “Pinlig for Shell, verst for Kværner”.

Published October 29, 2018   •   Updated December 19, 2018
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Arbitration win for Kværner

person Finn Harald Sandberg, Norsk Oljemuseum
A big battle was fought over the bill for fabricating the Draugen platform topsides at the Kværner Rosenberg yard in Stavanger. The dispute ultimately had to be settled by arbitration.
— Draugen topside at Rosenberg Verft in Stavanger. Photo: A/S Norske Shell/Norwegian Petroleum Museum
© Norsk Oljemuseum

After four years of wrangling, the outcome was that A/S Norske Shell had to pay a total of NOK 311 million on behalf of the field’s licensees.[REMOVE]Fotnote: NTB, 12 January 1996, “Shell tapte voldgiftssak om Draugen-dekket”.

NOK 2.1 billion had already been paid following delivery of the structure from the Kværner yard in February 1993, but the two sides could not agree on the final amount.

They had continued to negotiate on a number of issues related to this settlement, and managed to resolve most of the matters in contention.

However, stalemate was reached in the autumn of 1994. Claims and counterclaims were presented, and one of the biggest arbitration hearings in Norwegian legal history began that August.

Kværner had originally claimed NOK 200 million in compensation for forcing the pace of fabrication work – a demand later reduced to NOK 165 million.

For its part, Shell maintained that the yard had breached the contract either deliberately or through gross negligence, and presented a compensation claim of NOK 1.47 billion.

Voldgiftsdom i Kværners favør, avis, faksimile, engelsk,
"Shell lost to Kværner" from Dagens Næringsliv 13. January 1996

This was later restricted to NOK 576 million on condition that the Draugen licensees were allowed to retain a bank guarantee of NOK 198 million.[REMOVE]Fotnote: Dagens Næringsliv, 13 January 1996, “Shell tapte mot Kværner”.

The final adjudication rejected Shell’s claim, thereby handing Kværner a complete victory. Shell had to pay NOK 113 million for the bank guarantee and as a supplement for extra work. In addition came interest and legal fees.

According to communications vice president Atle Kigen at Kværner, this settlement was worth NOK 225 million to the group in 1995-96.[REMOVE]Fotnote: Aftenposten, 13 January 1996, “Draugenseier til Kværner”.

Published October 24, 2018   •   Updated November 13, 2018
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Drilling on Draugen – a completely new concept

person Finn Harald Sandberg, Norwegian Petroleum Museum
Great emphasis was placed by Norske Shell on safety and the working environment when the drilling module for the Draugen platform came to be developed.
— Boretårnet til Draugen plassert på Forus. Foto: Ukjent/NOV
© Norsk Oljemuseum

The operator decided to drop the detailed design requirements which had been usual since the early 1980s, and opted instead for the recommendations made by Norway’s Norsok project.

Intended to enhance the competitiveness of the Norwegian continental shelf, the latter had come out in favour of performance-based specifications for offshore facilities.

Setting clear demands for user functionality, safety and the working environment, without going into details, would offer cheaper, more efficient and safer solutions.[REMOVE]Fotnote: Nytt fra A/S Norske Shell, summer 1992, “Nytt borekonsept for internasjonalt marked”.

Norske Shell required that analyses were conducted with the work operations and crew most vulnerable to accidents, and how such incidents could be avoided.[REMOVE]Fotnote: Nytt fra A/S Norske Shell, summer 1992, “Sikkerhet og arbeidsmiljø i sentrum”.

The attention devoted to safety and performance-based requirements gave the newly formed Hitec-Dreco joint venture the opportunity to turn its innovative ideas into reality.

These in turn would create a new generation of drilling rigs for fixed offshore installations worldwide.

One member of this partnership, established in 1989, was Hitec, a Stavanger-based specialist in instrumentation, electrical engineering and computer systems.

The other was Canada’s Dreco, which delivered all types of drilling equipment to the global market. This company also had experience of tough climatic conditions from delivering modularised rigs for Arctic exploration.

John McGill was in many respects the pivotal figure in this new constellation, and served as Hitec-Dreco’s chief executive during the first few years.

After leaving a Norwegian drilling company in 1987, he had many ideas about how equipment could be improved in terms of safety and the working environment. And these proposals would not least involve big reductions in both weight and price.

A plethora of new ideas was put forward when the joint venture got started. Not all of these were equally good – most were actually rejected.

But a good climate of cooperation between the two teams yielded very interesting concepts. When the invitation to tender for Draugen arrived, a creative forum could come up with viable options.

The drilling module was not to have a long life on the platform. It was removed in 1997 and subsequently had an interesting career. Read more about where the rig ended up.

Published October 19, 2018   •   Updated October 19, 2018
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The Draugen Reservoir

person Finn Harald Sandberg, Norwegian Petroleum Museum
Draugen lies in block 6407/9. Included in the eighth licensing round in the autumn of 1983, it was awarded the following March to Shell as operator and partners Statoil and BP.
— Illustration showing the different layers in the Draugen resevoir. Illustration: A/S Norske Shell/Norwegian Petroleum Museum
© Norsk Oljemuseum
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Illustration showing the different layers in the Draugen resevoir. Illustration: A/S Norske Shell/Norwegian Petroleum Museum

The field was discovered by the very first wildcat. This initial exploration well was plugged and abandoned six months after the award of the production licence.

Running in a north/north-westerly direction, Draugen is about 21 kilometres long and six wide. Its reservoir lies about 1 600 metres beneath the surface and is typically 40-50 metres thick.

Oil is found in the Rogn and Garn formations, which date from the Late and Middle Jurassic.[REMOVE]Fotnote: A/S Norske Shell (September 1987) Plan for development and operation (PDO). Six wells were drilled to determine field size and extent before the plan for development and operation (PDO) was submitted.

At an early stage in maturing Draugen, ahead of the PDO, stock tank oil initially in place (Stoiip) was put at 1.1 billion barrels with an estimated recovery factor of 30-40 per cent.[REMOVE]Fotnote: Note dated 14 July 1986 from J van der Burgh, Shell EP.

Geology

Before an oil field can be brought on stream, it has a long history. First of all, the geologists must determine that three basic requirements are present.

  1. Deposition of permeable and porous sandstone where oil can accumulate – reservoir rock.
  2. Sediments where oil can form initially – source rock.
  3. An impermeable layer lying over the reservoir which prevents the oil from leaking out – cap rock.

On Draugen, the Rogn formation provides the main sandstone reservoir while the cap and source rocks are the same – the Spekk claystone formation.

The Rogn interval was laid down on top of Spekk clay around 150 million years ago, during the Late Jurassic period. Europe and America/Greenland were still close to each other then, and the water depth ranged from a few metres to 20 metres – very different from today’s 250 metres.

At that time, dinosaurs and other reptiles were the only big animals in the area which was to become Draugen. No fossils of these creatures have been found, but some cores have shown signs of trees.

The oil lies in the pores between sand grains ranging in size from crystals of table salt to small peas. Most are similar to the eggs in cod roe (rogn in Norwegian – hence the formation’s name).

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Stratigraphy over the Haltenbanken area.

As the sea level rose, further Spekk clays were deposited over the sand and eventually formed a carpet impenetrable to liquids and with a high content of organic materials.

These derived from the remains of microscopic plankton (algae), which render the Spekk shale dark. The clay is even a little radioactive.

Under the right conditions, the organic deposits also give rise to oil. Before this crude can escape from the shale, it has to be warmed up a good deal.

Burial of the Spekk formation under 2-3 000 metres of rock or more meant that the temperature generated from the Earth’s natural heat became high enough to cook out the oil.

However, the area where Draugen lies today has never been buried more than about 1 600 metres beneath the seabed. That was never deep enough for crude to form.

But the rocks lay much deeper to the west of the field, and this is presumably where the Draugen crude comes from. It has migrated under the Spekk cap rock to the points nearest to the surface.

This process is driven by the force of gravity – oil floats on water, and rises until it meets an impermeable barrier.[REMOVE]Fotnote: Knipsheer, Jan Hein (1994). Geologien på Draugenfeltet, EPOinfo no 3: 11. The neighbouring Njord and Heidrun fields derive from the same source.

Published October 12, 2018   •   Updated October 16, 2018
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Money machine

person Finn Harald Sandberg, Norwegian Petroleum Museum
The Draugen platform has produced oil and gas with an overall value of roughly NOK 250 billion over the 25 years since it came on stream.
— Photo: Frank Berglund/Norwegian Petroleum Museum
© Norsk Oljemuseum

The field was discovered in 1984 in a highly permeable structure which has since proved to be an extremely productive reservoir. It soon became a candidate for development at a time when new discoveries had to queue up to secure official authorisation.

The Norwegian government had only opened the Norwegian Sea to oil and gas operations relatively recently, and a number of partnerships were drilling wildcats in the area.

Many groups had been against extending exploration to new areas of the Norwegian continental shelf (NCS), and thereby crossing the barrier represented earlier by the 62nd parallel.

This opposition reflected fears – which have since proved groundless – that the rich fisheries in the Halten Bank area could be harmed.

In fact, the fishing and petroleum industries have demonstrated that they are able coexist harmoniously in the Norwegian Sea.

When Draugen began producing oil on 19 October 1993, it was expected to yield almost entirely oil – some 430 million barrels or 68 million standard cubic metres of oil equivalent (scm oe).[REMOVE]Fotnote: Norwegian Petroleum Directorate, Facts, 1983.

Since then, the recoverable amount has been increased to about 140 million scm oe.[REMOVE]Fotnote: Norwegian Petroleum Directorate website, fact pages fields, 1 October 2018.

store verdier, graf,
Figure 1

Operator A/S Norske Shell has also made changes to its production facilities over these years.

The upshot of these alterations is that daily output has been significantly increased since the field first came on stream. Read more about capacity increases and updating.

Figure 1. Annual production peaked in 2001, the year after gas output and export was included.[REMOVE]Fotnote: Norwegian Petroleum Directorate website, fact pages fields, 1 October 2018

Figure 2. Draugen has produced assets worth almost NOK 250 billion in all since 1993. These revenues are calculated on the basis of a production profile obtained from the Norwegian Petroleum Directorate’s fact pages in the autumn of 2018 and an annual average oil price taken daily from Norwegian business newspaper Dagens Næringsliv.

store verdier, graf,
Figure 2
Published October 12, 2018   •   Updated October 17, 2018
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Working life on Draugen

person by Gunleiv Hadland, Norwegian Petroleum Museum
The Draugen platform stands by itself out in the Norwegian Sea, with no other fixed facilities close by. Those who work there have been concentrated together in a confined space.
— Gas measurement at Draugen (2012). Photo: A/S Norske Shell/Norwegian Petroleum Museum
© Norsk Oljemuseum
arbeidslivet på draugen, engelsk,
Work at Draugen. Photo: Jan Soppeland/Norwegian Petroleum Museum

Many of the field’s personnel have worked there for many years, making them thoroughly familiar with the installation and allowing close ties to be developed between colleagues.
When Draugen came on stream in 1993, 43 people per shift were expected to be sufficient for normal operation. Their jobs covered managing the process, maintenance, catering and cleaning, medical care and safety.
Most of these personnel are employed by Norske Shell or the catering company. The workforce can expand considerably when major maintenance or conversion work is underway.

Rotation

arbeidslivet på draugen, engelsk,
Maintenance work on Draugen. Photo: Jan Soppeland/Norwegian Petroleum Museum

Draugen employees work offshore for two weeks, followed by four weeks off on land. They do 12-hour shifts, either day or night, and their working hours over a year compare with those of an industrial worker on land.

Generally speaking, a shift runs from 07.00 to 19.00, and from 19.00 to 07.00. Work is planned so that as much as possible is done by the day shifts. Three shifts, each working two weeks at a time, are needed to get the tour rotation to work.
Since a new team takes over responsibility and jobs every other week, logging and documentation of work done, irregularities and plans are crucial.

arbeidslivet på draugen, engelsk,
Photo: Jan Soppeland/Norwegian Petroleum Museum

When a different person comes out to work, they need to know what has happened over the four weeks since their last tour. So time was devoted to recording and reporting.
During the early years on stream, this could take the form of logbooks kept on the platform. Logs have subsequently become computerised, making them also available to the land organisation.
As communication via radio links and data transfer has improved, computerisation has provided enhanced support in ensuring the continuity of work at shift changes.
The team on land has access to the same computer systems used offshore, and follow up activities on the platform through such technologies as videoconferencing.

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Leisure fishing can give a great catch. Nurse, Vidar Hoem, has gotten common lings on the hook. Photo: A/S Norske Shell/Norwegian Petroleum Museum

During their offshore tours, employees are part of a community which lives and works in one place. Draugen is a 24-hour society, in that workers also spend their leisure hours there.
The latter are largely devoted to eating meals and getting enough sleep. But some time is available for talking with colleagues and reading the papers.
A number of leisure activities are also provided on the installation, with a welfare committee made up of enthusiasts elected by the workforce.
This organises film shows, golf in a simulator, computer games, song and music, arts and crafts and angling.[REMOVE]Fotnote: A/S Norske Shell (2005) Shell Drift Draugen, brochure. The gym is the most popular leisure provision on Draugen.

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Leisure time in the gym at Draugen. Photo: Jan Soppeland/Norwegian Petroleum Museum

Personnel travelling out to the platform are now allowed to bring their mobile phone. This can only be used in the living quarters, but has made it easier to keep in touch with family and friends on land. A dedicated wireless network has been installed to cover the living quarters.[REMOVE]Fotnote: http://www.draugen.in/velferdsnett/
At one time, mobile phones were prohibited on all Norway’s offshore facilities because they could interfere with helicopters, or exploding batteries could serve as an ignition source.
Control of the information flow provided another important reason for the restriction. The company was concerned about what information – or disinformation – could be sent ashore and create uncertainty and needless fears.
Mobile phones are still banned from the production area, precisely because of concern about possible battery explosions and disruption of electronic instrumentation.[REMOVE]Fotnote: Teknisk Ukeblad 7 November 2013, Derfor må mobilene bo på hotell,.  https://www.tu.no/artikler/derfor-ma-mobilene-bo-pa-hotell/233850.

Under control

det er ikke lett med sommertid, forsidebilde, engelsk,
Draugen control room. Photo: Shadé Barka Martins/Norwegian Petroleum Museum

The central control room (CCR) is the platform’s heart and nervous system, and can monitor, govern and regulate the whole production process with the aid of a comprehensive computer system.
It runs the process and safety systems, which involves continuous supervision of operational equipment – including fire and gas detection as well as safety systems such as fire pumps and emergency power.
A minimum of two operators must be in the CCR at all times to facilitate planned work on the production facilities as well as responding to messages and alarms.
These personnel are also responsible for monitoring and controlling the loading of oil into shuttle tankers.
The CCR has a number of work stations, allowing operators to monitor and work on several systems simultaneously. More than two of them can be on duty when things get hectic.

Handover procedures between day and night shifts are just as important as they are when tours are being rotated offshore and to land. When the night shift is due to take over, meetings are held with the day shift before it stands down. Held in a room adjacent of the CCR, these review jobs done and planned, and the work permits (WPs). The WP represents an important document on offshore facilities. They are designed to ensure that all risk-related aspects have been taken into account. That covers the planning, approval, preparations, execution and completion phases. All activities are thereby coordinated, with information given on hot work or closed areas/equipment and taken into account when doing other types of jobs.
All WPs must be approved by the operations supervisor or the offshore installation manager (OIM).

Most of the process on the platform is automated – not least shutdowns. If abnormal values are measured by the detectors, the whole process plant will automatically cease running.
If such an emergency shutdown (ESD) or other crisis occurs, the CCR operators are trained to handle them. That plays an important role in safety and risk management work on Draugen.
A number of closed-circuit TV (CCTV) cameras are installed on the platform, allowing the CCR operators to follow physical events out in the process.
Since the platform came on stream, the CCR has been converted and upgraded a number of times. Bigger computer monitors and newer control software have been installed.
These upgrades have been carried out in consultation with the CCR operators in order to ensure that they provide the best possible workflow.[REMOVE]Fotnote: Raaen, Stine N (2015), Team Situation Awareness in Practice, MSc theses in cybernetics and robotics, Norwegian University of Science and Technology (NTNU): 60.

Arbeidslivet på Draugen, engelsk,
Work in the CCR in connection with the upgrading which occurred in 2013. Photo: A/S Norske Shell/Norwegian Petroleum Museum
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The Draugen CCR in 2000. Photo: A/S Norske Shell/Norwegian Petroleum Museum

The meeting room is linked to the CCR, and contains systems for videoconferencing and collaboration with the land organisation. It also serves as an emergency response centre.

(pic)
Screen capture from the film 1-2-3 Vi er med! produced for a campaign launched by the Draugen operations organisation in 1994.

Land organisation

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Operations organization at Råket in Kristiansund. Photo: A/S Norske Shell/Norwegian Petroleum Museum

The operations team on land is structured to support work on the platform, and performs the administrative duties which do not need to be done offshore.
It includes experts on the various activities pursued on the field, and additional capabilities can be acquired as and when required. The specialists on land can decide on the action to be taken in meetings with the offshore organisation.

One factor which attracted particular attention in the first phase after the field came on stream was the challenges faced in getting sea and shore to collaborate.
These problems could be related to the slow performance of computer systems and lines of communication, and inappropriate reporting structures.
One approach to improving collaboration and understanding between the two sides has been to post offshore personnel to the operations office on land for periods.[REMOVE]Fotnote: Conversation between production technician and acting chief safety delegate Jan Atle Johansen and Gunleiv Hadland from the petroleum museum on the Draugen platform, 7 March 2017.This means staff in Kristiansund have practical experience of working conditions on the platform, allowing them to conduct planning and administration related to work offshore.
Since the operations centre on land was opened in 2007, provision has been made for monitoring Draugen production from there – particularly on the night shift.
Should unusual incidents occur on the platform during these hours, key personnel from the day shift are called out until the position has been clarified.[REMOVE]Fotnote: A/S Norske Shell, 10 April 2003, Draugen organisasjonsendring. Konsekvensvurdering – Produksjonsleder Natt.
The land organisation has departments for logistics, contracts and procurement, human resources, maintenance, production support, and filing and document management.[REMOVE]Fotnote: A/S Norske Shell (2005) “Driftsavdelingen i Kristiansund”, Shell Drift Draugen brochure.
One example of a function which has been transferred from field to land is the switchboard for handling external telephone calls to the platform.
The work of planning personnel resources in connection with sickness, leave of absence and extra activities has also been moved ashore.
Sea-shore collaboration has been boosted by the process simulator at the Kristiansund office, which was included in the development plans as early as 1987 for personnel training.[REMOVE]Fotnote: Draugen impact assessment, September 1987: 22.
This facility was constructed with control systems which mimicked those in Draugen’s CCR, and it could be used before the field came on stream to test management of the process.[REMOVE]Fotnote: Draugen magasinet, no 2 1993, “Simulatoren brukt som testverktøy”, A/S Norske Shell E&P operations department.
Everyone employed as a production operator was trained in the simulator, and had to demonstrate at the end of the course that they could shut down and restart the wells.
A training plan was tailored for each person. Using the simulator, they could make mistakes and practise until they were proficient.
Operators could only start working on the platform after their competence had been approved by the instructors attached to the simulator.
Day courses have also been organised so that operators on their way out to the platform can be informed about updates since they were last at work.
When changes were made out on Draugen, the simulator was updated accordingly and, if necessary, the alterations could be tested before being introduced offshore.[REMOVE]Fotnote: Interviews between Nils Gunnar Gundersen and Gunleiv Hadland from the Norwegian Petroleum Museum, 27 October 2016 and 1 November 2017.

Training in this facility has played an important role in educating the production operators, and has been extended through their work out on the platform.

(pic)
Reviewing the process on the platform in the simulator at Råket in Kristiansund. Training supervisor Geir Solberg is in the foreground. Photo: Engvik/Norske Shell/Norwegian Petroleum Museum NOM (NOMF-02784.046)

Maintenance and turnarounds

arbeidslivet på draugen, engelsk
Maintenance work in the Draugen process facility. Photo: A/S Norske Shell/Norwegian Petroleum Museum

As much maintenance work as possible on a platform like Draugen is preventive, and planned to avoid the need to take corrective action – in other words, repair a fault after it has occurred.
Maintenance based on fixed intervals includes such activities as replacing seals, filters and other components exposed to wear and tear.[REMOVE]Fotnote: Pedersen, Vikse and Tingvold (2017): Vedlikeholdsanalyse RCM hos Shell, BSc thesis, Molde University College: 9.

This is the same approach as the one taken with a car which gets serviced at regular points, where parts are replaced after a specified number of kilometres driven or time passed.
Roughly 150 different safety valves are in use on Draugen, for example, tailored to various sizes and pressures. These get replaced during production shutdowns or maintenance campaigns.[REMOVE]Fotnote: Pettersen, Victoria C F and Sæter, Karina L, 1 July 2014, RFID-merking av sikkerhetsventiler: Forbedring av informasjonsflyt i vedlikeholdsprosesser på Nyhamna, BSc thesis in petroleum logistics, Molde University College.

arbeidslivet på draugen,
Wellhead at Draugen photographed 09.11.2001. Photo: A/S Norske Shell/Norwegian Petroleum Museum

Maintenance work on Draugen is organised on the basis of an inspection programme which specifies equipment checks at certain intervals and is coordinated by computer systems.
The programme lists components where critical faults could arise and which must receive particular attention during maintenance. Other items can be assessed as safe to leave until they fail, and are only replaced then.
An initial version of the inspection programme was established in the spring of 1993, even before the field came on stream, in a collaboration between Møre Engineering, Liaaen and CorrOcean.[REMOVE]Fotnote: Tidens Krav 12 May 1993. “Møre Engineering: Fra bygging til drift”. Supplement on industry in Nordmøre.

Much of the equipment is continuously supervised by a computerised condition monitoring system (CMS). Analysing data from the process plant can detect whether something is wrong.
Also set up to notify abnormal temperatures, this condition-based maintenance (CBM) solution avoids having to open up the equipment to check for faults.
Once the CMS has provided such notification, the load on the relevant component can be reduced until it can conveniently be replaced.
The operator on the platform reports to the technical supervisor, who contacts the responsible manager on land in turn.[REMOVE]Fotnote: A/S Norske Shell (2005) Shell Drift Draugen, brochure. They can then jointly assess the action to be taken.
Production operators on Draugen routinely tour the process areas with the emphasis on identifying anything abnormal, and experienced people can detect leaks early simply by the smell.[REMOVE]Fotnote: Werner Frøland, team coordinator at Draugen in film Norske Shell 100 years. 1912 -2012

Arbeidslivet på Draugen, engelsk,
Equipment on Draugen labelled for an annual check. Photo: Jan Soppeland/Norwegian Petroleum Museum

Planning maintenance tasks has made it possible to concentrate such work at times when production from Draugen is shut down. These periods are known as “turnarounds”.
Production from the platform has been suspended for roughly 14 days every other year – or once a year in the event of major projects.
This shutdown is partly intended to make it possible to perform inspection and maintenance in areas of the platform which are difficult to access during production.[REMOVE]Fotnote: NRK Møre og Romsdal (Bruker milliarder på produksjons-stans https://www.nrk.no/mr/draugen-stenger-i-19-dager-1.7626438
A dedicated team in the operations organisation on land will have been responsible for planning the work to be carried out during a turnaround. Equipment, extra personnel and required materials need to be ordered well in advance in order to be available at the right time.[REMOVE]Fotnote: Shell Drift Info Draugen and Ormen Lange no 5, 2006, “Vedlikeholdsstans krever ett års forberedelse”: 9.

Arbeidslivet på Draugen, engelsk,
Maintenance work on Draugen in 2008. Photo: A/S Norske Shell/Norwegian Petroleum Museum

A turnaround is usually scheduled for the summer season so that weather conditions are as good as possible during this period of concentrated work.

The scope of maintenance grows as a platform ages, and doing it takes longer. Wear and tear can lead to failures and faults, and cause accidents or unwanted shutdowns if not detected in time.
With the need to replace all or part of equipment items increasing over time, the attention devoted to continuous improvement and maintenance efficiency also rises.
Contracts have been awarded to Aker Solutions and Aibel for work on maintenance and modifications, and these companies provide additional personnel to help carry out such work.

Catering

arbeidslivet på draugen, engelsk,
Catering staff at Draugen provide clean towels. Photo: A/S Norske Shell/Norwegian Petroleum Museum

The platform’s catering personnel are responsible for such activities as food preparation and cleaning, and are employed by external contractors. Nevertheless, they have been incorporated in the permanent offshore organisation, shown on organograms and included in presentations of the workforce.
That has reflected a desire to minimise the distinction between Shell employees and catering personnel,[REMOVE]Fotnote: Interviews between Nils Gunnar Gundersen and Gunleiv Hadland from the Norwegian Petroleum Museum, 27 October 2016 and 1 November 2017.and the latter have felt an integrated part of the team from the start.[REMOVE]Fotnote: SSP.OKS’EN no 3, 1994, “Draugen- Min Arbeidsplass”, Mai Breivik, catering assistant
In collaboration with the platform nurse, catering staff also have roles in first aid, emergency response and drills for this.[REMOVE]Fotnote: Conversation with nurse Carina Løvgren on the Draugen platform, 7 March 2017. A small organisation means people have supplementary duties, particularly if a crisis occurs.
Once a year, personnel practise establishing an emergency sick bay in the mess. Installed in cooperation with the nurse, this facility is dimensioned for up to seven injured people.

Arbeidslivet på Draugen, engelsk,
First-aid drill carried out jointly between catering personnel and the nurse. Photo: Shadé Barka Martins/Norwegian Petroleum Museum

From offshore to onshore

The operations organisation has been split between platform and land, but a trend in working life on Draugen is the transfer of jobs to the onshore team. This has meant a gradual reduction in permanent staffing offshore. Heavy-duty maintenance and major projects are assigned to limited periods during the summer, when extra personnel and specialists on the relevant work are sent offshore.

Photo: Working at Draugen

Photo: Leisure time at Draugen

Published October 10, 2018   •   Updated October 18, 2018
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Operation of Draugen

person Gunleiv Hadland, Norwegian Petroleum Museum
The Norwegian Storting (parliament) decided as early as 1988 that Draugen’s operations organisation would be located in Kristiansund. But it takes time to build up a completely new team.
— The Shell building at Råket was ready for use in 1992. Photo: Heine Schjølberg/Norwegian Petroleum Museum
© Norsk Oljemuseum
den store flyttesjauen, flyttelass, engelsk,
The operation centre for Draugen is moving from Risavika in Stavanger to Råket in Kristiansund. Photo: A/S Norske Shell/Norwegian Petroleum Museum

Planning accordingly started in 1989 at Shell’s offices in Risavika outside Stavanger, with a constant eye to moving the organisation north in due course.

That occurred during the summer of 1992, when staff and their equipment were moved to Kristiansund. The operations team was fully in place at the new Råket office on Monday 10 August.[REMOVE]Fotnote: Stavanger Aftenblad, 8 August 1992, “Mandag bor de i Kristiansund. 200 ansatte i Shell flytter nordover denne helgen”.

drift av draugen, engelsk,
Pakistani Zia Janjua had only just seen Kristiansund. He was one of the 30 international Shell employees who moved to Kristiansund to work with Draugen. Photo: Tidens Krav/Norwegian Petroleum Museum

Work in the new organisation could therefore get going fully ahead of the start to production from the platform in the autumn of 1993. (Read more in the article on the big move.)

The challenge in building up the team was to strike a balance between local and expatriate personnel as well as contract staff. While one aim was to recruit as many people as possible from mid-Norway, additional competence had to brought in.

As part of the global Royal Dutch/Shell group, Norske Shell could draw on expertise and experience from the international organisation.

A number of expatriates were assigned to Norway and Draugen, and their know-how was important in the start-up phase. Over time, however, they were replaced with locals.

Norske Shell also had an operations organisation for its refinery at Risavika, and personnel from there were recruited to staff the Draugen outfit.

Minimum

The operations group for an offshore platform is split between office and support functions on land and the workforce on the facility itself.

In the Draugen case, an early decision was taken to locate as much of the work as possible onshore. Offshore staffing would be kept to a minimum.

drift av draugen, engelsk,
Work in the process area. Photo: Shadé Barka Martins/Norwegian Petroleum Museum

Plans called for the platform to be run directly by 43 people per shift. With three shifts, that added up to a total of 129 personnel in the organisation.

Due to handle normal operation and limited maintenance assignments, this staffing represented a big reduction from similar facilities on the Norwegian continental shelf (NCS).

Since Norske Shell was not the operator for any other producing fields off Norway, it was easier to take new approaches to Draugen’s organisation.

Such a small staffing would require contractors to be hired for all work outside normal production – catering, drilling, planned maintenance and modifications.[REMOVE]Fotnote: Telephone conversation between Gunleiv Hadland, Norwegian Petroleum Museum, and Gunnar Ervik, 26 April 2017.

Operations head Terje Olsen presented the philosophy for operating Draugen in a speech to the Halten Bank conference in March 1992.[REMOVE]Fotnote: Terje Olsen, operations head A/S Norske Shell E&P (1992), “Drift av Draugen og bruk av lokale og regionale leverandører”,  Halten Bank conference.

Safety and environmental concerns occupied centre stage, he said. Part of the safety philosophy was precisely to station the smallest number of people offshore.

Work there would be reduced by extensive use of automation, conscious choice of materials, good accessibility and a concentration on condition monitoring.

The normal procedure on other installations was to disassemble equipment and send it ashore to check for wear and tear, but Norske Shell took a different approach.

Vibration meters would be installed and equipment inspected regularly, with the findings sent ashore for analysis by specialists.

These would then set maintenance priorities in consultation with the offshore workforce.[REMOVE]Fotnote: Ajour (house journal for Norske Shell’s E&P department), no 2, 2 May 1991, “Vedlikehold med lav bemanning. Sikkerheten er ivaretatt”.

Only unavoidable repairs were to be done on the platform.

Equipment not significant for safety would be sent ashore. Rather than strip down a pump and maintain it in the platform workshop, the plan was to replace the whole unit with a new one.

Maintenance or repairs would be done as far as possible at sub-contractors, preferably in mid-Norway. Shell had nobody for such work and therefore planned for back-up equipment offshore.[REMOVE]Fotnote:  Ajour (house journal for Norske Shell’s E&P department), no 2, 2 May 1991, “Vedlikehold med lav bemanning. Sikkerheten er ivaretatt”.

An important precondition for reducing the platform workforce was the development of information technology and high-speed data communication.

In that context, the Råket office was the first building in Kristiansund to be connected to the Norwegian telecommunications network by fibreoptic cable.

It was tied during July 1992 into Shell’s international computer network, and Draugen was also linked in via satellite in the following summer.[REMOVE]Fotnote: EPO Express, June 1992, “Avansert datakommunikasjon: ‘Hjertet i nybygget’”.

drift av draugen, engelsk,
Telecom equipment room. Photo: Shadé Barka Martins/Norwegian Petroleum Museum

With satellite transmission capacity limited, data communication between sea and shore was perceived as unstable and time-consuming.

A computerised system for maintenance management was purchased in 1991, but response times experienced out on the platform were initially long and unreliable.[REMOVE]Fotnote: EPO info, no 2, 1994, “MMS-system for vedlikeholdsstyring”: 12.

Such transmissions have been based since mid-May 1995 on a radio link, which provides much greater capacity for both data and phone communication. The satellite equipment was demobilised in the autumn of 1995.[REMOVE]Fotnote: EPO info, no, 3 1995, “Radiolink på Draugen”: 14.

The maintenance management solution formed part of the computer systems intended to support operations. Digitalisation had made great strides at that time.

Virtually all technical drawings and seismic maps were available in digital form, and could be updated on the computer in the event of changes.[REMOVE]Fotnote: Ajour, no 2, May 1991 “110 mill. kr. i IT-satsing”: 9.
Minimum staffing placed much greater responsibility on the individual employee. This was described as follows in Shell’s EPO info house journal:

 

If somebody falls ill, we have nothing in reserve and are then dependent on a colleague from a different shift turning up to work. Pressure on the individual to put in an extra effort has increased, and it’s important that this is planned as well and as early as possible.”[REMOVE]Fotnote: EPO info, no 3, 1995 “Draugen-plattformen: Bedret kommunikasjon”: 8.

More initially

The workforce on Draugen in 1993-95 far exceeded the planned minimum staffing, as a result of projects pursued after production had begun.

Construction work and drilling came to an end during 1995, and the number of personnel on board began to decline towards the goal of 43 people.[REMOVE]Fotnote: EPO info, no 2, 1995, “Vedlikeholdskampanjer gir økt kostnadseffektivitet”: 7.

Several production wells were completed during this early period. Capacity for producing oil was upgraded in 1995 and part of the process plant was replaced to optimise output. The bulk of this work occurred during a 10-day June shutdown.[REMOVE]Fotnote: EPO info, no 4, 1995, “Oppgraderingen på Draugen: Suksess i første fase.

Drilling on the field was completed in February 1996 with the fifth production well. Norske Shell’s drilling department had been stationed in Kristiansund since 1992 as an integrated part of the Draugen organisation.[REMOVE]Fotnote: Ajour, no 2, May 1991, “Boreavdelingen til Kristiansund. Vi gleder oss til 1992.

Following the final well, its seven staff were transferred to Stavanger to cooperate with the exploration team there. They were mostly expatriates, used to moving at short notice.[REMOVE]Fotnote: Tidens Krav, 7 February 1996, “Shells boreprogram avsluttet på Draugen”.

Change processes

Opportunities for improving the running of Draugen in a number of areas were outlined in a report entitled Operations 2000, which was produced by a group established during 1996.

This found that costs could be cut while simultaneously increasing output, and figures were put on what was to be achieved by 2000. Most targets had already been reached at the end of 1997.

The production increase was bigger than planned, and operating costs declined steadily. High oil prices helped to ensure Norske Shell’s best-ever profits.[REMOVE]Fotnote: Verdiskapning innen Draugen driftsorganisasjon (1998), project assignment, Management programme, BI Norwegian Business School.

But oil prices are seldom stable. They sank again as early as the following year to USD 10 per barrel, and operating results therefore deteriorated.

That presented Norske Shell Exploration & Production (NSEP) – the new organisation put in place from 1 June 1999 – with fresh challenges.[REMOVE]Fotnote: Shell UP, July 1999. NSEP 2000 og ny strategisk retning.

External factors such as oil prices had a direct impact on operating profits and contributed, along with cost overruns, to results the company found unacceptable.[REMOVE]Fotnote: Consultation group, NSEP 2000 (May 1999): Sammen om felles fremtid, Shell UP.

A new reorganisation was initiated, with a project on “Draugen – shaping up for the future” leading the way. Carried out in 2002-04, this involved restructuring the team running the field.

draugen og fagforeninger, engelsk,
Carina Løvgren is one of the nurses at Draugen. Radio communication with the helicopter traffic, in addition to weather observations, is also under the responsibility of the nurse. Photo: Shadé Barka Martins/Norwegian Petroleum Museum

The goal was to reduce operating costs, primarily by transferring a number of jobs and personnel to land. The first function moved was the telephone switchboard.

Thereafter, staff at Råket had the job of booking helicopter flights for personnel heading to or from Draugen. The radio operator job on the platform was transferred to the nurse.

This change process was eventually coordinated with a major restructuring of Shell E&P’s European organisation, which brought all exploration and production units into a common organisation.

The aim was to achieve coordination benefits and extend best practice.[REMOVE]Fotnote: http://www.ptil.no/nyheter/tilsyn-styring-av-hms-i-norske-shell-article1057-702.html (Read more in the article on Shell’s history.)

In this connection, the “x-border asset” body was established in Shell E&P Europe to help coordinate the sharing of experience and implementing strategy across the Norwegian-UK border.

X-border asset consisted in 2006 of the Draugen and Goldeneye operations organisations, on the NCS and the UK continental shelf respectively.

In addition came the Mossmorran and St Fergus gas terminals in Scotland. Britain’s Brent field belonged for a while but was later separated off.[REMOVE]Fotnote: Shell Drift Draugen og Ormen Lange, no 6, 2006, “No borders in x-border”: 4-5. Ormen Lange on the NCS was included in 2007.

A goal of the Draugen organisation in this period was to become a centre of expertise within Shell for production, maintenance and communication.

Team members were given new reporting paths to Shell’s offices in both The Hague and Aberdeen. A number of employees acquired greater responsibility through such cross-border reporting. That made the job more international for many, with wider opportunities for working in other countries for periods.

But the restructuring also meant that reporting lines became longer, and time lags between meetings with those one reported to could become lengthy.[REMOVE]Fotnote: Interview between Gunleiv Hadland, Norwegian Petroleum Museum, and Alf Kristian Lillebo, 14 May 2018.

Ormen Lange and new operating modes

Gas was discovered in 1997 about 120 kilometres north-west of Kristiansund, with Norsk Hydro as operator and Shell as one of the licensees.[REMOVE]Fotnote: Stavanger Aftenblad, 10 April 1999, “Alle mot alle på Ormen Lange”.

This discovery was named Ormen Lange.

While Hydro became development operator, it was established in 1999 that Norske Shell would take over after the field came on stream in September 2007. That happened the following 1 December.

Shell also secured responsibility for preparing the subsea and onshore installations for production, and for coordinating work on drilling the production wells.[REMOVE]Fotnote: Proposition no 41 (2003-2004) to the Storting: Utbygging og drift av Ormen Lange og anlegg og drift av Langeled m.v: 7.

Ormen Lange, operasjonssenter.
Ormen Lange operations office. Photo: A/S Norske Shell/Norwegian Petroleum Museum

It was decided to develop Ormen Lange with remotely controlled subsea installations tied back to a land-based processing plant at Nyhamna outside Molde, south of Kristiansund.

Gas and condensate output was to be transported ashore as an unprocessed multiphase flow through two 120-kilometre pipelines in water depths down to 1 100 metres.

That called for technological advances and the adaptation of equipment, as well as for new forms of operation, and this became an important project for developing remotely operated production.

The operations team responsible for the land-based plant was stationed at Nyhamna, with management and technical support for this facility provided from Råket.[REMOVE]Fotnote: Pettersen and Sæter (2014): RFID-merking av sikkerhetsventiler: Forbedring av informasjonsflyt i vedlikeholdsprosesser på Nyhamna, thesis for a BSc in petroleum logistics, Molde.

As with Draugen, training was organised for operators ahead of production start-up using a simulator which imitated control room functions for Ormen Lange. This was installed alongside the control room in the administration building at Nyhamna.[REMOVE]Fotnote: Shell Drift Draugen og Ormen Lange, no 1, 2007, “Simulatortrening gir trygghet”: 11.

Integrated/e-operation

arbeidslivet på draugen,
Operations organization at Råket in Kristiansund. Photo: A/S Norske Shell/Norwegian Petroleum Museum

The Råket operations centre opened on 31 January 2007 with provision for integrated or e-operation, which permits follow-up and possible control from land.[REMOVE]Fotnote: Shell Drift Draugen og Ormen Lange, no 1, 2007, “Råket Operasjonssenter åpnet dørene: 14.

Supporting both Draugen and Ormen Lange, this facility ranked at the time as the most modern of its kind in the Shell group and was tied into Shell Europe’s communication network.[REMOVE]Fotnote: Aarset, M and Moe, O (2008), “IT Security and Architecture for Integrated Operations: Examples from deliveries to Ormen Lange and Draugen”. Intelligent Energy Conference and Exhibition, Amsterdam, The Netherlands.

Experts in relevant disciplines could now monitor and comment on work offshore from the centre, reducing the need for them to visit Draugen.

Although it now became possible in principle to run the platform entirely from land, this opportunity had yet to be taken by 2018.[REMOVE]Fotnote: Telephone conversation between Gunleiv Hadland, Norwegian Petroleum Museum, and Gunnar Ervik, 26 April 2017. The operations support team on land included experienced production operators from the platform, and the coordinator on land rotated with the same job offshore.

While land personnel could follow up shifts on the field to a greater extent than before, high-quality videoconferencing was also provided. That in turn permitted closer monitoring and regular long-range meetings between sea and shore.[REMOVE]Fotnote: Bjerkestrand, Tor (13 November 2007), “Integrated Operations”, presentasjon, Draugen MCM.

From offshore to onshore

Transferring work ashore is not unique for Draugen or Shell. Once fibreoptic cables are in place for fast data transmission and collaboration, this has occurred on most Norwegian platforms.[REMOVE]Fotnote: Paulsen, Gard (2005). Informasjon over Nordsjøen: Telekommunikasjoner på norsk sokkel, research report no 3, BI Norwegian Business School.

However, no fibreoptic cable has been laid all the way to Draugen. Communication with the field continues to utilises a radio link.

Actual staffing on the platform varies in line with the work under way – conversions or more substantial maintenance, for example.

A common feature is that the permanent operations organisation offshore does as little as possible. Major maintenance and conversion campaigns are handled as specific projects, where extra personnel are hired in when required.

Centre both offshore and on land

The Draugen operations team was the first in Kristiansund, just as the field was the first on the NCS to be operated by Shell. Much of the organisation therefore had to be built up from scratch.

More such bodies were eventually established in the area, and Shell also became production operator for Ormen Lange – which benefitted from the experience gained with Draugen.

From the start, a key aim in operating Draugen was to minimise the platform workforce and do as much as possible on land. A number of reorganisations have sought to optimise this.

In connection with Ormen Lange, further concepts for operation from land were developed with the Kristiansund centre tied back to Draugen and Ormen Lange by fast data links.

This development forms part of a pattern in the oil industry, involving increased use of data communication, remote control, integrated operations and collaboration between sea and shore.

vestbase, engelsk, drift av draugen,
"Draugen outbound" Photo: Shadé Barka Martins/Norwegian Petroleum Museum

Published October 9, 2018   •   Updated October 18, 2018
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Draugen and the unions

person Gunleiv Hadland, Norwegian Petroleum Museum
Unionisation is a long tradition in Norwegian working life. Associated union activity was therefore seen as a natural process when the petroleum industry became fully established in southern Norway during the 1970s.
— NOPEF (Norsk Olje- og Petrokjemisk Fagforbund) was founded in 1977.
© Norsk Oljemuseum

These organisations followed the industry northwards along the Norwegian continental shelf in the 1980s. And several union branches were quickly formed both on land and offshore when the decision was taken to develop Draugen in 1988.

This reflects the way working life in Norway is largely constructed around the “Norwegian model” – a strong welfare state, a regulated labour market and extensive “tripartite” collaboration between employers, unions and government.

Bipartite cooperation between employers and unions is also pursued locally in the workplace, built on open processes and worker participation in job-related decisions. Both bi- and tripartite versions rest on a equality principle and depend on mutual trust, good communication and reciprocal recognition of roles and responsibilities.

Worker participation – also known as industrial democracy – is an old Norwegian tradition, and became part of the main agreement between unions and employers as early as the 1930s.[REMOVE]Fotnote: Meland, T (2018), “Sikkerheten utfordres”, Norsk Oljemuseums Årbok.

Norske Shell was established in Norway as far back as 1913, and has a long history of selling and distributing oil products in the country. (See the separate article on Royal Dutch/Shell.)

Shell-raffineriet på sola, forsidebilde, engelsk,
The Shell refinery at Sola. Photo: A/S Norske Shell/Norwegian Petroleum Museum

It has an almost equally lengthy engagement with organised Norwegian labour – starting with the transport workers’ union, which many of its drivers belonged to. Shell opened its own refinery in Sola local authority outside Stavanger in 1967 (see the separate article on this facility), and an in-house union was also organised there.

This later became part of the Norwegian Oil and Petrochemical Workers Union (Nopef), which has evolved into the Norwegian Union of Industry and Energy Workers (Industry Energy – IE).

When Draugen came to be developed, it went without saying for Shell’s Norwegian arm that a collaboration had to be established with the workers and their organisations.

Foreign companies do not always share the same understanding of Norway’s collaborative model. Norske Shell’s parent, Royal Dutch/Shell, is a big multinational group, and many of its executives and shareholders undoubtedly looked askance at the country’s commitment to worker participation.[REMOVE]Fotnote: Tor Arnesen interviewed by Trude Meland, Norwegian Petroleum Museum, 14 November 2017.

But Norske Shell believed this to be both right and important. Norwegian regulations require unions to be involved in the ergonomic design and configuration of workplaces.

When the Draugen platform was to be planned, however, there were no unions to confer with. No offshore organisation for the field existed at that time.

Norske Shell was not the operator for any other developments on the Norwegian continental shelf (NCS), and therefore had few personnel with offshore experience.

The company accordingly needed help, and it found this from state-owned Statoil (now Equinor) – which was then a fellow licensee in Draugen.

Union members in Statoil with experience from the NCS commented on the platform plans, and their input was appended to the plan for development and operation (PDO) of the field.

Union branches emerge

Recruitment to the Draugen operations organisation began in 1989. Shell consciously chose to hire personnel with union experience from its own refinery.

Union officials at this facility were also invited to a dialogue with the company on how bipartite collaboration in the Draugen organisation could get off to the best possible start.

Establishing good union activity, involving these bodies from an early stage and putting them in a position to do the best possible work were important goals for the Norwegian management.[REMOVE]Fotnote: Tor Arnesen interviewed by Trude Meland, Norwegian Petroleum Museum, 14 November 2017.

Since Nopef was the dominant union at the Sola refinery, it not surprisingly took initiatives related to unionisation on Draugen at an early stage.[REMOVE]Fotnote: Nopef Aktuelt no 2 1993, “Nopef og OFS kjører i tospann på Draugen”.

A Nopef branch was established in late 1991 for personnel in the project team for the field, which later became its operations organisation, and an interim executive committee elected.

draugen og fagforeninger, engelsk,
OFS union poster

The Federation of Offshore Workers Trade Unions (OFS), a rival body, created its own branch in the Draugen organisation during the spring of 1992, primarily for offshore personnel.[REMOVE]Fotnote:  Ofsa, no 4 2002, “10 års jubileum for OFS klubben A/S Norske Shell”: 13.

While Nopef was part of the Confederation of Norwegian Trade Unions (LO), the OFS was independent. Tensions quickly arose between the two branches. The “Draugen committee” was established in May 1992 in a bid to improve cooperation,[REMOVE]Fotnote: Nopef Aktuelt no 2 1993, “Nopef og OFS kjører i tospann på Draugen”. and Nopef and the OFS thereby succeeded in coordinating their demands towards Shell.

The two unions jointly reached a negotiated deal for land-based employees in January 1993. A similar agreement was later concluded for offshore personnel.

draugen og fagforeninger,
Lederne's logo

A third union also made its appearance in 1992, when a number of land-based office staff in the operations organisation joined the Norwegian Organisation of Managers and Executives. This also created a branch for senior technicians on the Draugen platform.

First conflict

The first Draugen-related labour dispute arose as early as the spring of 1993, before the platform had even been installed on the field.

Shell had chartered the Bahamas-registered Regalia flotel (accommodation rig) to provide berths for additional personnel during completion work.

This unit owned by Rockwater UK, whose Rockwater Norge subsidiary held the turnkey contract for work to be done on the flotel. Britain’s Kelvin company secured the catering job.

The unions believed that the British-dominated owners planned to use foreign labour to avoid Norwegian pay and working conditions on board, and reacted sharply.

In their view, Norwegian collective labour agreements should apply to all foreign companies which secured work in Norway[REMOVE]Fotnote: NTBtekst, 6 May 1993, “Strid om forpleiningskontrakt på Draugen”. and they were backed by the labour exchange in Kristiansund.

The latter wrote to the Norwegian Petroleum Directorate (NPD) to point out that it had made a big commitment to training unemployed locals for catering jobs, and was disappointed that foreigners were to be used for such work on Draugen.[REMOVE]Fotnote: Minutes of planning meeting for audits of A/S Norske Shell and Esso in the third quarter, prepared by the NPD on 17 June 1993. From the register of minutes, SAST/A101366.

draugen og fagforeninger,
The flotel Regalia. Photo: A/S Norske Shell/Norwegian Petroleum Museum

Underlying the fight over Norwegian rates for Regalia personnel was the debate on Norway’s possible EU membership, which was to be decided by a referendum in November 1994.

The European Economic Area (EEA) agreement between the European Free Trade Area (Efta) – including Norway ­– and the EU had been signed in May 1992 and came into force on 1 January 1994.

Due to apply regardless of the referendum outcome, this deal gave Norway access to the EU’s internal market where national boundaries would not affect trade, investment and mobility.

The OFS, in particular, feared that EEA membership could have extensive consequences in the oil sector and lead to “social dumping” by undermining Norwegian union rights. A particular goal of the unions was to secure legislation which ensured that collective pay deals with management had to apply to foreign companies.

While many personnel on the UK continental shelf worked a two weeks on-two weeks off rotation, the majority on the NCS had two weeks on, four weeks off, two weeks on, three weeks off.[REMOVE]Fotnote: Tønnesen, Oddleiv (1998), “Arbeidstidsordninger på norsk og britisk sokkel”, Ofsa, no 4: 12-13.

When the Regalia issue arose, the OFS contacted members of the Storting (parliament) from various political parties to explain its views.

Tora Aasland Houg from the anti-EU Socialist Left party raised the matter, and Labour industry minister Finn Kristensen made it clear that Norwegian pay and conditions must apply on Regalia.[REMOVE]Fotnote: Proceedings of the Storting, 1992/93, vol 137 No 7c Question Time 12 May 1993. Tora Aasland Houg.

That had consequences. Rockwater and Kelvin changed their minds, and it became clear in June 1993 that the bulk of the workforce on the rig would be Norwegians.[REMOVE]Fotnote: Bergflødt, Ørjan (1993), “Med Rockwater’s ‘Regalia’ på Draugen. Med norsk arbeidskraft for norske varer og tjenester, Ofsa no 3, 1993:6.

Cooperation with the unions

The Draugen committee functioned well. In a 1997 interview, all three union branch chairs emphasised that their collaboration had been unusually good.[REMOVE]Fotnote: Shell UP, May 1997, “Nye fagforeningsledere på Draugen”: 14.
Regular meetings where the chairs coordinated their negotiating positions meant that the workforce came across as united in their discussions with management.

Similarly, regular meetings with Shell had made the position clearer for the unions. It should be added that such collaboration was not unique for Norway’s oil sector.

The OFS and Nopef had begun collaborating actively over crew on mobile units as early as 1992. On Draugen, however, such cooperation appeared to work well for both employees and employer.

Strikes

Whether due to this good collaboration or other causes, Draugen has been spared strikes related to local conflicts. But the field has been affected by national stoppages related to pay talks.[REMOVE]Fotnote: Conversation on 8 March 2017 at Råket between Gunleiv Hadland, Norwegian Petroleum Museum, and union leaders Ola Krogsrud in Safe and Atle Wadstensvik at IE.

In April 1996, the Draugen platform was one of several offshore installations to be taken out on strike as part of a dispute involving the OFS. Originally for offshore workers alone, it now wanted to expand its membership base to include land-based construction and maintenance personnel who worked on the NCS for periods.[REMOVE]Fotnote: Aftenposten, 10 May 1996, “OFS fikk svarteper i Nordsjøen: Oljestreik avblåst da de ansatte fikk nok”.

The OFS demanded a separate pay agreement for these groups – known collectively as the insulation, scaffolding and surface treatment (ISS) trades.

Representing the employers, the Confederation of Norwegian Business (NHO) took the view that that LO-affiliated United Federation of Trade Unions already had such an agreement.

It accordingly refused to negotiate separately with the OFS, which ordered its ISS members employed on land to down tools on 10 April in order to apply pressure to the NHO.[REMOVE]Fotnote: Klassekampen, 4 May 1996, “Ønsker siste reis for OFS”.

To give weight to its demands, the union also called out certain offshore branches on a sympathy strike from 4-9 May 1996. That halted production from Heimdal, Oseberg C, Ula, Statfjord B and C, Gullfaks A and B, and Snorre as well as Draugen.

Since the latter platform was already shut down for a maintenance turnaround, the consequences for this field were not substantial.[REMOVE]Fotnote: NTB, 5 May 1996, “Mindre tap enn antatt av oljestreiken”.

Certain members of the Draugen workforce moreover refused to join the stoppage, which was also the case for OFS members on the Ekofisk and Valhall fields.[REMOVE]Fotnote: Dagens Næringsliv, 10 May 1996, Avblåste oljestreik

Poor organisation and internal splits meant the strike had to be called off without the OFS achieving its objectives. This was one reason why the previously independent union opted to join the Confederation of Vocational Unions (YS) in March 1997. Becoming part of a larger combine was intended to strengthen the union’s position. [REMOVE]Fotnote: Meland, Trude (2015), “ABC – fra husforening til LO”, Norsk Oljemuseums årbok.

However, the OFS branches on Ekofisk and Valhall switched to Nopef as a result of the conflicts.

A strike in 2000 did have consequences for Draugen, along with Åsgard B and Heimdal. These installations were shut down for 13 days, from 10-23 June. The dispute centred on a demand by the OFS and the Norwegian Organisation of Managers and Executives for a flexible retirement age to cover workers aged between 57 and 62.[REMOVE]Fotnote: Stavanger Aftenblad, 13 June 2000, “Oljestreiken kan bli lang, oljeprisen over 30 dollar”.

On behalf of the employers, the Norwegian Oil Industry Association (OLF – later the Norwegian Oil and Gas Association) denied that working conditions justified allowing offshore personnel to retire earlier than other groups in society.[REMOVE]Fotnote: VG website, 10 June 2000, “Streik i oljesektoren”, https://www.vg.no/nyheter/innenriks/streik-i-oljesektoren/a/3042078/
It responded to the stoppage by giving notice of a lock-out from 23 June for all members of the two unions on the NCS who had not already downed tools. That would have involved 2 680 workers in all, and could thereby have hit the whole NCS as well as having big consequences for Norwegian government revenues.

On 23 June, the government accordingly decided that the dispute would be dealt with by compulsory arbitration and the strike was called off.[REMOVE]Fotnote: https://www.regjeringen.no/no/aktuelt/lonnsnemnd_i_nordsjoen/id242644/

The unions failed to secure acceptance for any of their demands, since the National Wages Board found for the employers on all counts.[REMOVE]Fotnote: NTB tekst, 13 September 2000, “Oljearbeidere raser mot Rikslønnsnemnda”.

In August 2005, the OFS became part of the Norwegian Union of Energy Workers (Safe) along with the Norwegian Association for Salaried Employees (Nofu) and Parat/Prifoil – also YS members. The aim was to create larger unions in the energy sector.

LO members Nopef and the Norwegian Union of Chemical Industry Workers also joined forces in 2006 to create the new IE body – again to acquire more weight.

Downsizing offshore

The Draugen organisation and Norske Shell in general have been through several rounds of downsizing and restructuring, with the unions trying to oppose workforce cutbacks on safety grounds.

At the same time, they had to accept that production from the field began to decline after 2001. That in turn meant redundancies and efficiency enhancements so that commercial operation could last as long as possible.[REMOVE]Fotnote: Conversation on 8 March 2017 at Råket between Gunleiv Hadland, Norwegian Petroleum Museum, and union leader Ola Krogsrud in Safe and Atle Wadstensvik at IE.

Initiated in 2002, the “shaping up for the future” change process for Draugen aimed to reduce operating costs and permit efficient production with fewer personnel.[REMOVE]Fotnote: Petroleum Safety Authority Norway, 27 February 2004, Tilsyn – styring av HMS i Norske Shell. http://www.ptil.no/nyheter/tilsyn-styring-av-hms-i-norske-shell-article1057-702.html.

Analyses identified those parts of the organisation with spare capacity, and several functions were merged. Over time, multiskilling became an established part of job descriptions.[REMOVE]Fotnote: Telephone interview between Gunleiv Hadland, Norwegian Petroleum Museum, and Alf Kristian Lillebo, 14 May 2018.

Permanent offshore staffing on Draugen was reduced by seven posts in 2002-04.[REMOVE]Fotnote: Presentation on Draugen and Ormen Lane, Shell Exploration & Production. PSA annual meeting, 6 February 2008.

That included eliminating a separate radio operator job.

Union officials opposed this decision, partly on the grounds that this person’s expertise and experience could not be replicated by others in the event of alarms or crises.[REMOVE]Fotnote: Tidens Krav, 24 October 2003, “Draugen fjerner radio-operatørene. Tillitsvalgte frykter at det kan svekke sikkerheten”.

draugen og fagforeninger, engelsk,
Carina Løvgren is one of the nurses at Draugen. Radio communication with the helicopter traffic, in addition to weather observations, is also under the responsibility of the nurse. Photo: Shadé Barka Martins/Norwegian Petroleum Museum

In 2004, the platform nurse was made responsible for radio communication with helicopters and for weather observations, while the control room also took over some radio operator functions.

The latter retrained as a health, safety, environment and quality supervisor. Crane and material handling jobs were combined into single post, while the construction supervisor job was also phased out.[REMOVE]Fotnote: Shell presentation on change processes at meeting with the Petroleum Safety Authority Norway, 20 September 2005.

Another strategy for reducing the offshore workforce has been to move operations to land. One example is the job of production supervisor on the night shift. This was phased out on the platform in 2004 in favour of increased support from land,[REMOVE]Fotnote: Shell presentation on change processes at meeting with the Petroleum Safety Authority Norway, 20 September 2005. with a job as production supervisor established there and the onshore organisation restructured.

The job on land was done by people with offshore experience, who swapped between working on land or on the platform. As many administrative jobs as possible were transferred ashore.

Ormen Lange and increased activity

The Ormen Lange gas field, which lies about 120 kilometres north-west of Kristiansund, came on stream in 2007 after being developed with subsea installations.

These were tied back to a land-based plant at Nyhamna in Aukra local authority near Molde, where Safe became the dominant union. That contrasted with the Draugen position, with three organisations all more or less equally active.[REMOVE]Fotnote: Conversation of 7 March 2017 on Draugen with Werner Frøland, head of the technician section of the Norwegian Organisation of Managers and Executives in Shell.

Ormen Lange, operasjonssenter.
Ormen Lange operations office. Photo: A/S Norske Shell/Norwegian Petroleum Museum

The head of Draugen operations was also given responsibility from December 2007 for Ormen Lange, which was operated from land. Both operations teams were coordinated, and a number of employees with Draugen experience were moved to the Ormen Lange group.

An operations centre affiliated with Shell’s Kristiansund office was established to support the two fields, and more remote control and follow-up from land also became possible for Draugen.

In connection with this conversion, reorganisations were initiated with the aim of reducing the permanent workforce on the platform. The unions had particular concerns about safety in the process, and cooperated with the operations management to ensure that these considerations were taken into account.

Reducing personnel offshore was not unique to Draugen, but formed part of general thinking in the oil and gas industry on moving jobs ashore to reduce operating costs.[REMOVE]Fotnote: Telephone interview between Gunleiv Hadland, Norwegian Petroleum Museum, and Alf Kristian Lillebo, 14 May 2018.

The operations centre increased opportunities for real-time monitoring and collaboration, and Draugen could be run from land if desired.

Experts were able to sit ashore and work in direct discussion and collaboration with personnel on the platform. Such interaction called for fast data links and secure communication, which were installed before the centre opened.[REMOVE]Fotnote: “IT Security and Architecture for Integrated Operations: Examples from deliveries to Ormen Lange and Draugen”, Amsterdam 2008. https://www.onepetro.org/conference-paper/SPE-112279-MS

A general trend in offshore work is the decline in the number of human-controlled processes, while communication increasingly takes place between machines.[REMOVE]Fotnote: Paulsen, Gard (2005), Informasjon over Nordsjøen: Telekommunikasjoner på norsk sokkel, BI Norwegian Business School, Sandvika.

Establishing Shell’s onshore operations centre can be viewed in relation to work by a number of oil companies on integrated or e-operation. This approach involves utilising advanced information systems for remote control of equipment and processes, and tailoring the related jobs.[REMOVE]Fotnote: Report no 38 to the Storting (2003-2004), Om petroleumsvirksomheten https://www.regjeringen.no/no/dokumenter/Stmeld-nr-38-2003-2004-/id404848/sec3

The aim is to reduce costs and optimise output, thereby extending a field’s producing life. Committing to e-operation means the permanent offshore workforce can be cut even further.

Union officials have been involved in this process by making safety assessments and commenting on job redefinitions and change processes to ensure that reorganisations preserve security.

One issue has been whether remote operation and transferring control functions to land would mean that people feel safer, or alternatively less secure. Fewer workers offshore could mean that not enough personnel are present in a crisis – particularly if communication with land is disrupted.

New demands for expertise and adaptation are also made on employees. On the positive side, the number of helicopter flights can be reduced and fewer people need to spend time offshore.

Another concern was that jobs would be transferred to low-cost countries, since monitoring and remote control could potentially be carried out over very long distance.[REMOVE]Fotnote: “E-drift og fjernstyring sett fra fagforeningenes ståsted”. https://www.forskningsradet.no/csstorage/vedlegg/furre.pdf.

Transferring work to land can also be viewed in relation to the development of Ormen Lange, which acted as a driving force in technological advances related to remote operation from land.[REMOVE]Fotnote: Norwegian Oil Industry Association report (2003), eDrift på norsk sokkel – det tredje effektiviseringsspranget.

Role of the unions

Union activities on Draugen were built up on the basis of employees who had earlier been involved in such work at the Shell refinery.

One important factor has been the participation of three different union branches. Officials from this trio have mostly succeeded in cooperating and coordinating their relations with employer and government.

The unions have had to deal with downsizings and reorganisations, and with the transfer of jobs to land. They appreciated the need for cost-effective operation, but were concerned that reductions should not affect safety on the field.[REMOVE]Fotnote: Shell Drift Draugen (2005), “De tillitsvalgte er med på laget”, A/S Norske Shell.Employees in the operations organisation have been taken out on strike, but that has been the result of national conflicts rather than local conditions.

Published October 9, 2018   •   Updated October 18, 2018
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