Skills and Energy Security – a Norwegian perspective

Offshore Oil, gas and soon wind is booming as energy along with food security become ever more significant across the globe. Easy oil is shifting to prospecting and drilling in tough environments as higher oil prices make inaccessible fields viable and the same applies to gas. Even wind turbines are moving further out to sea with the three fields off the Humber, UK soon to build up to 10,000 turbines in over 50 metres of water – this has never been tried before. There is one key factor that will put all these efforts at even greater risk – the lack of a skilled workforce to find, develop and deliver energy worldwide.

This week I have been in Norway visiting Universities; Institutions and Businesses large and small working in the Energy business. I was with Captain Suresh Bhardwaj, Vice Chancellor of AMET Maritime University, Chennai and we have been exploring ideas to be applied on skills capacity building in the Indian Ocean on offshore oil, gas and wind alike as well as for the Humber on the developing Renewable Energy cluster.

Norway is the world’s third biggest oil exporter; the sixth largest exporter of natural gas and, with a high cost economy, has a clear determination to be at the leading edge of global energy innovation – upstream; middlestream and downstream. There was much talk of technology but, human performance and the skills agenda was never far from the discussion.

So, why is skills a key issue for the Energy Industry? Brazil is booming and the offshore industry is a key part of the story – 80 per cent of Brazilian offshore workers have under 2 years experience. Go the North Sea and the reverse is true. In one of the most complex and now mature regions there is a clear generation gap as the skilled workforce goes grey. In previous downturns the oil and gas industries did not invest in their workforce and, companies (with one or two notable exceptions) tended to poach experience on an as needed basis from competitors – which leads to job hopping and wage inflation. In parallel, packages have become increasingly expensive with Norwegian offshore workers entitled to 4 weeks leave for every 2 weeks worked.

In oil, gas and now wind energy the clear trend is to prospect in ever more complex conditions. Even wind turbines are being placed away from the shoreline in 50 metres + out to sea. Throw into the mix disasters like the BP oil spill in the Gulf of Mexico and more recently Total’s Elgin Field gas leak in the central North Sea, about 150 miles east of Aberdeen; and the risks of accidents in challenging conditions has to be factored in.  Elgin has led to the closure of other fields close by – such as Norway’s King Lear field. Collateral impact can be costly not just in environmental terms but in opportunity cost as capacity lies fallow. Then, there are escalating operating costs and, in wind energy, a clear imperative to reduce costs before the industry has really got started. It all boils down to skills – orientation for a life on the rigs; safety procedures; exacting operational standards; a high tech environment using the latest computer techniques and, constant innovation challenging each and every operating assumption. Skills have to keep pace.

As Einstein said, to do the same thing and expect a different result is a sign of madness (or complacency) so, let’s look at some of the ideas on how to develop operating performance that have been in our conversations this week.

Innovation.  According to the U.S. Geological Survey, 40 percent of the world’s untapped oil and natural gas reserves are in the Arctic or in very deep water. Last year’s Deepwater Horizon spill cast in stark relief how technologies developed for drilling through 1000 feet or less of sea can perform poorly and unpredictably in deeper waters.

Over at Aalesund University they are working on ship designs that respond to deeper water; cold and rough seas; remote wells and, increasingly, the need for sustainable (green) solutions. This applies to upstream; mid-stream and downstream activities and, their work on support vessels is fascinating.

M/S Bourbon Orca

The Innovation agenda goes beyond equipment. Hans Petter Hildre: “First, we were focussed on Ships and systems; then, we worked on control and the human factors; now we are working on integrated systems linking all actors in the supply chain and, we are moving to virtual prototypes – exploring operational performance before it takes place.” This shifts the emphasis in the way technology is used.

Another vital perspective in all of this is the use of architecture to create the right environment for learning and development. All of the leading Institutions in Norway are developing their research environments to harness the best in building; design and technology to enhance and nurture the creative spark – to challenge the known and explore the unknown.

Simulators. This Blog champions the use of simulators in all industries from trucks in logistics to quayside cranes and, earth removing equipment on construction sites. The offshore industry uses simulators to good effect. Take the work of Aalesund University on pipe laying vessels. DP (Dynamic Positioning) qualifications used to require 180 days at sea working on ships moving at about 350 metres an hour. One week of well-designed simulator training can replace 6 at sea.

And yet, there’s more to simulators than training individuals. Increasingly, they are being used for team work and cooperation. Take eDrilling Solutions (Axon have a 40 per cent stake) work on increasing value creation, safety and profitability through using holistic technology that combines multiple facets of rig drilling operations and facilitates enhanced teamwork. Sven Inge Odegard gave us a terrific insight into the evolution of simulators in this field. “You can’t afford to leave it to learn on the job – simulators can help forward planning; replay scenarios; try out the what if scenarios and, enable teams to work together using data to support decision making.” The photo above illustrates the screens used in a session to simulate all facets of the drilling operation – a well emulator to be used by teams. Developed in close collaboration with Statoil, this is now deployed in Stavanger and Houston, USA. Teams are using their own data from actual wells to run through the equipment and test out various scenarios. Powerful stuff.

There’s more to simulators than training individuals. Lars Christian Iversen at Vestfold University College introduced us to the innovative SimSam visual collaboration laboratory – built on a 360 degree simulator with integrated ICT technology using a 130 m2 soft screen (3.75 m high and 11 m diameter) is a case in point. This is a unique arena for new ideas, productive discussions and well-founded decision-making. Both approaches move way beyond the idea of a simulator as a box for training an individual. Which brings us to …

Simulation. Companies used to be vertically integrated and do everything themselves and then, clusters of firms working in the same industry emerged. For example, Aalesund in Norway has 14 shipyards and has 200 companies working in support; Stavanger is, along with Houston Texas, a key oil industry cluster – like Aberdeen in the UK. Right now, several places are looking to lead on offshore wind energy.

Now, we are seeing clusters that stretch globally. For example, Aalesund sees itself as a centre for Ship Design but accepts that it cannot compete in the mass market and concentrates on niche and sophisticated design. Hans Petter Hildre, Dean of the School, makes the point: “we see ourselves as the innovation hub for ship building. That means we will work with shipyards in Rumania and elsewhere so that we add value together. This way, we maintain our position as innovators. With Norwegian wages beings so high, we have to add value.” In other words, a culture of cooperation more than competition – coopetition.

This is the philosophy behind their upcoming Norwegian Maritime Competence Center, the fruit of cluster collaboration in the Region of Sunnmore. Skills exchanges between businesses and universities engender innovation and sustainable growth. Companies like Rolls Royce; SINTEFF; the Offshore Simulator Center; Moreforsking AS and others are working together in this exciting development. It is the same approach used in Stavanger University where close links with the offshore oil industry and research that draws from collaboration across the globe ensures that the coursework is always fresh and relevant to industry. A walk round their impressive laboratories illustrates the point with research projects on a wide range of energy related issues giving a real buzz to the place. It is not surprising that there are over 5,000 applications each year for their courses in this field.

One huge advantage with simulation and simulator technologies is the ability to use the data from teaching students as a means to research design and procedures in all sorts of equipment. Lars Christian Iversen at Vestfold University College highlighted how nano technology can be deployed to monitor conditions in structures – which can have a huge impact in operations and maintenance work. Then, there is the human factor laboratory at Aalesund University run by Sochi Kumandur is doing fascinating work on how people work with equipment. Using a gaze monitor, the specifics of what an experienced operator will monitor during a shift can be observed and, used to develop alternative lay-outs and ergonomically improved equipment. Several major shipping lines have questioned why there are so many avoidable accidents in such a high-tech era.

20:20 vision. Global supply chains have become stretched and, as energy costs have climbed, business planning has been transformed. Now, any business has to run supply chain scenarios at different oil prices with hikes asking serious questions about stretched supply chains and, increasingly, weak labour pools in otherwise attractive locations.

The Energy industry has been modelling these scenarios for years with the level of the oil price acting like an open / shut decision valve for all fields. It is amazing how much oil is out there – if you are prepared to pay to extract it.

Then there are new technologies that will challenge operating assumptions and drop costs dramatically. Take the offshore oil rig – it could go the way of the telex, the fax and the telegraph. In layman’s terms this is a stand-alone rig that sits at the bottom of the sea and is operated from the shore using remote systems. This idea has been developed by by Statoil, the Norwegian Research Council (Petromaks and DEMO2000) and Innovasjon Norge. This concept could revolutionise the skills agenda as it would do away with expensive teams on remote rigs and, use technology to operate; monitor and track drilling operations from the shore. One major aspect of this will be how this can take simulation and simulator technology to a new level. A remote sea bed rig will mean going beyond training to use the technology to plan; operate and review rigs in real time. Maybe some aspects of this approach could be used as a leap frog approach in the cost sensitive wind energy field.

Research and industry. Norway is an object lesson in how best to generate research through close collaboration between the academia and industry. Stavanger University’s COREC (Centre for Increased Oil Recovery) and work on the Ekofisk Field illustrates the point. Discovered in 1969 and starting production in 1971, Ekofisk remains one of the most important North Sea fields – it is planned to continue until at least 2050.  Dr Hans Borge, Dean of the Department of Petroleum Engineering at Stavanger University, puts it plainly: “lifting recovery by 1 per cent equates to £10 billion.”

Hans Petter Hilde at Aalesund highlighted the need to be innovative but to put a greater emphasis upon implementation and a prototype culture. This is helped greatly by a focus on continuous learning. A modern day university cannot just teach undergraduates or even generate masters and PhDs; the facilities need to be open to industry so that professionals can upgrade their skills over their career. In turn, this can add value to research in using the data generated by these interactions to support design and adaptation. Yesterday, Vestfold University College celebrated the inauguration of a sponsored professoriate from Kongsberg Maritime – a leading Maritime simulator company.

Tom Bremer, Director of Axon, emphasises the value of using simulator technology to enhance continuous learning and replicate reality: “It is safer and more productive to drill the well in the simulator first. we can use real data from the client and the teams can work through different scenarios and “what ifs” together. This is a rich learning experience and, has an impact on the bottom line.”

It has been a fascinating few days in Norway looking at how developed world economies can survive and prosper in an ever more competitive world with a focus on added value technologies. This means a relentless focus on niche products and not on the mass market that other economies with cheaper labour costs can thrive in. Equally, I have witnessed a distinct shift away from “selling boxes” within the serious training technology players to “integrated solutions” capable of working with teams of in-house and outsourced players as well as players from upstream; mid-stream and downstream operations. As Martin Christopher has said in another context: “supply chains compete not companies.”

This trip has been with colleagues from AMET Maritime University in Chennai, India – we are developing an Offshore Faculty for the Indian Ocean market where, like Brazil, there is a need for skills and experience to maximise the offshore opportunity. It has been a unique opportunity to see how Norway seeks to add value at all levels of the student experience. For example, overseas students do not pay fees – if they qualify for a course. We spoke with Indian students who spoke glowingly of the learning experience and, above all, of the job prospects that these courses open up. Again, this speaks volumes for close collaboration between academia and industry in generating jobs and building skills in a virtuous circle.

One to take away. The wind energy industry is opening up – through subsidy. The key driver is not so much opening up more fields but looking for viability without subsidy. Many of the approaches highlighted above champion all forms of collaboration. Industrial clusters such as the shipyards of Aalesund cannot compete with mass production shipyards in Asia so, they work together to maintain their position in niche markets – like building ships for the wild seas of the North.

We saw many examples of innovation in skills training across Norway from maritime clusters to offshore industries; ship building and structures to training technologies and human factors. Regions aspiring to become leaders in any of the energy markets (oil; gas; renewables) have to focus their cluster capacity and competencies. Then, they need to seek out and work with global partners – it is not enough to focus your own Region; it has to be either a global innovation hub or add value to another collaborative eco-system. This is not the market to go it alone or, through trial and error. For example, as Sam Pick of the Renewables Network made clear at the Offshore Wind Supply Chain Conference in Oslo recently: “There will be £15 billion invested in the Humber and the offshore fields in the coming years. Norway has no domestic offshore wind market but has the expertise to work with the Humber that does.” The same point applies to Tamil Nadu, in India, which is leading the push on wind energy there.

Above all, a skilled workforce is not one that offers individual skill alone. These days, teamwork in terms of projects, supply chains and experience sharing is the only way to move forward. And simulation and simulator technologies are at the heart of forward thinking on innovation; research and operational performance – simulating what can happen before it does. Energy security is a common concern but the skills to deliver the agenda are key.


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