Equinor bought more from Norwegian suppliers in 2018
In 2018 Equinor purchased goods and services worth NOK 141.7 billion (EUR 15,55 billion; 1 Euro = approx 10 NOK) from more than 9000 suppliers globally. The company recently announced that 67% of total purchases, worth NOK 95.2 billion, went to suppliers with a Norwegian billing address.
^ Photo from Johan Sverdrup on 9 October 2018
Text & images by Equinor
“A competitive supply industry is highly important for the Norwegian continental shelf (NCS) and Equinor. Over the last year the Norwegian content of our total procurements has increased from 61% to 67%. The Johan Sverdrup project is the largest ongoing industrial project in Norway. In the first phase of the project Norwegian suppliers secured more than 70% of the contracts and in the second phase the Norwegian content is even higher. This is an indication of the adaptability of the Norwegian supplier industry,” says Peggy Krantz-Underland, Equinor’s Chief Procurement Officer.
Whereas Equinor’s total procurements declined from NOK 144.4 billion to NOK 141.7 billion from 2017 to 2018, the company increased its purchases from Norwegian suppliers by NOK 6.5 billion in the same period, from NOK 88.7 billion to NOK 95.2 billion.
“The transition in the energy sector in recent years has been tough for many, but essential to ensuring long-term activity. The suppliers deserve credit for the way they have responded. The current level of activity on the NCS would have been lower without the successful cost reductions achieved by the supplier industry. This has enabled us to sanction new projects in a challenging period. The result is more value creation and important ripple effect,” says Equinor’s executive vice president for Technology, Projects and Drilling, Anders Opedal. Equinor and the licence partners have sanctioned more than 20 large projects since 2016.
“We are pleased to see optimism return in the industry. What mattersnow, is sticking to and building on the right things. Of everything we do, safety is most important. A holistic approach to safety, from design, through development and into operations is central to succeeding with a continuous improvement of our safety performance,” says Opedal.
“Equinor has had record-high project activity over the last few years. Irrespective of size of each individual project, the quality is equally important. All contributors are important to achieve a successful result, be it local, national or international suppliers. We will work even closer with good suppliers to simplify, standardise and digitalise. This way we, together, can find win-win solutions and at the same time achieve a lower cost level,” says Opedal.
The Johan Sverdrup field is scheduled to come on stream in November 2019.
Facts about Johan Sverdrup
- Total investments for the development of Johan Sverdrup phase 1 is NOK 86 billion, and for phase 2 it is NOK 41 billion (10 Norwegian Kroner = approx. 1 Euro)
- Phase 1 includes the development of four platforms, three subsea installations for water injection, power from shore, export pipelines for oil (Mongstad) and gas (Kårstø).
- The two last topsides – for the processing platform and utility and accommodation platform – will be installed and hooked up in the spring of 2019.
- In Phase 1 over 70% of the contracts were awarded to suppliers in Norway. This includes the drilling platform (DP), built by Aibel, and utility and accommodation platform, built by Kværner and KBR. Kværner has also delivered 3 out of 4 jackets in Phase 1. Aker Solutions has been responsible for FEED for the whole project, and for the engineering of the riser and processing platform (P1).
- Expected to come on stream in Q4 2022, Phase 2 includes the development of another processing platform (P2), modification of the riser platform and field centre, five subsea systems for production and injection, in addition to preparations for power from shore to the Utsira Height in 2022.
- In Johan Sverdrup Phase 2 the Norwegian content of supplies is expected to be even higher than in Phase 1.
- Resource estimate: 2.7 billion barrels of oil equivalent
- Break-even: below USD 20 per barrel