NORWAY - OIL FOR DEVELOPMENT DIRECTORATE 2006-2007

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2006-2007

Norwegian Petroleum DirectorateContribution to

O i l f O r d e v e l O p m e n t

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Nicaraguaietnam South Africa

Angola

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Nigeria

Mozambique

Bangladesh

CambodiaSriLanka

CCOP

Tanzania


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The Norwegian petroleum setor governane system,

the legislative, regulatory and onessionary ramework or

the petroleum operations is in many ways unique in the way

it gives the government eient management tools or

seuring prudent management o the petroleum resoures,

olletion o a high share o the resoure rent and due regardto health, the environment and saety. The system has been

developed over more than 40 years, in parallel with the

tehnologial development o the industry, market

hanges and the requirements o the soiety. Norway has

been able to develop a large petroleum setor whih today

onstitutes around 25 per ent o GDP and 33 per ent o

the total government inome without signiant negative

impats and without hanging the abri o the soiety. The

establishment o a petroleum und, the Government Pension

Fund-Global, is seuring that inome rom the setor also

will benet uture generations. Strong interest have been

epressed rom many ountries around the world in seeing

i there are elements in the Norwegian petroleum governanesystem that an be applied elsewhere. The interest has been

partiularly strong in developing ountries and ountries

with transitional eonomies.

The Norwegian Petroleum Diretorate (NPD) shall ontribute

in the reation o largest possible values or the Norwegian

soiety. The diretorates hallenge in maimising the oil

and gas reovery is oten to identiy areas o misalignment

between ompany interest and the interest o the soiety at

large. When suh misalignment is signiant, the need or

an independent authority is most ritial, sine ompany

based evaluations may not neessarily refet the aspiration

o soiety.

NPD is also responsible or maintaining an overview and

ommuniate ats o the upstream oil and gas setor. It

urther promotes realisation o the ull resoure potential

on the Norwegian ontinental shel and ailitates eient

industry proesses. But most importantly NPD give advie

to the Ministry o Petroleum and Energy (MPE) in important

matters related to resoure management, inluding

ontinuous development o the ramework, as well as

ollow-up o the ativity.

Based on the Norwegian eperiene and adapted to the

partiular needs o the ooperating partners, NPD has ormore than 25 years assisted developing ountries in petro-

leum resoure management. The MPE has speially asked

NPD to render tehnial advie and implement development

assistane projets in the petroleum setor. This assistane is

naned and oordinated by the Ministry o Foreign Aairs

and the Diretorate or Development Assistane (NORAD).

NPD is partiularly pleased to see that Norwegian assistane

to the petroleum setor in developing ountries has got an

inreased ous trough the Oil or Development initiative

(OD). This initiative puts the petroleum resoure manage-

ment into a wider perspetive, partiularly ousing on

inome and environmental management and goodgovernane and is based on a more ormal ooperation

between the relevant Ministries and Governmental bodies

or assistane. Early assistane to young petroleum nations

is partiularly important, or establishing good governane

systems beore any signiant revenues starts fowing.

This year we are pleased to publish our seond report on the

assistane to developing ountries. We are ousing on some

o the ommon hallenges that we are aing in many projets

like petroleum resoure management, petroleum data man-

agement and metering o petroleum prodution. Within a

budget o seven man-years about 50 NPD proessionals in ge-

osienes, reservoir engineering, ost engineering, petroleum

eonomy, data management and other disiplines have beeninvolved during 2006. In addition we have reeived important

assistane rom the Petroleum Saety Authority Norway.

In 2006 speial attention has been given to our projets

in East Timor and Iraq, as well as to the preparation o new

projets in Madagasar and Angola.

P R E F A c EPhoto: Emile Ashely

Acting Director-GeneralNorwegian Petroleum DirectorateBente Nyland


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Norwegian Petroleum DiretorateP O Bo 600

NO-4003 Stavanger

Norway

Telephone: +47 51 87 60 00

Telea: +47 51 55 15 71

E-mail: [email protected]

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Conbuon o

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1. INTRODUCTION

2. FACTS

2.1 The Norwegian Petroleum Diretorate

2.2 The Ministry o Petroleum and Energy

2.3 The Petroleum Saety Autority Norway

2.4 Oil or Development2.5 PETRAD

3. ASSISTANSE UNDER THE NORAD/NPD AGREEMENT

3.1 Visiting delegations

3.2 Projet Planning

3.2.1 Sao Tome and Prinipe

3.2.2 West Aria

3.2.3 Angola

3.2.4 South Aria Phase III

3.2.5 Madagasar

3.2.6 Bangladesh3.2.7 Oil-sh-environment

3.3 Projet management and oordination

3.4 Tehnial assistane to NORAD

3.5. Inormation and training

3.6 NORAD/OD Aounts 2006

3.7 NORAD/OD Budget and plans 2007

4. BILATERAL PROJECTS

4.1 Aounts 2006 Bilateral projets

4.2 Plans 2007

5. ARTICLES

5.1 Petroleum Data Management. A ornerstone in

regulation oil ativities to the benet o the people

5.2 Institutional ooperation between Mozambique

and Norway regarding gas metering

5.3 Managing the Norwegian Oil and Gas Resoures,

the Norwegian way

6. OD Projects in NPD

6.1 Angola

6.2 Bangladesh

6.3 cambodia6.4 ccOP

6.5 India

6.6 Iraq

6.7 Madagasar

6.8 Mozambique

6.9 Niaragua

6.10 Nigeria

6.11 Sao Tome and Prinipe

6.12 South Aria

6.13 Sri Lanka

6.14 Tanzania

6.15 Timor-Leste

6.15 Vietnam

c O N T E N T S

Photo: Jan Stenlkk

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The Oil or Development Initiative (OD) was launhed

in September 2005. A ministerial steering ommit-tee has been established or OD with representatives

rom 4 ministries (Foreign Aairs (MFA), Finane (MoF),

Petroleum and Energy (MPE) and Environment (MoE)).

The Norwegian Ageny or Development cooperation

(NORAD) has the seretariat or OD.

The Norwegian Petroleum Diretorate (NPD) assistane

is now an integral part o a omprehensive Norwegian

assistane within the petroleum setor, inluding envi-

ronment, health, saety, revenue management and good

governane.

The NPD has assisted developing ountries in petroleum

resoure management or more than 25 years. The assist-

ane has hanged ous over time. In the beginning the

ous was towards spei tehnial assistane on an ad

ho basis, now its mainly direted towards long-term in-

stitutional ooperation with sister organisations having

similar governane untions on a wide range o issues.

The assistane is provided and naned under an

agreement with NORAD and the MFA. In 2004 NPD was

divided into two separate government institutions, NPD

and the Petroleum Saety Authority (PSA). Both organisa-

tions are now parties o the above agreement.

All eisting institutional ooperation programmes that

are onduted by NPD and PSA are now dened to be

under the umbrella o OD.

From a governmental point o view petroleum resoure

management requently requires oordination with

other setors o soiety, as well as with neighbouring

ountries. In areas where suh ross-setor or ross-

border hallenges are identied, NPD has a long

tradition in promoting suh projets.

Most o the ooperation programmes require assistane

beyond the apaity o the NPD and the PSA. Epertise is

then proured rom national and international onsult-

ants and tehnial input is also provided by

other Norwegian institutions.

NPD believes that these ooperation projets ould have

substantial impat on the ooperating institutions, as

well as on the petroleum setor development and on

the general eonomi development in the ountry in

question. Aess to eient energy systems is important

to industrial development and poverty alleviation. At

the same time it is important to asertain that naturalresoures are managed optimally, that health, environ-

mental and saety onsiderations are duly onsidered

and that the host ountry gets its rightul share o the

prot rom the ativity. The governmental institutions

with whih NPD are ooperating are met loally with

onsiderable hallenges in their ontat with repre-

sentatives rom the international petroleum industry,

an industry with very strong managerial, tehnial and

nanial resoures.

Norway has partiular eperiene and ompetene

in the management o petroleum resoures. The

Norwegian regulatory ramework or the petroleum

upstream setor has been developed in parallel with

the tehnologial development o the industry, mar-

ket hanges and the requirements o the soiety. The

Norwegian regulatory and onessionary ramework

is in many ways unique in the way it gives the govern-

ment management tools or seuring prudent resoure

management and due regard to health, the environment

and saety in onduting the petroleum operations. The

Norwegian eperiene is valid, but the solutions will

always have to be adapted to the loal requirements,

traditions and to the institutional apaity that an be

established. Some ountries have established systemsthat annot be hanged in the short run. But long term

improvements an sometimes be made to make the

governane systems more eient, transparent and

equal to all partiipants.

In total in 2006 the NPD and PSA used 5.0 man-years or

this international assistane (4.8 and 0.2 man-years re-

spetively) out o a seven man-years budget or the NPD

or international assistane. In 2005 the total NPD and

PSA assistane was 6.1 man years (5.4 and 0.7 man-years

respetively). This is signiantly lower than planned due

to delays in etending eisting programmes and in thestart up o new programmes.

A total o 50 NPD and ten PSA employees were engaged

in assisting developing ountries in petroleum resoure

management in 2006. The eedbak rom our proes-

sionals in data management, geosienes, reservoir

engineering, ost engineering, petroleum eonomis,

metering and health, environment and saety is that the

work is stimulating and that important ompetenes are

developed urther.

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NPD harged NORAD and our institutional ooperation

partners or assistane under OD in 2006 a total o

NOK 25.3 mill, up NOK 0.2 mill rom 2005. A signiantpart o the total osts are related to prourement o

eternal servies. The total ost o these programmes

are however higher beause signiant volumes o

servies and goods are proured loally.

The NPD also renders servie to the MPE to assist in

ollowing up the Memorandum o Understanding

agreements that have been signed with other petroleum

produing ountries. In 2006 the ativity was partiularly

high towards Russia.

In 2006 the NPD support has omprised a number oissues and disiplines, but we have seen that a ew

o them are muh in ous in several programmes:

Regulation through petroleum ontrats or legal /regulative ramework

Etension o the ontinental shel under UNcLOS The promotion and liensing proess Supervision o liene ativity Petroleum data management Fisal Metering HS&E, inluding emergeny preparedness planning EITI and good governane

Through the Etrative Industries Transpareny Initiative

(EITI) several petroleum produing nations and major in-

ternational oil ompanies have ommitted themselves to

proedures and reporting mehanisms/institutions that

will improve the transpareny regarding the very large

fows o unds that haraterise this industry. Under OD,

Norway should be in a good position to supplement EITI

on good governane and transpareny in the petroleum

setor. OD has also strengthened the ous on environ-

mental issues, whih is very positive. Unortunately OD

is not addressing health and saety issues diretly, NPD

and PSA will however keep ous on these aspets andsee to it that HS&E is inluded as an integral part o the

support to our ooperating partners. In Mozambique

INP with assistane rom PSA arranged a workshop on

emergeny preparedness related to gas distribution in

the densely populated Matola area, an initiative that was

very well reeived by the industry, loal institutions and

other stakeholders.

UN Convention on Law o the Sea (UNCLOS)As regards the UNcLOS, and potential laims rom island

and oastal states or etension o their sovereign ter-ritorial rights beyond the 200 nautial mile elusive

eonomi zone, the NPD has supported these issues in

several programmes in 2006. NPD has lose onnetion

with GRID Arendal and UNEP who provide the ompe-

tene on the proess that has to be ollowed and the

data that is needed or the appliations.

Regional and cross sector networkingThe oshore petroleum industry has very important

interation with other setors o the soiety like shing,

shipping and tourism, in addition to the diret impat on

eonomi and industrial development. Environmentalissues and restritions or other users o the sea are im-

portant. In 2006 the NPD has ontinued the ooperation

with the Institute o Marine Researh and the Norwegian

Pollution control Authority to develop joint projets.

Firm plans are now in plae or Angola.

Many o the issues are very well suited or regional o-

operation. We are now, in ooperation with OD and the

involved ooperating oreign institutions, ailitating the

nane o suh ross institutional ativities when new

programmes are designed. Regional networking works!

Planning o new programmes in 2006Due to some delays in the start up o OD, the ormal

proess o establishing new programmes and to e-

tend eisting programmes have taken more time than

planned. We do however see progress as to the start up

o a new programme with OMNIS in Madagasar, a new

programme with Ministry o Petroleum (MINPET) in An-

gola and the etension o the eisting programme with

the National Petroleum Institute (INP) in Mozambique.

We epet all these programmes to be in plae during

the rst hal o 2007. The ooperation with Department

o Minerals and Energy (DME) in South Aria has been

etended under a programme administered by The Nor-wegian Water Resoures and Energy Diretorate (NVE)

and a ormal ooperation between Petroleum Ageny

South Aria (PASA) in cape Town and the NPD will most

likely be established in 2007. cooperation with Sao Tome

and Prinipe is also still under disussion between the

National Petroleum Ageny (ANP) and the possible do-

nors OD, World Bank and the Arian Development Bank.


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2

F A c T S

Photo: Einar Halvorsen


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2.1

T H E N O R W E G I A NP E T R O L E U M D I R E c T O R A T E

NPD is administratively subordinate tothe Ministry o Petroleum and Energy (MPE).

THE MAIN OBJEcTIVE:

The NPD shall contribute to creating the greatest possible values or the society rom

the oil and gas activities by means o prudent resource management based

on saety, emergency preparedness and saeguarding the natural environment.

THE PRIMARY FUNcTIONS OF THE NPD ARE TO:

eerise administrative and nanial ontrol to ensure that eplorationor and eploitation o petroleum are arried out in aordane with

prevailing legislation, regulations, guidelines, deisions and liensing terms ensure that eploration or and eploitation o petroleum are pursued at

all times in aordane with the guidelines laid down by the MPE

advise the MPE on issues relating to eploration or and eploitationo submarine natural resoures

issue regulations relating to resoure management ollow up the industrys ompliane with regulations or resoure management perorm resoure assessments and maintain a resoure inventory ensure that the petroleum ativities minimize disharges and emissions to

the eternal environment

manage and make available petroleum data and inormation. audit sal metering systems ensure seurity o deliveries handle cO2 ta issues on behal o the Ministry o Finane emphasize ost-eetiveness in eploration and prodution, ost-eetiveness

in utilization o the inrastruture and oordination aross prodution lienes

assist the Norwegian Ageny or Development cooperation, (NORAD) andthe Ministry o Foreign Aairs, in planning and implementing support in the

petroleum setor (OD) to authorities in seleted ountries and regional

organisations

support sister organisations in other petroleum produing ountriesthrough institutional ooperation or tehnial assistane

assist MPE in implementing MoUs with other petroleum produing ountries

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2.2

T H E M I N I S T R Y O F P E T R O L E U MA N D E N E R G Y

Norway has developed rom an ineperiened oil and gas nation in themid 1960s to one o the worlds largest eporters o petroleum. Daily

hydroarbon prodution is urrently eeeding 4.5 million barrels o oil

equivalents. This represents about 25 per ent o gross domesti produt

and 50-55 per ent o total Norwegian eport.

Overall administrative responsibility or petroleum operations on the Norwegian

ontinental shel rests with the Ministry o Petroleum and Energy (MPE). Its job is

to ensure that these operations are pursued in aordane with the guidelines laid

down by the Storting (parliament), whih determines the ramework or petroleum

operations in Norway.

THE PRIMARY FUNcTIONS OF THE MPE ARE: development o the legal, and institutional ramework preparation and implementation o poliies, suh as

opening new areage and liensing, approval o eld development

plans, prodution and transport plans environmental issues

implementation o Memorandum o Understanding orooperation with the authorities in other ountries

internationalisation o the Norwegian petroleum setor,The INTSOK oundation has been established to assist the MPE in this proess.

Monitoring state owned ompanies in the petroleum setor

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T H E P E T R O L E U M S A F E T YA U T O R I T Y N O R W A Y

The PSA reports to the Ministry o Labour and Soial Inlusion.

THE MAIN OBJEcTIVE;PSA stipulates premises or and ollows up that the players in the petroleum

sector maintain high standards o health, environment, saety and emergency

preparedness, and thereby also contribute to creating the greatest possible

values or society,

THE MINISTRY HAS DELEGATED TO THE PSA AUTHORITY TO: issue regulations pertaining to HSE in the petroleum ativity enore the regulations grant onsents and eemptions rom regulationsi neessary and justiedThe PSA has the regulatory responsibility or saety, emergeny

preparedness and the working environment in the petroleum

ativities oshore Norway and on ertain petroleum ailities and

onneted pipeline systems on land.

By means o its own supervision and ooperation with other authorities

with independent regulatory responsibility or health, environment and

saety, the PSA shall ensure that the supervision o the petroleum ativities

are arried out in a omprehensive manner. Important attributes o the

PSAs regulations and supervisory ativities are:

regulations epressed in terms o goal-setting requirements supervision oused on the ompanies risk based

saety management systems

supervision arried out by means o audits and veriations onlusions oused on improvement potential in the

management system, transpareny, mutual respet and

reognition o roles and responsibilities

Photo: Emile Ashely

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2.4

O I L F O R D E V E L O P M E N T

OBJEcTIVEThe Oil or Development (OD) initiative aims at assisting

developing countries with hydrocarbon potential in their

eorts to beneft rom petroleum resources in a way that

generates economic growth and welare to the popula-

tion in general, and is environmentally sustainable.

BAcKGROUNDPetroleum plays and will play an important role in a

number o developing ountries. Oil and gas holds

promise o beoming a vital resoure or eonomi

and soial development, It has, however, in manyases proved diult to translate petroleum resoures

into improved welare or the inhabitants o these

ountries. The ombination o large and sudden

infows o revenues and lak o relevant institutions

and governane systems inreases the risk o

orruption, rent-seeking, onfit, dependene

and rowding out o industries. As a result, many

developing ountries sore onspiuously low

on the urrent generation o international

development perormane indees.

THE OIL FOR DEVELOPMENT INITIATIVEThe Oil or Development (OD) initiative uts arossand involves the relevant Norwegian ministries,

embassies, other governmental agenies in addition

to organisations and onsultanies. A brie desription

o roles and responsibilities or the dierent bodies

involved ollows below.

THE STEERING cOMMITTEEAND THE SEcRETARIATThe Steering committee or Oil or Development

onsists o the Ministry o Foreign Aairs (hair) the

Ministry o Petroleum and Energy, the Ministry o

Finane and the Ministry o Environment. Theseretariat is in Norad (Norwegian Ageny or

Development cooperation), and is responsible or

oordination and implementation o the initiative.

The steering ommittee ormulates strategi dire-

tions, guidelines and priorities or the seretariat and

implementing organisations, and deides on major

projet proposals. The ommittee ensures that relevant

governmental bodies are involved and has an overall

quality ontrol untion.

EMBASSIESThe Norwegian embassies play an essential role in

Oil or Development, as etensive development

ooperation responsibility is assigned to them.The

embassies hold valuable loal and regional knowledge

and network etensively with government agenies,

industry, ivil soiety as well as international organisa-

tions and other donors in their respetive ountries.

Requests or Oil or Development assistane are

normally hannelled through the embassies, and

embassy sta generally appraise and provide advie

on proposals or ooperation.

NORADNorad is the hub o Oil or Development in terms o

tehnial advie, oordination, inormation ehange

and ailitation o quality ontrol. Norad reeives

requests rom governments and other partners, om-

muniates overall guidelines and steering ommittee

deisions to relevant stakeholders, and onveys stake-

holder response bak to the ommittee. Norad utilises

an epanded range o onsultanies, law rms and

researh institutions through ramework agreements

that have been subjet to ompetitive bidding.

IMPLEMENTING AGENcIESKey implementing agenies have been and remain

the Norwegian Petroleum Diretorate (NPD),

Petrad (International programme or petroleum

management and administration) and the Pollution

control Authority Norway (SFT). A range o onsul-

tanies, researh institutions and non government

organisation are also involved, as are personnel rom

the relevant government ministries. The Norwegian

oil and gas industry is also drawn upon in transering

ompetene and knowledge and Intsok - Norwegian

Oil and Gas Partners ontribute.

THE ASSISTANcEThe Oil or Development programme will be able

to provide in an eient manner seminars and

onsultany support o limited duration to many

ountries, based on a very simple appliation proess

(First line support).

A limited number o ountries will reeive long term

institutional support under the Oil or Development

programme. In these ases a more omprehensive

appliation and seletion proess will be used.

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2.5

P E T R A D

International Programme or Petroleum Management and Administration

Petrad was established in 1989 to ailitate sharing o knowledge and eperiene

related to petroleum management and administration.

Petrad arranges tailor-made seminars in Aria, Asia, Latin Ameria and ountries in

the ormer Soviet Union in the upstream and downstream setors, and oers two

eight-week ourses in petroleum management in Stavanger, Norway. These are

implemented by speialists rom the authorities, proessional ompany managers,

onsultants and aademi leturers with etensive eperiene rom the petroleum

industry in Norway and internationally.

TAILOR-MADE SEMINARS:The tailor-made seminars over a wide range o topis in the management o

petroleum resoures. They ous on management tehniques applied to real

problems o major interest to the partiipants. Some seminars also have a tehnial

ontent. The objetive o the programme is to identiy solutions to assist the

partiipants and their organisations in their work.

8-WEEK cOURSES:Two eight-week ourses on petroleum poliy and management and management

o petroleum development and operations, are arranged one a year to provide

proessional support or a areer in petroleum management. They ous on ormulation

and eeution o petroleum poliies and the operational aspets o the industry

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Photo: Petrad


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NORAD, holding the seretariat or OD, is the most impor-

tant ooperating institution to NPD or the implementation

o our institutional ooperation programmes. NORAD is also

a diret reeiver o servies rendered by the NPD, through aseparate agreement with NPD (also inluding PSA).

The diret assistane to NORAD under the Assistane

Agreement had a budget or 2006 o NOK 2.025 mill, an

inrease ompared to previous years due to the OD.

The aounts show that the total assistane rendered

under the Agreement added up to NOK 1 459 547

(inluding NOK 80 586.05 rom 2005).

Total invoies 2006 amounted to NOK 1 178 740.54.

The remaining part will be invoied in 2007.

1 412 hours were used out o a budget o 1 800 hours.

53 hours were harged by PSA.

Assignments rom NORAD regarding Sao Tome

and Prinipe and Madagasar are reported separately

in setion 6.

Major activities in 2006:

3.1 VISITING DELEGATIONS

The total epenses under the Norad programme or

delegations visiting NPD during 2006 were NOK 107 051.

Epenses related to delegations rom ooperating

partners are harged to the partiular programmes.

Below is inormation about the various delegations

that were related to the international ooperation.

February 16: Innovation Norway. A delegation o 20,representing a large number o Innovation Norway

oes abroad, was inormed o the NPD international

assistane programmes.

Marh 03: Member o Parliament Isabel OrtegaVentura, Bolivia visited Petrad and NPD. She was

inormed about resoure management issuesin general.

Marh 20 - 23, the cEO and 3 olleagues romPetroleum Ageny South Aria to disuss

uture ooperation.

April 21: Minister o Energy, Somaliland. Disussionsregarding petroleum setor governane.

May 08 - 12: 7 representatives o Ministry o Oil Iraqor Joint Steering committee.

May 16 - June 06: 3 representatives Ministry o Oil,Iraq or IOR on the job training.

June 08 - 30: 3 representatives Ministry o Oil, Iraq orIOR on the job training.

June 10 - 30: 5 representatives Ministry o Oil, Iraqor Data Management on the job training.

June 24 - July 05: 5 representatives rom Petrovietnamor Steering committee and geologial eursion.

July 03 - 06: 5 representatives rom Petrovietnamon workshop.

August 22: Diretor General at DPR, Nigeria,Mr Tony chukwueke visited NPD to disuss ongoing

and urther ooperation.

September 18 - 22: 6 representatives o ANP,Sao Tome and Prinipe to disuss planned ooperation.

Assistane rom PSA, SFT and Petrad.

September 25: 3 representatives rom Staatsolie,Suriname - meetings with Petrad and NPD / PSA.

September 27: The president o the Senate in Boliviato disuss uture ooperation.

Otober 18: The Angolan Vie Minister Petroleum with3 olleagues or inormation and to disuss plannedooperation pogramme.

Otober 18: The Minister o Mineral Resoures,Mozambique, with 4 olleagues or inormation and

to disuss a new 4 year ooperation programme as

a ontinuation o the eisting programme.

Otober 24: The Ambassador o Madagasar toNorway or inormation o planned ooperation.

November 20 - 24: 4 representatives rom Ministryo Oil, Iraq or Joint Steering committee

November 26 - Deember 08: 4 representatives romOMNIS, Madagasar on HS&E training assisted by PSA.

November 30 - Deember 01: 3 representatives romBP MIGAS, Indonesia to disuss the use o Plan or

Development and Operations

Deember 05 - 08: Delegation rom Department oMinerals and Energy, South Aria to disuss joint

programme with PSA, Petrad and NVE.

3.2 PROJECT PLANNING

At the start o 2006 several new projets and etensions

o projets were in the planning phase. The ompletion

o these planning proesses has taken some more time

than epeted. In total NOK 315 106 were used or

planning purposes during 2006.

Status o the OD planning ativity at end o 2006:

3.2.1 Sao Tome and Principe

NPD was requested in 2005 by the Norwegian Embassy in

Luanda to assess the need or assistane to Sao Tome and

Prinipe and some planning ativities were arried out.

This work has ontinued in 2006 and in September Agenia

Naional de Petroleo (ANP) visited NPD to disuss a oop-

eration programme. The request was presented in Otober

2006 by ANP to Minister Solheim at the EITI onerene in

Oslo. The OD seretariat has not made a nal ommitment

to Sao Tome and Prinipe, and is urrently disussing theneed or Norwegian support with other donors.

Re. setion 6.11.

3

A S S I S T A N c E U N D E R T H EN O R A D / N P D A G R E E M E N T


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3.2.2 West Arica

An initiative has been launhed or a regional seminar on

the management o geodata and on petroleum setor

governane in Gambia, Guinea, Guinea Bissau, Senegal

and Mauretania. NPD has given some advie in the plan-

ning phase. I the seminar is suessul, The North West

Aria Sub Regional Hydroarbon cooperation Org-

anization (SHcO) will be established with the mission:

- To promote ooperation and progress in the region

onerning eploration or and eploitation ohydroarbons

- Enhane the attrativeness o the region in attrating

ompanies with eonomi and tehnial apaity to

arry out eploration or and eploitation o

hydroarbons in a sae and prudent manner

- Support to the petroleum industry, to programmes and

ativities implemented by the SHcO member ountries

The initiative has been urther developed in 2006 with

partiular ous on assistane to these ountries in estab-

lishing proesses or assessing the potential or laims

under the UNcLOS. OD is evaluating the initiative.

3.2.3 Angola

Follow up ativities regarding the MINPET appliation or

a phase II programme. The agreement between Angola

and Norway was signed on the 4th Otober. Meetings

were onduted in Oslo during the EITI onerene and

the Vie Minister or Petroleum and the programme o-

ordinator visited NPD on Otober 18th. The ooperation

agreement between NPD and MINPET is planned to be

signed september 2007. The programmehave a duration

o 3 years and a budget o NOK 27 mill.

The 2006 planning osts also inlude ost or auditing

the phase I programme and or oordination with other

Norwegian institutions whih will provide tehnial

servies under the new programme.

3.2.4 South Arica Phase III

The main omponents o the new South Arian En-

ergy Setor Poliy Researh and capaity DevelopmentProgramme, the South Aria III programme, are the

responsibility o Department o Minerals and Energy. This

programme was originally launhed in 1996. NVE has

been nominated the institutional ooperation partner

in Norway. I required PSA, Petrad and NPD will provide

servies as subontrators to NVE.

The National Oil company Soekor was split in two parts,

the ommerial arm PetroSA and Petroleum Authority

South Aria (PASA). PASA is responsible or promotion

and liensing and has beome the new Upstream Regu-

lator or the petroleum setor in South Aria under thenew Mineral and Petroleum Resoures Development At.

PASA will be an ative partner in the South Aria III

Programme. The NPD has assisted PASA in planning o

their programme business plan, re also ativities reported

under setion 6.12, the South Aria projet. It is epeted

that the PASA / NPD ooperation will ommene during

rst hal 2007.

Photo: Erling Kvadsheim


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3.2.5 Madagascar

Based on an appliation rom Oe or National Mining

and Strategi Industries (OMNIS) in Deember 2005 the

OD steering ommittee deided that Madagasar

should reeive short term support and that a long term

programme was a possibility. The NPD partiipated on a

at nding mission to Madagasar in week 9. As a ollow

up o the mission, a short term support programme was

designed, organized through Petrad. NPD was requested

by Norad in August to assist Madagasar to develop themain programme and to ailitate o-operational

ativities and support until the long term programme

ould be signed. Re. setion 6.7.

3.2.6 Bangladesh

The Asian Development Bank (ADB) has agreed to nane

a projet or inreasing the apaity o the natural gas

transmission and distribution network in Bangladesh

- a USD 230 million programme. The Norwegian Embassy

and ADB are disussing how to inlude an element o

institutional support rom Norway to the petroleum setor

in Bangladesh under the umbrella o the ADB projet. Aontinued support to the Hydroarbon Unit is still being

onsidered. A planning mission is sheduled or 2007.

3.2.7 Oil/fsh/environment

In ooperation with PSA, SFT and the Institute o Marine

Researh (IMR) NPD has prepared a report dealing with

governane issues involving the petroleum setor, man-

agement o aquati lie and environmental management.

This report was presented to NORAD and MFA in 2005 and

a ollow up meeting was alled by NORAD in June 2006.

The drat pilot projet made or Angola, to be inluded in

phase two o the MINPET programme, has been disussed

with IMR to oordinate this omponent with the ongoingIMR support to Angola.

This kind o ross setor support is relevant also or other

ountries and in some areas a regional approah to these

hallenges will be very relevant. Suh support will also be

at the ore o the new OD initiative.

3.3 PROJECT MANAGEMENT AND COORDINATION

NPD maintains a lose ontat with the OD seretariat

in NORAD, with the MPE, PSA, PETRAD, INTSOK and other

institutions regarding the implementation o eisting

programmes and planning o new programmes.Eperiene rom ongoing or ompleted programmes

an represent valuable input to other programmes.

In the same way the dierent OD o-operating institutions

an also benet rom mutual ehange o eperiene. Most

o the programmes require input rom several institutions

and onsultants. A lose ontat with other institutions in

Norway and with onsultants, researh institutes and

training institutions is thereore neessary.

NPD puts partiular emphasis on quality ontrol and on

transer o eperiene and ompetene between the

dierent projets. A lose ontat with the NPD manage-

ment is also required to be able to oordinate the inter-

national assistane work with the NPDs own work in a

smooth manner. The total osts or administration and

oordination in 2006 were NOK 468 974.

3.4 TECHNICAL ASSISTANCE TO NORAD

The NPD has rendered assistane in various areas,

rom part or ull assessments o partiular projets to

general advie regarding petroleum setor assistane,

some eamples:

Assistane regarding the tendering or and ollow upo an eternal Assessment o Petroleum Setor

Assistane

Presentation on NORAD / WB: Private InvestmentForum Workshop

Partiipation at the Trade and Industry conereneon Development Assistane

Develop disussion paper on EITI in relation to theMozambian Petroleum Setor

Partiipation on the EITI conerene in Oslo Update report to OD on Oil, Fish and

Environmental management

Presentation on World Bank Gas Flaring RedutionInitiative (WBGFRI) conerene in Paris

Presentation at Saety and Emergeny PreparednessWorkshop in Ghana

Provide input to OD disussions on mandate,organisation et

Establish routines or and aess to data regardinginternational petroleum resoure data

Deliver spei ountry reports on petroleumresoures to OD on request

United Nations, Law o The Sea: Design o projetsto prepare ostal and island states in the third world

to prepare laims or an etended ontinental shel.

Disussions also with UN GRID, Arendal.

Total osts or these ativities or NORAD in 2006 were

NOK 257 298.

3.5 INFORMATION AND TRAINING

It is very important to disseminate inormation to the

parties involved,and to the publi in general regarding

development assistane, to inrease the awareness o

suh issues, to reate disussion and to get valuable

eedbak. A number o inormation ativities were

arried out in 2006:

Further development o our web site on www.npd.no A omprehensive 2005 Annual report on the NPD

institutional ooperation programmes was

prepared and distributed to ooperating

institutions, NORAD, MFA, Embassies and to the

industry (2000 opies)

Presentation to Innovation Norway Oil and Gasdelegation in Stavanger

Presentations at INTSOK network meetings Inormation or NORAD ellowship students at

NTNU and UiS.

Inormation on institutional assistane andresoure management to a large number o

ountry delegations and to other donor ountries


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Inormation on institutional assistane andpetroleum resoure management to NGOs like

Global Witness, Publish What You Pay, Open

Soiety Institutes Revenue Wath Programme

Presentation to NPD employeesTo urther develop the internal ompetene, internal

workshops were arranged and relevant ourses were

provided or employees.

Total ost or these ativities or NORAD in 2006

were NOK 230 532.

3.6 NORAD/OD ACCOUNTS 2006

The NORAD aounts in NPD have been approved

by the State Auditor or 2005.

The aounts 2006 are given in the ollowing table.

The aounts do only inlude work perormed diretly

or NORAD/OD. The bilateral projets are reported

separately in hapter 4. The rate or onsultanyassistane in 2006 was NOK 730.

NORAD/OD aounts 2006

3.7 NORAD/OD BUDGET AND PLANS 2007

Budget and plans or 2007 show an epeted inrease

in the work load, but eperiene tells us that the plans

requently have to be hanged due to unoreseen

irumstanes. OD is still in the start up stage and it is

diult to know when new projets will start. The budget

represents a level that an be aommodated by NPD.

The budget or assistane to Norad/OD is based on

a hourly rate or 2007 at NOK 730.

The ous on quality ontrol, transer o ompetene

between projets and training o new personnel will

ontinue. The general high work load in the NPD and

the industry due to high oil pries will make aess to

key personnel a hallenge. We epet an inreased

interation with other institutions due to the wider

ous o the OD programme. Good oordination will

be very important to maintain quality and eieny.

In the 2007 budget NPD plan or:

An inrease in the number o delegations omingto learn about petroleum setor governane

Start-up o long-term projets in Bangladeshand Sao Tome.

Some assistane and progress in planning ora long term projet in Bolivia and possibly Sudan

Planning short term rst line assistane totwo or three new OD ountries

Tehnial assistane regarding Support to ountries preparing laims under

UNcLOS. The NPD is having a lose ontat withUNED/GRID, Arendal in these matters,

Support to NORAD in ooperation withthe World Bank

Support regarding the Global Gas FlaringRedution initiative

Support to OD regarding EITI Assistane regarding HS&E and

emergeny preparedness (PSA)

Assistane regarding the interation betweenshery, petroleum ativity and the environment

Epanded dissemination o inormation, partiularto non-Norwegian institutions and individuals.

Costs Hours Costs Budget Dierence

*Deember 05 80 586.05

Delegations 127.00 107 051.00 226 000.00 118 949.00

Projet planning 242.00 315 105.79 405 500.00 90 394.21

Administration and oordination 615.00 468 974.29 538 000.00 69 025.71Inormation and training 183.00 230 532.00 302 500.00 71 968.00

Tehnial assistane 245.00 257 297.82 472 000.00 214 702.18

2006 costs 1 412.00 1 378 960.90 1 944 000.00 565 039.10

Invoied 2006 1 178 740.54

To be invoied 2007 280 806.41

NORAD/OD budget 2007


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N

A U S T R A L I A

Venezuela Nigeria

Angola

Sao Tome &Principe

South AfricaMozambique

Madagascar

Seychelles

TanzaniaSri Lanka

Singapore

Bangladesh

IranIraq

Sudan India

China

Kazakhstan

Azerbaijan

Russia

Japan

South Korea

Vietnam

Thailand

Cambodia

Malaysia

East Timor

Nicaragua

MexicoPhilippines

IndonesiaPapaNew Guinea

Bilateral agreementsof collaboration

NoradCCOP

Norad projectsunder planning

Nowgan Pou Dcoa


2006-2007

17

countries with NPD bilateral projets are marked on

the map below. Most o our projets are in Aria. We

also have some important projets in Asia. Niaragua

represents the only projet in Latin Ameria. One o theprojets, the ccOP PPM projet, is a multilateral projet.

Our ooperation partner is an international organisation

serving a number o ountries in South East and East

Asia. The bilateral projets are all long term projets o

3-5 years duration.

4.1 ACCOUNTS 2006 BILATERAL PROJECTS

The status and progress o eah projet is reported

separately in hapter 6. As a general omment the NPD

an report a redution in the total number o NPD/PSA

hours used o 20 per ent. Hal o the redution was due

to redution in the PSA servies. The reported osts o

NOK 25 mill, whih is the same level as in 2006, inludeonly osts booked in the NPD aounts. Several projets

manage signiant unds to meet loal epenses or they

do the prourement o eternal advisors and servies

loally. 62 per ent o the NPD osts are or eternal

servies and supplies, onsultany being the most

important.

The NPD used about 4.75 man years or this work in

2006 and we reeived 0.2 man year assistane rom PSA.

4.2 PLANS 2007

For 2007 the NPD plans an inrease in the ativity levelbak to the 2005 level o 10 000 hours. Large projets

suh as Mozambique, Nigeria, Iraq and Timor Leste are

progressing well and the plans are relatively rm. In

addition the new Madagasar projet and the Angola

Projet will see inreased ativity. Some delays in ativi-ties may our and surprises are not a surprise in this

business. The projet in South Sudan, urrently man-

aged by PETRAD, and Sao Tome also assoiated with

muh unertainty and the uture involvement and role

o the NPD is unertain. This omment is also appliable

to the Bangladesh projet, whih will be managed by

ADB. At the turn o the year, the NPD will most likely

have apaity to take on new tasks under the OD

programme .

As it looks at the moment, the eisting MPE approved

apaity limit or this kind o work o seven man years,

will be adequate in 2007. Demand or partiular om-

petene, like data management and geo sientiassistane, may present a hallenge. It is thereore very

important to qualiy new resoure persons in the time

ahead. The NPD also have the option to employ new

personnel or to buy suh apaity in the market.

In this part o the Annual report we present a short sta-

tus or all ongoing projets under the management o

NPD and PSA with nane rom Norad and MFA. Eah o

the projets are ormally reporting the progress and the

plans diretly to the respetive embassies or to NORAD.

4

B I L A T E R A L P R O J E c T S


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Projets Hours

OD 1800

Iraq 1300

Sri Lanka 200

South Aria 400

Vietnam 0

ccOP 300

Vitra 2 300

Timor Leste 1000

Nigeria 1400

Tanzania 150

cambodia 500

Sao Tome 200

Madagasar 1200

Mozambique 1350

Angola 800

10900 6.61 Man years

PSA, others 900 0.55 Man years

NPD 10000 6.06 Man years

Projets Hours Amount Budget Dierene

OD 1 412.00 1 378 960.90 1 944 000.00 565 039.10

Sri Lanka 205.00 1 860 503.50 2 115 000.00 254 498.50South Aria 158.00 173 358.11 792 000.00 618 641.89

Vietnam 166.00 271 473.80 271 473.80 0.00

ccOP 407.50 544 326.40 438 000.00 - 106 326.40

Vitra 2 373.00 976 572.18 1 200 000.00 223 427.82

Timor Leste 866.50 10 903 650.19 14 095 000.00 3 191 349.81

Nigeria 1 097.75 2 345 147.22 4 000 000.00 1 654 852.78 Tanzania 245.50 524 257.67 855 500.00 331 242.33

cambodia 235.50 318 895.43 3 765 000.00 3 446 104.57

Sao Tome 137.50 462 293.99 2 192 000.00 1 729 706.01

Iraq 1 645.00 3 617 139.75 6 314 000.00 2 696 860.25

Madagasar 394.00 776 982.60 2 175 000.00 1 398 017.40

Mozambique 853.50 1 333 340.92 2 843 200.00 1 509 859.08Angola 5.00 4 826.75 103 000.00 98 173.25

Total 8 201.75 25 491 729.41 43 103 173.80 17 611 444.39

The plans are presented in the table below.

Out o the planned 6.6 men years, NPD hope to

receive 0.55 rom PSA, almost back to the 2005 level.

2006 Account Bilateral Projects

Assistance rom externally

recruited resident advisors

is not included.



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5.1 IMPORTANCE OF RESOURCE

MANAGEMENT SySTEM

Managing the Oil and Gas Resoures

- the Norwegian wayIt is generally appreiated that the management o

the Norwegian oil and gas resoures has been airly

suessul, institutions playing an ative governane role

proteting the interest o the ountry and high

national partiipation in all stages o the ativity.

The development o a state pension und based on

petroleum revenues is taking are o some o the

inter generation aspets o this ativity.

In our institutional assistane projets, we are

drawing on the eperiene gained sine the ativity

started in the1960s. Some o the major issues in this

regard are presented below, but it is important to

understand that what Norway ahieved, was a result

o the work o partiular individuals, our traditions and

not the least the aess to apital, tehnology and

human resoures that ould be trained to serve this new

industry. Nevertheless we still hope that some o the is-

sues related to petroleum resoure management are o

general interest to many petroleum produing nations.

The goal o Norway as a petroleum produing ountry

is to maimise the long-term soial value o the

hydroarbon assets. To seure this objetive it has

been o great importane to establish a legal andontratual ramework and reate an eient and

ompetent publi petroleum administration that is able

to serve the ountrys needs. The ompetene o the

ompanies, the eieny o the tehnology, strategies

or state partiipation, loal partiipation, data manage-

ment, reservoir management, HS&E, and or the sal

system; they all infuene the resoure reovery and the

eonomi eieny o the upstream petroleum setor.

The rst prodution lienes on the Norwegian

ontinental shel were granted in 1965, and the

rst eploration well was drilled the ollowing year.The Ministry o Industry had the onstitutional

responsibility or these ativities.

As ativities inreased during the 1960s and ater a ma-

jor disovery in 1969 the need or organisational hange

gradually beame apparent. In 1972, the

Storting (Parliament) deided to establish the

Norwegian Petroleum Diretorate (NPD) as a

regulatory ageny and Statoil to take are o the

states business related untions. The poliy and

the legal ramework or the ativity were still the

responsibility o the Ministries and the Storting.

Eploration or hydroarbons oshore Norway started

in the North Sea in 1966 and moved into areas in the

Norwegian Sea and the Barents Sea in 1980. New large

areas were opened or eploration in deep waters (1000-

2000m) in the Norwegian Sea in 1994.

The urrent level o oil prodution is approimately

2.8 mill. bbls/day, and the amount o gas transported to

the market and sold eah year is approimately 90 bln.

ScM. At present this makes Norway among the largest

oil and gas produing ountries in the world and it is

epeted that Norway will ontinue to be a major oil

and gas produer or several deades.

In Norway, an ambitious strategy has been established

to maimise the long-term value o the petroleum asset

in order to improve the ortune and wealth o the oun-

try. An important element in the Norwegian poliy is to

nd a good balane between the national interests and

the interests o the multinational ompanies. It is impor-

tant to reate win-win situations. A good environment

or ooperation and dialogue between the authorities

and the ompanies has been reated.

It has been o great importane or Norway to establish

a legal ramework that at all levels serves our spei

needs. Sovereignty to the Norwegian ontinental shel

was prolaimed in the royal deree and at o 1963.

The Royal Deree o 9.4.1965 pawed the way or the

onessionary system that we still operate today, where

most o the general terms are to be ound in the, at anytime, appliable laws and regulations. The key At or the

petroleum ativity is the Petroleum At, but also ats like

the Pollution At and the Working

Environment At apply to the petroleum

ativity. By virtue o the ats and as a supplement

to these, regulations have been issued.

The neessity or petroleum resoure management

is stipulated in the Petroleum At 1-4:

Management o petroleum resources shall be carried out

in a long-term perspective or the beneft o the Norwegiansociety as a whole. In this regard the resource management

shall provide revenues to the country and shall contrib-

ute to ensuring welare, employment and an improved

environment, as well as to the strengthening o Norwegian

trade and industry and industrial development, and at the

same time take due regard to regional and local policy

considerations and other activities.

An important part o the poliy established when the

petroleum ativities in Norway started, was the part

onerning an eient integrated publi petroleum ad-

ministration. The ambition was, within spei important

areas to reate the same level o ompetene in the ad-

ministration as in the multinational oil ompanies. This

5

A R T I c L E S


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was a prerequisite in order to reate an environment or

eient ooperation and dialogue between the Norwe-

gian authorities and the oreign ompanies.

In Norway several ministries, diretorates and

agenies take part in the petroleum administration.

The ministries are dealing with questions o priniples,

general poliy, legislation and onession poliy. Then,

underlying the ministries, several diretorates and agen-ies have been established as advisory bodies to the

ministries with speial responsibility related to tehnial

matters and day to day supervision o the ativity. The

oil ompanies do their job whih is to produe petro-

leum and deal with the ommerial interests o the om-

panies. It has proven important or the overall eieny

in the petroleum industry that the oil ompanies are

subjets to ordinary ommerial ompetition.

The Ministr o Petroleum and Energ (MPE)

has the overall responsibility or the petroleum ativities

on the Norwegian ontinental shel. The Ministrys taskis to ensure that the ativities take plae in aordane

with the guidelines o Storting and the parliament.

Health, Saet and Environment HSE

Within the HSE area, the Petroleum Saety Authority

Norway, the Norwegian Pollution control Authority,

the Norwegian Soial and Health Diretorate ooperate

in a joint regulatory regime on saety, health and

environment.

Petroleum Resource Management

The tehnial issues related to eient petroleum

resoure management are taken are o by theNorwegian Petroleum Diretorate (NPD).

The Norwegian Petroleum Diretorate is

administratively subordinated to the Ministry o

Petroleum and Energy, and advises the Ministry on

matters onerning management o the petroleum

resoures on the Norwegian ontinental shel.

In order to obtain an eient eploration and eplo-

itation proess whih maimises the soial value or

Norway, a struture to assess and monitor the ativity

has been established. This struture is based on the

ollowing main elements:

1. Goal setting:The goal is to maimise the eonomi

value within eah single phase o the ativity and assure

that the long term value reation along the whole hain

is satisatory. To make sure that the dierent ativi-

ties are in onurrene with the goal, a set o reporting

systems and methodologies or evaluation have been

established.

2. Experts and professional staff: In order to perorm

analyses, to evaluate the impat o dierent strategies

and to pursue uture planning the MPE as well as the

NPD has been staed with eperts and given ailities

that enable the authorities to make independent evalu-

ations. The MPE is staed with highly qualied eperts

within legislation and eonomis, while the NPD has a

multidisiplinary sta with ompetene within all the

lassial petroleum disiplines like geophysis, geol-

ogy, reservoir engineering, aility engineering, resoure

eonomis, et.

3. Data and information:The authorities resoureadministration depends on aess to inormation and

doumentation rom the ompanies. In Norway the

petroleum legislation has a large number o rules whih

demand the liensee/operator to submit inormation.

Furthermore representatives rom the MPE and the NPD

have the right to be present as observers in the liaison

ommittees established in onnetion with the ativities

within eah liene.

4. Reporting: In addition to the reporting requirements

the oil ompanies and the industry,the NPD on regular

basis reports to the MPE on the status o the ativities.The status o the petroleum ativity is reported to the

publi through Fats, a omprehensive annual

publiation overing all phases o the ativity.

A White paper on the status o the petroleum industry

is prepared and orwarded to the Parliament or inor-

mation and evaluation every seond year. This report

may also inlude reommendations or industrial plans

that the Storting has to onsider.

The Diretorate keeps trak o all the important data in

onnetion with the petroleum ativity, inluding a

omplete, up-to-date survey o reserves, resoures,

prodution, osts and other relevant inormation.

All data are reported to the databases digitally either

online or on media, and seurity and rules o onden-

tiality are highly respeted. The data are regarded as a

valuable national asset with due attention to sae stor-

age, maintenane and managers attention. This ativity

is deribed in more detail in setion 6.3 o the report.

Two times a year the Norwegian Petroleum Diretorate

(NPD) is up-dating the oreast or estimated petroleum

prodution rom all elds on the Norwegian ontinental

shel. Foreasts o osts related to the development andoperation o the elds are up-dated. These are based

on reports rom the oil ompanies. The reports inlude

the operators best estimates regarding prodution

and operating ost rom all elds. Also plans or uture

investments are reported.

The oreasts by the NPD serve as one o the main

elements in national budgeting and eonomi

planning and are important in estimating total net

present value o the petroleum assets.

Prudent reservoir management is a basi requirement.

The liensee has to monitor the reservoir with regard

to prodution, pressure and fow onditions.


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All inome and epenses rom Norwegian upstream

petroleum operations are onsolidated on a orporate

level, there is no ring ene between the lienes.

The ta system is dened in the law and has been

adjusted rom time to time to refet the protabilityand the hallenges o the industry.

In Norway several initiatives have been taken to improve

development eieny and inrease the total value o

the petroleum assets though etensive ooperation

between the authorities and the oil ompanies. The

initiatives relates to proedures or more ost eient

eploration and development, tehnologies or inreased

oil reovery as well as improvement o the administrative

strutures. The Norwegian eperiene is that an open

poliy enouraging transpareny and lose dialogue

between the parties involved reates the best basis orooperation and good results. It is important that the

objetives o eah party are mutually understood and

that the work perormed among the dierent partners

are based on a ommon set o inentives. This has proved

valid or the ooperation taking plae in Norway, and

it is also valid or the international ooperation. In this

regard, it has been important or Norway to partiipate ininternational organisations working to ahieve prudent

management o petroleum resoures and to learn rom

other ountries.

With a proper system or petroleum resoure

management on ompany level as well as on govern-

mental level the potential or improving the reovery,

the eieny, the seurity o supply and the total value

reation o the petroleum setor is substantial. This is

o prime importane or the world at large, partiularly

or less developed ountries where the need or energy

at aordable pries are important to support eonomigrowth and redue poverty.

Photo: ystein Kristiansen


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5.2 INSTITUTIONAL COOPERATION BETWEEN

MOzAMBIqUE AND NORWAy REGARDING

GAS METERING

The loal authority in Mozambique, Instituto Nationale

de Petrleo (INP) has established a ruitul ooperation

with the NPD in the eld o gas metering. Based on Nor-

wegian eperiene gained over a long period o time,

the INP has quikly managed to establish routines or

the measurement and reporting, in order to assure thenational interests o the gas ativities in Mozambique.

A ruitul ooperation has also been established with

the operators o the metering systems, who needed to

establish ompetene and proedures to run suh

large sale metering ailities.

The gas rom the elds Temane and Pande in

Mozambique is proessed at a central Proessing

Faility (cPF) near the gas elds. Produed gas is

transported via a 26 inh steel pipeline to Seunda

in South Aria. The pipeline is 865 km long. Theoperation o the gas elds, the transport and the

marketing o the gas is perormed by subsidiaries o

Sasol, ( South Arian Syntheti Oil ltd). Sasol has a

high level o ompetene in oil/ gas ativities as

well as prodution o hemials.

Adjaent to the South Arian borderline a pipeline

branh is taking a minor part o the gas to an industry

area named Matola, lose to Maputo. This branh is

operated by an independent ompany. Here the gas is

delivered to loal industries like aluminium prodution,

ood industry et. A ompressed natural gas plant (cNG)

is also installed here.

The aility in Temane removes water and ondensate

rom the well stream beore the gas is injeted into the

pipeline. The ondensate is transported with roadtank-

ers to Maputo, or urther shipment to the marketplae.

The prodution started in 2004. Instituto Nationale de

Petrleo in Maputo, (INP) is the government body

responsible or the supervision and auditing o the

petroleum ativities, inluding sal metering ativities.

In 2004, regulations pertaining to health, saety,

environment as well as resoure management was

put into ore. Inluded are also requirements or the

sal metering.

Audits o the fscal metering sstems

The pipeline system has three sal metering points;

at the inlet, at the main outlet in South Aria, and atan otake bringing gas to Matola. The results o the

outlet-metering is ompared to the inlet metering. The

orie metering system at the inlet is the primary sal

metering point. At the outlet in South Aria an ultrason-

i metering system is reading the gas volumes reeived.

At the Matola otake near Maputo a gas turbine

meter reads the volumes etrated at this entering

the distribution system o Matola Gas company.

The Norwegian Petroleum Diretorates unit or sal

measurement has assisted INP in their auditing o the

metering systems and the required reporting routines.Ater prodution start up, a metering audit revealed

requent deviations rom the speied requirement o

the system. Sasol quikly managed to establish routines

or alibration and operation, ommensurable with the

steering douments. Also at the Matola otake, mis-

measurement was revealed and remedied. At the

Seunda outlet the ultrasoni meters seemed to work

well, however a sotware upgrade or improving the

ontrol o the meters was installed ater a metering

audit.

Pipeline sstem balance and reporting.

The pipeline operator has established a monthlyreporting routine, omparing volumes entering into

the pipeline with volumes taken out o the pipeline.

This report gives the sal values, and INP reeives a

opy. It is a ontinuous hallenge to improve the pipe-

line balane urther, and this work is still not nalized.

Compressed natural gas container at Matola flling station.

INP and Sasol inspects orifce o gas metering at Temane.

Photo: Jan Stenlkk


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5.3 PETROLEUM DATA MANAGEMENT.

instrumental in regulating upstream activities to

the beneft o the people - the experience o NPD

NPD was established in 1972. Seismi ativities had been

ongoing or about seven years, and by that year some 80

eploration wells had been drilled. The fow o data was

already very large.

The authorities need to have aess to relevant inorma-tion generated by the industry was reognized. Rules

and regulations were issued to ensure a suient fow

o data to the NPD. The NPD sta were ensured aess

to tehnial and management meetings between the

operator and liensees in all prodution lienes, and a lot

o routine reporting and opies o seismi data and well

logs were sent to the NPD.

coping with all this data, oten available on lms and

non-digital data ormats, was a major hallenge or NPD

as the data kept growing with the upstream industry

ativity in general. Eorts were made to establish internalknowledge on how to handle the various types o data

and how to organize internal digital databases o ore

samples, seismi setions and well logs. The NPD man-

aged to keep ull ontrol o the seismi data aquired on

the Norwegian ontinental shel by various parties (oil

ompanies and spe ompanies), and the NPD-systems

were ontinuously enhaned as tehnology and

omputer apabilities improved.

The need or inormation was not limited to opies o

the operators tehnial data and reords o produed

oil and gas. The NPD asked or resoure estimates, esti-

mates o uture prodution and proles o present anduture ependitures. In addition to this, inormation on

environmental disharges and emissions rom the

oshore installations were asked or and ompiled

by the tailor made internal NPD omputer systems.

NPDs ability to work with all this data and top it with

internal proessional analysis and evaluation ompe-

tene, made it possible or the Norwegian authorities

to build the petroleum poliy on a omprehensive at

base, independent rom the big ompanies. The stream

o inormation to NPD also made it possible to alibrate

both resoure management regulations and sal rameondition to the benet o both the government and the

soiety. A vast inormation base in ombinations with

proessional ompetene have never been a draw-bak

in negotiations on terms and onditions, and there is no

doubt that the NPDs ability to manage petroleum inor-

mation has been and is one o the key reasons or the

suessul management o this setor that has

grown to beome Norways greatest asset.

One o the guiding priniples in the Norwegian pe-

troleum data poliy has been to oer as muh data as

possible to the publi. During the 35 years o operation,

NPD has published maps, tehnial, researh and statis-

tial reports, publiations and booklets. Now the NPD

webpages with all its ats and artiles have beome an

important distribution hannel. The general inormation

is mostly used by individuals and newspaper journalists,

in this way seuring the publis need or inormation in a

demoray like Norway. The tehnial inormation is used

by oil ompanies, researh institutes and entrepreneurs

with reative and new approahes to eploration. For the

last ew years, areas have been alloated to oil ompanies

or the seond time ater the rst ompanies ailed to dis-

over petroleum. In this situation, the value o publishingprevious reported inormation is very muh appreiated.

Even i the authorities have enouraged oil ompanies

to trade data among themselves, there is no doubt that

the release regulations, whih say that all data should be

made publi ater a ertain period, have ontributed to

onsiderable value reation both or oil ompanies and

soiety. In this way the authorities keep ontrol o the

data instead o leaving this to the ommerial interests

o data brokers.

One prerequisite or suh a strategy is, however, toontinuously spend suient resoures, build tehnial

IT solutions and maintain a devoted ompetent sta to

manage the systems and keep the quality and om-

pleteness in databases and arhives. This requires

reognition and support rom the top management

regarding petroleum data management.

How NPDs eperiene an benetdeveloping ountriesDuring the last years we have eperiened that other

ountries nd themselves in the same position as

Norway at the end o the sities and in the early seventies.

New petroleum provines are emerging and the need orinviting international oil ompanies to invest in petrole-

um eploration and prodution is inreasing. Eploration,

partiularly in deep waters, is very epensive and most

nations are dependent on involving multinational oil

ompanies to share risk and rewards. The apaity o

national oil ompanies is normally not suient. To

organize bid rounds and selet the right ompanies to

ahieve a balaned risk/reward situation is demanding.

It is also more ommonly reognised that there is a need

or a separate regulatory body when oreign investors get

involved. The national oil ompanies have traditionally

pursued both ommerial, supervisory and politial tasks.But the new situation requires a regulatory body inde-

pendent o the national ompanies.

Operating an epanding petroleum ativity requires

well planned administrative systems to keep trak o all

rights and obligations. To ahieve quality in suh reords

may be almost impossible i the systems are not properly

organized rom the beginning. Tedious and ostly law

suits may be the result o unlear denitions o rights

and area management.

Also when preparing bid rounds and awarding


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eploration and prodution lienes to oil ompanies, the

authorities knowledge o geologial and om-merial potential is important. A modern resoure

lassiation with independent and reliable data is

o vital importane. The ombination o proessional skills

and relevant geologial data is a powerul tool

or the authorities. A legislation(petroleum at and regu-

lations) should be established as early as possible in all

petroleum produing ountries to ensure a

suient fow o inormation to the authorities.

In the proess o inviting investors to the ountry,

promotion material is important, and internal

produed analysis, data pakages and illustrations

add preerenes in the ompetition whih eists

among new petroleum ountries. Easy aess to

data will lower the threshold or oil ompanies

who want to investigate new rontier areas.

What developing petroleum ountries need is

very muh the same as we over time have

developed or Norway, suh as

Systems to keep trak o obligations and rights Inventory o resoures and potentials Inventory o petroleum resoures and

potential or new disoveris Easy aess to data or resoure assessment

Promotion material, tehnial data andquality statistis or oreign investors

Prodution and eonomi data or taingand statistial purpose

Transparent systems to ease aess or avariety o users

Internal skills/petroleum administrative apaity High quality data or tehnial and

sienti analysis

The NPD has more than 35 years eperiene with

storing data and knows a lot about regulatory agenies.

NPD has by tedious trials and errors developed useul

systems and methods. The biggest market or sotware

vendors is the oil ompanies with their dierent needs.

Thereore there are ew o-the-rak tools or blak

bo appliations to be bought or the regulatory

bodies. It is NPDs goal to maintain internal epertise on

data management matters, in order to avoid being too

dependent on smaller- or world dominating private

onsulting ompanies.

What NPD oers throughooperation projetsData management projets are oten part o institutional

o-operation projets between the NPD and similar

organizations in other ountries. The projets oten aimat improving the petroleum administrative apaity and



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the national ontrol o the petroleum ativities. Some

projets are, however, more spei like establishing seis-

mi tape reormatting apabilities or setting up an arhiveor magneti tapes ontaining digital seismi inormation.

As the sope o the ooperation may involve both

Resoure Management and HSE (Health, saety and

Environment), it is o vital importane to lariy the o-

operating organization s role and relation to other

agenies. The data management solution must be tailored

to t the relevant responsibilities, and a realisti level o

ambition must be set. The hallenge is oten to tailor a

total solution that an serve dierent departments in the

same ageny or ministry, improving ommuniation and

ollaboration and to avoid double storage o the same

data in parallel systems.

As the role o the ageny is learied, the net step is

to review the petroleum legislation and to look or

possible improvements related to data management.

This ould be establishing who is entitled to inormation,

streamlining reporting regulations and ensure onsistent

denitions o rights and obligations.

Eperiene shows that terminology and denitions used

by dierent departments and proessions are oten not the

same. This needs attention, as any integrated system relies

on a shared understanding o terminology. Lak o qualityin database solutions is oten aused by misunderstand-

ings and dierent use o same words. I standardisation o

terminology is negleted, this may bak-re later. As ar as

international standards are available, these are important

input to this work. NPD projets oten inlude workshops

involving proessionals rom dierent departments and

proessions (geosientists, engineers, eonomists, lawyers

and IT-people). The purpose is to agree upon a ommon

understanding o all data types and their relation. Suh

workshops may also deal with mapping eisting work

proesses in the governmental organization as they

infuene the data management solution. The produtater this eerise is a onsistent, multidisiplinary data

model. The goal is also to sort out inonsistenies between

terminology used in the legislation and the understanding

among the tehnial sta. Agreeing upon a resoure

lassiation to be used is also important.

In the projets the NPD representatives together with the

loal sta onstrut a MS Aess database to store all basi

inormation on ompanies, ontrats/onessions, wells,

and seismi surveys. This pilot database (sometimes also

alled ultural database) will serve as a reerene

database to other detailed tehnial databases, or as

links to vendor data bases (like PetroBank). The lue in

suh a national data repository onept is to maintaina unique identiation (ID) whih makes the dierent

physial databases behave like one big virtual data

warehouse. A long - term solution - a permanent

multi-user administrative database based on Orale or

MS-SQL server will later replae the pilot database.

Part o the national data repository onept will also

involve an integrated geographi inormation system

(GIS). With a populated GIS useul maps an be

onstruted, aurate liene area management

perormed and an overview o well loations, disoveries,

elds, pipelines et is available. GIS will also be an impor-

tant tool or quality ontrol o old reords when inorma-

tion in old douments are onverted into the omputer

les. NPD strongly reommends generating internal

apaity to handle suh tools, and workshops and training

ativities or the loal sta are a natural part o the oop-

eration programme. Another important reommendation

is to selet a small group o people to take the role as data

ustodians. These will manage the quality o the various

data types, and hopeully over the years represent the

ontinuity and integrity o the inormation.

Aording to loal needs and publiation poliy,

NPD also assists in establishing internal loal inra-struture (LAN and servers) and tehnial solutions to

ontinuously update an internet homepage with links

rom the internal databases o administrative data.

The goal o these projets is that the governmental

ageny over a period o 3 - 5 years, should build their own

apaity to maintain the ontent o the databases, inte-

grate this as part o the regular work proesses o their

regulation role and manage urther epansion into new

data types, more advaned inormation tehnology and

possible ooperation with loal and international oil

ompanies and data management onsulting ompanies.

countries where the oil ativity is about to start, will

benet strongly by building suh a data management

oundation up ront o the ativities, but we also see

that nations with a long oil history an inrease eieny

and improve the quality o their national ontrol by

applying the priniples outlined above.


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OD Projets in NPD

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6.1

A N G O L A

Project:

Institutional ooperation programme regarding petroleumsetor development MINPET NPD (Phase II)

Cooperating institution:Ministry o Petroleum (MINPET)

Goals: To promote improved management o national petroleum resoures as

one o the tools or sustainable eonomi and soial development in Angola.

Purpose: Improve apability to eerise regulatory ontrol and to develop poliies

and strategies to ensure better administration o the Angolan petroleum resoures.

The Programme will work in fve areas o cooperation:

Regulatory ramework Responsibilities and organisation o MINPET

Data management and inormation systems Multi-setor ativities Angolanization and general trainingProject period: 2007 - 2010

Total budget: NOK 27 mill

cOUNTRY FAcTS:Ofcial Name:

Republi o Angola

Capital:

Luanda

Chie o state:

President Jose Eduardo

dos Santos (sine 21

September 1979);

The president is both

hie o state and heado government

Population:

12 127 071 (July 2006 est)

Petroleum sector,

key fgures:

Average oil prodution:

1.24 mill bbl/day (2005)

Gas prodution:

8.8 bill m3 (2005)

Organisation o the sector:

Ministry o Petroleum

Poliy, regulatory and

supervisory body

Soiedade Naional de

combustiveis de Angola

(Sonangol)

State owned Oil company.

Sole onessionaire and

partner in onession

agreements and in

some PSAs with theinternational oil ompanies

Soure: PetroView


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6.1

Programme:

Inrease MINPET ontrol o ativities o oilompanies in the eeution o petroleum industry

operations regarding protetion o the

environment, saety and health. Build apaity in dierent MINPET departments

in poliy ormulation and inormation

management.

Establish petroleum resoure database. Improve administrative IT system. Prepare Projet Proposal on Multi-setor

Institutional Support to Oil, Fish and Environment.

Sharing relevant eperienes at a regional level. Revise Deree 20/82 on Angolanization. Prepare report on how benets o petroleum

eploration in Angola an ontribute to

improvement o sienti knowledge. Arrange petroleum tehnology seminars. Support researh and aademi training in

Angolan institutions.

Assist Agostinho Neto University with sientiknowledge and equipment to provide oil-oriented

aademi ourses and researh projets.

Contact:

MINPET: WWW.minpet.gv.ao

NPD: Else Ormaasen, Projet coordinator,

[email protected]

A brie histor o the cooperation between

MINPET and NPD.

Norwegian assistane within the Petroleum Setor

in Angola started in 1987 when Norway and Angola

signed an Agreement or a our year (1987 - 1991)

assistane programme with a budget o NOK 17

million. The assistane was etended in 1991 when a

new Agreement was signed or a new period o our

years (1991 - 1995) with a budget o NOK 28,5 million.

The objetive o the Norwegian assistane has been to

assist Angola in institutional ompetene building

to improve the government apabilities to develop,

diret and ontrol the petroleum ativity. Later, Angola

requested ontinued assistane and the Phase I o a

new programme was arried out in the period 2000

2004, with a budget o NOK 22 mill.

Ativities 2006 - 2007A Phase II o the new programme was planned by

MINPET with input rom NPD, during the period 2005

2006 and a new Agreement between Norway and

Angola regarding Tehnial assistane in the Petroleum

Setor was signed 4th o Otober 2006. Planning o

the implementation o Phase II o the new programme

was arried out during last quarter o 2006 and the 1st

quarter o 2007.

A delegation rom Norway together with the Ministero development, Mr Erik Solheim and deputy Minister

o Petroleum and Energy Ms. Anita Utseth, visited An-

gola early February 2007 or disussion o urther oop-

eration between Norway and Angola speially in the

petroleum setor. At the same time a delegation rom

NPD had meetings with MINPET regarding the imple-

mentation o the programme ativities. The ooperation

agreement between NPD and MINPET was disussed

during a visit by NPD to MINPET in June 2007.

Plans 2007The agreement between MINPET and NPD is epeted

to be signed september 2007. The work will start 3rdquarter 2007 with 3 years duration and have a budget

o NOK 27 mill. As a starting ativity o the new pro-

gramme, the NPD has proposed a strategy proess to

be arried out within MINPET. This strategy proess is

vital or the perormane and suess o the dierent

programme ativities. The programme will also require

a resident tehnial advisor within MINPET or the dura-

tion o the programme as a prerequisite or eient

implementation o the ativities.


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6.2

B A N G L A D E S H

Project:

NORWAY - OIL FOR DEVELOPMENT DIRECTORATE 2006-2007

Documents

Transcript of NORWAY - OIL FOR DEVELOPMENT DIRECTORATE 2006-2007