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Petroleum industry with huge impact on society

A new analysis reveals that the oil and gas industry employs 225,000 people in Norway. Today, Kristin Færøvik, chair of the board of the Norwegian Oil and Gas association, presented the brand-new study of ripple effects to the Minister of Petroleum and Energy.

“The majority of the current Norwegian population were born after we became an oil and gas-producing nation. That means that most of us have never experienced a Norway without revenues from this industry, which have provided a well-developed welfare state and a high standard of living,” says Managing Director Kristin Færøvik in Lundin Norway.

Haven’t done enough to highlight value creation
An analysis was presented at the Norwegian Oil and Gas annual conference showing the petroleum industry’s overall scope and contribution to the Norwegian economy. The analysis, conducted by Menon Economics, shows that the oil and gas industry employs 225,000 people in Norway.

“Perhaps it is easy to ignore the effects the industry has had for society in the form of employment and revenues. Perhaps we in the industry have not done a good enough job, both as regards measuring ripple effects and highlighting value creation. Among other things, we have largely not included the effect of the export-oriented part of the industry. This has now been incorporated in the calculation,” says Kristin Færøvik.

The analysis also reveals that 8 of 10 Norwegian municipalities finance 10% or more of their operating budgets with income from the petroleum sector. These figures include municipal tax revenues from employees within the oil and gas sector, as well as transfers from the State to the municipality that can be related to oil revenues. This amounted to NOK 43 billion in 2017, if we include revenues for all municipalities across the country.

Ripple effects from Luno II
Lundin’s most recent contribution to ripple effects and value creation is the Luno II satellite development to Edvard Grieg. The Luno II plan for development and operation will soon be submitted to the Ministry of Petroleum and Energy.

“The project has an investment framework of around 6.4 billion, and we expect that about 60% of this will be invested in Norway,” says Færøvik.

This means between 4000-5000 full-time equivalents during the development phase, which will extend to 2021. It will secure jobs in local communities throughout large parts of the country.

“Not long ago, we could read in the local Orkanger newspaper in Trøndelag county which is the location of one of TechnipFMC’s divisions, that they will be increasing the number of employees from 60 to 140, mainly because of the contract they were awarded for Luno II,” says Færøvik.

Some of the other locations that will welcome Luno II revenues include Horten, Lysaker, Arendal, Bryne, Stavanger, Bergen and Kongsberg.

“So, not only are we indirectly contributing to municipal economies; we are doing something that means even more: we are contributing to employment, which is a crucial factor for bringing vitality to local communities all across the country,” says Færøvik.

Image: Activities at TechnipFMC Spoolbase at Orkdal brings positive ripple effects to the local community.