Europe’s burgeoning E&P cities

E&P cities31 August 2013, News Wires – The oil and gas market in Europe continues to be a dynamic landscape for discoveries, drilling progress and field development. Robust licensing rounds and significant acquisitions marked different parts of the continent last year, supported in part by a revival in oil and gas investments. These combined factors have created significant employment opportunities and economic benefits for energy hubs across the region.

Here, Rigzone highlights just a few areas in Europe that have significant oil and gas growth potential and a bright outlook for job creation.

The Hague, The Netherlands
Sitting on the North Sea, The Hague lies at a veritable crossroads within the realms of international relations and global commerce.

As the seat of government for the Netherlands, it hosts scores of embassies, consulates, United Nations bodies and non-governmental organizations. The Netherlands’ favorable business climate, coupled with The Hague’s proximity to the seaport of Rotterdam and Amsterdam’s Schiphol international airport, has also enticed a host of multinational corporations to locate global and regional headquarters in the seaside city of approximately 500,000 people.

“The Netherlands provides an excellent logistics hub,” said Nabil Aldabal, managing director of Aramco Overseas Company, B.V. (AOC), an overseas affiliate of Saudi Aramco headquartered in The Hague. “The Hague itself acts as a strong business gateway to Europe and is classified as a major international business center.”

AOC is one of several major companies in the oil and gas industry with strong ties to The Hague. Royal Dutch Shell plc maintains its global headquarters there, and Total E&P’s Dutch head office is located in the city. Service companies with a significant presence in The Hague include CB&I and Schlumberger Ltd.

In addition to coordinating its service operations from The Hague, AOC initiates much of its new technology development for its European operations from the oil and gas hub, said Aldabal.

“The Hague also acts as a strong base for AOC’s research activities across Europe,” he explained. “These include satellite offices dedicated to research and development in locations such as the Netherlands, France and now the United Kingdom, where we have a presence in the North Sea.”

Outside of work, employees of AOC, Shell, Total E&P and other oil and gas industry players will have no problem finding things to see and do in The Hague. The seaside city boasts two beach resorts as well as extensive green space. With its origins dating back to the 13th century, The Hague also has much to offer history buffs, art enthusiasts and architecture aficionados with its assortment of museums, historical buildings and palaces. Moreover, expats with families will discover the city boasts outstanding schools and child-friendly attractions.

“The Hague offers a great climate to live and work, English is widely spoken and the Netherlands in general ranks high in terms of quality and standard of life indicators, a major plus for AOC’s international workforce based here,” concluded Aldabal.

Aberdeen, Scotland
Dubbed the “Energy Capital of Europe,” Aberdeen extends 45,962 acres and has a combined population of about 451,860 people. With a vibrant modern city life nestled in attractive scenery, Scotland’s capital has reinvented itself from a regional center dependent on commercial fishing and tourism to Europe’s energy capital.

Since the first discovery well in 1969 in the northern sector of the United Kingdom Continental Shelf (UKCS), the industry transplanted to Aberdeen and slowly transformed the small quaint town into a bustling city that has seen the development of around 38 billion barrels of oil equivalent.

When the first field came online, the Forties field, in the mid- 1970s, the UK Continental Shelf was only estimated to have a life span of a couple of decades, but now, with new technology and discoveries, new life was breathed into the mature basin, with recent statistics estimating that the area holds a further 15- 25 billion barrels of oil equivalent. And, with the local industry catching a second wind, Aberdeen is reveling in this industry.

“The emergence and consolidation of the energy sector has contributed significantly to the economic growth that has been a fixture of the Aberdeen City and Shire area,” reported the briefing paper “The Importance of the Energy Sector to Aberdeen City and Shire”. “This is evident in a number of ways: high levels of economic output per head; the location of many high-performing energy companies in the area; and the growing role of Aberdeen City and Shire as a business hub with global reach.”

With the largest heliport in the world and an important service ship harbor port servicing the offshore oil rigs, Aberdeen’s oil and gas industry employs roughly 137,275 people and has one of the lowest unemployment rates in Scotland, at only 1.7 percent.

Several prominent energy businesses have offices in Aberdeen, including BP plc, Shell, ConocoPhillips, Nexen Inc., Talisman Energy Inc., Dana Petroleum plc and Centrica plc. Several key energy assets also call Aberdeen home, including the St. Fergus Gas Terminal, which processes around 15 percent of the nation’s natural gas, and Peterhead Power Station, a multi-unit station that employs around 160 people.

Pau, France
Located near the Atlantic Ocean and the Pyrenees mountains, Pau, France traces its oil and natural gas industry roots to the 1950s with the discovery and development of the nearby Lacq gas field. With the formation of the integrated company Elf Aquitaine the following decade, Pau grew in prominence as a technical hub for the global oil and gas industry. Elf Aquitaine merged with the French supermajor Total S.A. in 2000, but Pau retains its reputation as a center of innovation for both operating and service companies.

Technical know-how from the Pau office of one such company, Halliburton, influences oil and gas operations offshore Europe and beyond.

“From Pau, Halliburton has supported many offshore and deepwater projects in various countries across all our business lines, providing technical support and expertise on a daily basis,” said Remy Caulier, a Pau-based vice president with Halliburton.

Employees of Halliburton, Total and other oil and gas industry players whose careers bring them to Pau will quickly discover a desirable place to work and live. Pau offers visitors and residents an abundance of green spaces, cultural pursuits, shopping venues and restaurants sure to satisfy the discriminating palate.

The city of more than 80,000 people offers easy access to outdoor activities in the mountains as well as the Atlantic coastline. Historic Pau also boasts noteworthy sites such as the birthplace of King Henry IV, who ruled France in the late 16th and early 17th centuries.

“It offers great opportunities for outdoor activities for residents and visitors and is well-known for great quality of life,” Caulier said. “Pau also has an international school – a definite plus for expatriate families.”

Caulier expects Pau to remain on the global oil and gas industry’s proverbial map as a technical hub.

“Pau will maintain an important role in the Europe and the global oil and gas business,” he concluded. “We have seen a recent increase in number of oil and gas service companies establishing a presence in Pau and expect this trend to continue.”

Stavanger, Norway
Situated on the Stavanger Peninsula in southwest Norway, Stavanger is the third largest urban zone and metropolitan area in Norway. Stavanger became world-known when oil was first discovered in the North Sea in 1969.

After much debate, the city became the onshore center for the oil and gas industry in the Norwegian sector of the North Sea. Today, Norway is Europe’s largest oil producer, the secondlargest net exporter of gas and the seventh-largest exporter of oil in the world with the remaining recoverable petroleum reserves on the Norwegian continental shelf estimated at 823 million standard cubic meters.

“Over more than 40 years, petroleum production on the shelf has added more than NOK 9,000 billion to the country’s GDP. In 2012, the petroleum sector represented more than 23 percent of the country’s total value creation,” reported Norwegian Petroleum Directorate (NPD).

The Norwegian energy industry employs around 140,000 people and offers high-paying jobs compared to other sectors while greatly increasing the average income of the population. Currently, there are 76 producing fields and in 2012, these fields produced about 1.9 million barrels of oil per day, and about 111 billion standard cubic meters of gas, giving a combined output of 225.14 million cubic meters of oil equivalents.

Since the first discovery well in the region, vast amounts of money have been invested in exploration, field development, transport infrastructure and onshore facilities, stated NPD. These investments in 2012 amounted to nearly 29 percent of the country’s total fixed capital investments.
Although Norway’s oil production peaked in 2001 at 3.4 million barrels per day and declined to 2 million barrels per day in 2011, natural gas production has been steadily increasing since 1993, reaching 3.6 trillion cubic feet in 2011, according to the U.S. Energy Information Administration.

Arkhangelsk, Russia
Arkhangelsk is located in northwestern Russia on the Dvina River, about 31 miles from the White Sea. Tsar Ivan the Terrible ordered the founding of the city Novo-Kholmogory in 1584 and it was renamed after the nearby Arkhangelsk Michael Monastery in 1613. Arkhangelsk became Russia’s principal port and traded extensively with European countries such as the United Kingdom, Holland and Germany, until the founding of Saint Petersburg in 1703.

It regained importance after the rail line to Moscow was completed in 1898 and served as a supply port during World Wars I and II. Arkhangelsk has a number of ancient monasteries, which, after restoration, attracted many pilgrims and tourists from around the world, including Russia.

The Arkhangelsk region is rich in natural resources, especially timber and minerals. Traditionally, its economic activity has centered on the timber, fishing and transportation industries. This began to change after untapped energy reserves in the area lured oil and gas energy firms to the region.

Russian and international oil companies – including OAO Lukoil, Rosshelf, ConocoPhillips and Statoil ASA – are active in developing the Timan-Pechora basin. Polar Lights Company (PLC), an equal joint venture of ConocoPhillips and Russian partner Rosneft, was one of the first Russian-American joint ventures to develop a new oil field in Russia. PLC – with its headquarters in Arkhangelsk – began production in the Ardalin field, where the Timan-Pechora basin in the Nenets Autonomous District is located, in 1994. Subsequently, three satellite fields have been developed starting in July 2002. PLC’s daily gross production capacity is now about 16,000 barrels of oil per day.

Another project in the region is the Kharyaga oil field. The onshore field is being developed in phases under a production sharing agreement, comprising JSC Zarubezhneft, Nenets Oil Company, Statoil and Total, with the latter as field operator. Kharyaga field began production in 1999 and the current Phase 3 development seeks to keep output at 30,000 barrels per day.

Arkhangelsk also functions as a base for Rosneft’s operations in northwest Russia, with the Arkhangelsk oil loading terminal and Belokamenka floating storage unit used to export a portion of the crude oil produced in the Timan-Pechora field. Crude oil is transported inland by pipelines and rail tank cars before being discharged at the loading terminal, where the oil is shipped by shuttle tankers to the Belokamenka floating storage unit in the ice-free Kola Bay. The oil is subsequently exported to Europe and the United States. Such an arrangement allows Rosneft to overcome shortages of available pipeline capacity in northwest Russia.

Arkhangelsk is expected to receive a boost to its economy due to the potential development of the huge Shtokman gas field in the Barents Sea in northwestern Russia as the project will require extensive investment in many areas.

Ravenna, Italy
Ravenna is located halfway between Florence and Venice, near the confluence of the Ronco and Montone rivers, 6 miles inland from Italy’s coast on the Adriatic Sea. The city was the capital of the Western Roman Empire, and the Ostrogothic and Byzantine Empires from the fifth to eighth century. Emperor Augustus made Ravenna the Roman Empire’s principal Adriatic seaport. Ravenna is renowned for its fifth and sixth century mosaics and its mausoleums, eight of which are listed as a UNESCO World Heritage Site. It was also a meeting point of East and West, of Byzantium and Rome, continental populations and Mediterranean traditions.

After World War II, the old Port of Ravenna was to emerge as an international port following the discovery of large gas fields offshore. Azienda Generale Italiana Petroli (AGIP), now part of Eni S.p.A., began offshore hydrocarbon exploration in Ravenna in the 1950s. The company’s first offshore platform – Ravenna Mare 1 – entered production in 1960. Other energy companies soon followed as Ravenna transformed from a city focused on agricultural, tourism and commercial activities. By the 1970s, AGIP was producing approximately 883 billion cubic feet of methane per year, or the equivalent of one third of Italy’s requirements. The Guendalina gas field – located 16 miles off the Adriatic and near Ravenna – began production in 2011.

Various multinational corporations opened offices in Ravenna around this time, while local companies diversified their activities to offer support services to AGIP and new companies were set up. Ravenna was to become Italy’s largest base for the offshore oil and gas industry.

Among the first companies to tap on these opportunities was Rana, a firm specializing in underwater work founded by two diving enthusiasts, Faustolo Rambelli and Franco Nanni. Another was Bambini s.r.l., whose founder Mario Bambini converted his fishing fleet into service boats, gaining an important position in this field, while Franco Fiore, the owner of a shipping agency Fiore Forwarding & Shipping Agents, began specializing as the representative of foreign oil and gas exploration companies.

They were followed by many new firms specializing in supplies and services for the oil and gas industry, like Italmet s.r.l., currently a leading supplier of offshore mooring technology, and Ferrari s.r.l, which produced components for industrial equipment and flange manufacturers.

– Rigzone

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