Greater Stavanger - Promoting the creation of value: Recovery and Diversification
Updated: Nov 14, 2018
Q: Can you briefly tell us about the history of Greater Stavanger Economic Development and its involvement with the oil and gas sector?
A: Greater Stavanger was established in 1999 as a project when the oil price dropped to US $10 per barrel. It was clear that Stavanger and a couple of other municipalities had to do something extraordinary in order to support business development in the region. Since then it has grown and now is a partnership of 16 municipalities, the county is a part of it as well. Our main objective is to create more jobs and encourage value creation in the region. We do not create jobs directly, we work with strategic partners and the main actors in this region such as the industry itself, academic, financial, and the public sectors. Since 1999, one of the main purposes of Greater Stavanger has been the support of the oil and gas cluster which is the strongest value creator in the region.
Q: What are the priorities in the present?
A: Our current priorities have been outlined in a new strategic assessment of the region due to the fall of oil prices. We have seen that this region has suffered greatly. The country has lost almost 50,000 thousand jobs, more than 12,000 of which were in our region. Stavanger went from being a region with the lowest unemployment rate to having the highest over a short period of time. Now, Greater Stavanger has a strategy for both support and development of the oil and gas cluster as well as expansion into new industry sectors and areas such as aquaculture and smart cities. We are also following and supporting the energy sector’s transition towards renewable energy. Our strategy has a strong foundation which allows us both to support the oil and gas cluster and diversify the economic foundation of the region. Over the years, our priorities have shifted towards diversification.
Q: You were talking about the focus on the growth of employment. How can Greater
Stavanger encourage the creation of jobs?
A: We are doing it by supporting initiatives that develop industry clusters. Another area that we work in is the advanced mechanics industry where we have established a vast network. The companies of this industry are now considering new markets and we are helping them go global. This is one example of us contributing as an active partner. We are also working on enhancing technology and innovation as well as transferring the knowledge between other industries such as the Pumps and Pipes initiative. We also have a massive cluster collaboration between Greater Stavanger, the Stavanger Region, Kristiansand, Bergen and Ålesund which has a maritime cluster. We have become partners with MIT and followed the program for accelerating innovation and entrepreneurship. A collective team from these four regions has been created and we are actively trying to figure out how to develop innovative solutions related to ocean industries. Greater Stavanger is partnering up and identifying areas for collaboration to be a part of the transition of the ocean industry technology development, thus boosting the creation of start-ups.
Q: When it comes to opportunities in the Stavanger region, what are the advantages of enhancing communication and networking among companies in the oil and gas sector?
A: The competence and the technology that we possess in the region today are our biggest assets. We support networking across different sectors to increase competence and the transfer of technology. For example, in the Pumps and Pipes project, we combine the health sector with the energy sector to implement the technology transfer both ways. We have done this in collaboration with Houston where the Pumps and Pipes project originated. Creating networks and increasing communication in the energy sector is another goal for Greater Stavanger. We represent municipalities and try to bridge the gap between industries and municipalities as far as infrastructure is concerned. When it comes to technology transfer we do see synergies and new opportunities between medicine, energy and space.
Q: What are the main opportunities that the Stavanger region offers to companies that
establish their operations in this oil and gas hub?
A: The main attribute of this region is infrastructure. First of all, the oil and gas cluster is in Stavanger and the complete value chain is represented in this region. We have exploration and development, production and supply bases. The region is compact and internationally oriented which makes it attractive for business. We have long traditions of doing business with other countries and I would say that we made a clear footprint internationally. The region has many start-ups and patent applications which means that the region is innovative, dynamic, and able to develop new things.
Q: What is the process that Greater Stavanger Economic Development uses to identify
opportunities in different markets such as oil and gas and renewable energy?
A: We do it by engaging in a dialogue with the industries. We go abroad by using our networks and consulting with experts. Stavanger is a part of the World Energy Cities Partnership called WECP. This allows us to learn from the best practices and find new possibilities and opportunities.
Q: The merger between the oil and gas sector and the renewable energy sector is a hot topic. What role does the organization aspire to play during the process?
A: In general, the society tends to move towards renewable energy sources. What we have in our country is quite unique. The Norwegian grid is mostly supplied by renewable energy because of hydro production. In many ways, we are quite different from many countries when it comes to the focus on renewables. I would not say that renewables are not on the agenda, but the approach here in Norway is slightly different. We have engaged in some initiatives related to renewable wind projects which are relevant to this region and we also collaborate with existing industry partners.
Norway is very rich in hydroelectricity and supplies over 6 billion kWh per year. Hydroelectricity plays a dominant role, but oil and gas has been at the top for almost 50 years. Stavanger is very international given the fact that 192 different nations are represented here. More than 20% of people living in Stavanger were born outside of Norway or at least their parents were. The Stavanger model is to facilitate effective communication between the public and private sectors. We have put a lot of effort into international networking and have been promoting and supporting initiatives to build new energy sources such as wind power. Wind power now plays an important role.
We are not directly involved in business, but we do a lot to bring people together. After the crisis in 1999, we were making sure that the Norwegian Continental Shelf is still attractive to international oil companies. Greater Stavanger tries to facilitate bringing innovative ideas forward. During the current industry crisis, we have been very focused on standardization, collaboration, and the transfer of technology.
Q: What are the organization’s expectations and ambitions for the coming years?
A: There is no quick fix related to the changes that we see in the oil and gas sector. Oil and gas will still be the main industry for a long period of time. The demand for energy is increasing and Greater Stavanger will be part of the developing energy mix. In the future, there will be a disparity between the ability to deliver energy from the existing energy mix and the demand for energy. In the long term, we should look into technology development to increase energy efficiency rather than only focus on new energy sources. For our region, there are possibilities on both ends. Stavanger will be a strong energy provider within oil and
gas and renewable energy sectors.
Oil and gas are strategic commodities. Prices fluctuate which is usual, but this time the crisis may be more structural; naturally, there will be more changes and I believe that we will be a part of this transition. We are very thrilled by the idea of the perfect power mix that consists of hydroelectricity, wind power, solar power, and gas. It is clear that when there is no wind or sun, some other source of energy to balance the energy mix is needed. We strongly believe that as a result of the Paris Agreement, the global energy mix can be different. The importance of Norwegian gas will increase in the coming years. Oil and gas will remain a big business in Norway. There is nothing wrong with the oil and gas economy, but when hit by change or the crises that we have seen in the market recently, it is extremely important to use the available knowledge and diversify using alternative resources. It has been a tough period of high rates of unemployment, but gradually we are seeing positive results. The market has improved and even though there is no future without oil and gas, it will be very different from what we have observed over the last 50 years.