Losing control? Norway’s oil workers face jobs threat as rigs go remote

Unmanned installations allow oil companies to save costs on helicopter transport and extra payments, but unions say remote control increases safety risks. (Reuters)
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Updated 21 October 2020
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Losing control? Norway’s oil workers face jobs threat as rigs go remote

  • Lower crude prices, pandemic accelerate push for unmanned offshore platforms

OSLO: A shift to operating oil rigs remotely from land, which has been accelerated by lower crude prices, has rekindled concerns among Norwegian unions over the impact on the safety of offshore workers and the loss of well-paid jobs.

These fears were highlighted by Lederne, one of three unions representing offshore workers, which this month shut six fields in a strike that threatened a quarter of Norway’s oil and gas output, rattling global oil markets.

“The strike was not against moving controls onshore. But we needed to get the deal for our members to also be a part of the discussions about moving controls onshore and their safety,” Lederne leader Audun Ingvartsen said.

Lederne, whose strike ended on Oct. 9, is the only Norwegian oil and gas workers union which did not have an agreement for its members at onshore control rooms. Oil companies started experimenting with remote controls about seven years ago, first with smaller, unmanned installations off the coast of Norway.

Europe’s largest oil and gas producer has since become a testing ground for industry attempts to turn this technology to larger, manned platforms.

Lower oil prices and the coronavirus crisis are accelerating this shift, prompting concerns about the safety of staff still working offshore on rigs.

“Our members still wonder whether this (onshore controls) is good enough, whether it is safe enough,” Ingvartsen said.

Both Ingvartsen and Hilde-Marit Rysst, head of another union, Safe, said their member concerns relate to situational awareness of those working offshore and on land.

“When you sit on the bomb, you will react differently than when you are far away from it,” Rysst said.

About 160 km from land, Equinor’s Valemon oil and gas field became the first in Norway to be operated entirely onshore in 2017. It has living quarters and a control room, but most of the time has no crew.

Production is managed in a control room in Bergen, but its operators have to spend two weeks offshore every year to make sure they are familiar with the rig.

Jarle Eide, a representative of the Industri Energi union at Equinor, said workers were more confident than before in the use of remote controls.

“People were initially skeptical, but gradually you get used to it. I don’t think anybody feels uneasy about it today,” Eide said, speaking by phone from the Valemon platform where he is part of a 19-member crew deployed there for a two-week shift.




A technician at Equinor’s Johan Sverdrup field uses a tablet to inspect platform equipment. (Reuters)

“Of course, there is always a risk and things can go wrong, so you have to be focused on safety even during your spare time,” he added.

Aker BP took a step further last year when its Ivar Aasen field became the first manned offshore platform to be managed remotely. There are, on average, about 50 people working on the rig, which is operated on land by about 14 people.

While Ingard Haugeberg, the Industri Energi union’s representative at Aker BP, said there were no indications that workers at Ivar Aasen felt unsafe, there were concerns about fully-automated platforms in the future.

“When the technology takes over 100 percent control, we have to rethink the way forward,” he said. “There will be fewer offshore jobs available in the future, and we, as union, don’t like it.”

Aker BP and Equinor both said they have been seeking to address concerns by moving controls onshore gradually and by ensuring that workers on the platforms can take over control if needed, with emergency response available nearby. “The combination of human competence and technology provide the best solutions also as we see it with regards to maintaining safety and reducing risks,” a spokesman for Equinor, Norway’s largest oil and gas firm, said.

Meanwhile, Norway’s Petroleum Safety Authority (PSA), which has to approve new ways of controlling offshore operations, said there had been no incidents related to remote controls.

“So far, we have found no reason to raise any objections to remote control technology,” PSA spokeswoman Inger Anda said, adding that ultimate responsibility rested with the companies.

Moving workers from offshore installations allows oil companies to save on helicopter transport and the extra payments workers receive for being offshore, which could account to nearly 50 percent of a total salary, Rysst said.

Other technical innovations, such as pooling data from various sensors on an offshore platform and using machine learning to alert maintenance requirements, also help to reduce costs.

Equinor said digital solutions helped to boost earnings at its flagship Johan Sverdrup oilfield by 2 billion Norwegian crowns ($213 million) since it started production a year ago.

Sverdrup does not have an onshore control room, but Equinor has created a “digital twin” which allows engineers onshore to explore for potential improvements, while offshore workers navigate around its platforms using tablets.

Aker BP, which says on its website it sees “considerable potential for increased revenues after start-up of the onshore control room,” told Reuters it planned to remotely control more offshore platforms in the future, including at the NOAKA development, in the Norwegian North Sea.

And Equinor, which will have an onshore control room for its Martin Linge field expected to start in 2021, has said it would consider using remote control options for small and medium-sized platforms, but that the largest platforms will still be staffed.

“This is the future and we can not stop it, but we need to ensure that offshore workers have at least minimum controls and they feel safe,” Lederne’s Ingvartsen said.


Saudi Arabia’s proptech investments surge 35% to $9m: MAGNiTT report

Updated 35 min 58 sec ago
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Saudi Arabia’s proptech investments surge 35% to $9m: MAGNiTT report

CAIRO: Property technology venture capital investments in Saudi Arabia saw an annual increase of 35 percent in 2023 to reach $9 million, according to MAGNiTT’s latest report.  

The venture data platform emphasized that the Kingdom outpaced Africa, the Middle East, Pakistan, Turkiye, and Southeast Asia regions with six proptech deals last year. 

In funding amount, Saudi Arabia ranked fifth across all markets, with Indonesia leading with $54 million, followed by the UAE with $35 million, and South Africa and Singapore with $13 million and $11 million, respectively. 

In terms of deal count, the UAE followed the Kingdom with five deals, while Indonesia, South Africa, and Turkiye each had three. 

Total funding across all markets in 2023 amounted to $157 million, marking an 81 percent decrease compared to the previous year. 

Deal count also experienced a significant annual decline, reaching 34 transactions, reflecting a 40 percent fall compared to 2022. 

MAGNiTT’s Emerging Venture Markets Real Estate report focused on analyzing the property marketplace, co-working, tenancy management, and facility management subsectors. 

The property marketplace was the leading sub-industry, attracting $120 million in funding, though this represented an 83 percent decline compared to the previous year. 

Africa was the best-performing region, with a 10 percent annual increase in funding, reaching $22 million. 

Property management was the most funded subsector on the continent, receiving $18 million in 2023, reflecting a 6 percent annual growth. 

In terms of deal count, Africa experienced a 53 percent drop, totaling seven transactions for the year. 

In the MEPT region, $59 million in funding was deployed in 2023, marking a 78 percent year-on-year decrease.  

This was spread across 19 deals, with the property marketplace being the most funded subsector at $38 million and the most transacted with 11 investments. 

Notably, seven out of the 10 most active investors by capital deployed in the region are headquartered in the US. 

Founded in 2014, MAGNiTT is the largest venture capital data platform in the Middle East, Africa, Pakistan, Turkiye, and Southeast Asia, with a database of over 32,000 startups and 11,000 investment firms. 


Italy’s Fincantieri launches Saudi shipbuilding unit to strengthen collaboration 

Updated 23 May 2024
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Italy’s Fincantieri launches Saudi shipbuilding unit to strengthen collaboration 

RIYADH: Italian shipbuilder Fincantieri plans to enhance collaboration with Saudi Arabia through a newly established unit, the company said. 

Fincantieri Arabia will bolster the Kingdom’s Vision 2030 development agenda in the cruise, defense, and offshore sectors, the group disclosed in a press release, issued on the sidelines of an industrial conference in Riyadh. 

Fincantieri is the only shipbuilding group active in all high-tech marine industry sectors, the release added. 

The new unit aims to highlight the group’s wide-ranging capabilities in shipbuilding, maritime equipment and systems, and naval logistic support services, including training and simulation.  

It will also manage stakeholder relationships in the Kingdom and seek out local partners.  

Moreover, Fincantieri said it plans to share its technological expertise in shipbuilding across cruise, defense, and offshore sectors, thus opening up opportunities for Saudi nationals. 

The firm’s CEO Pierroberto Folgiero: “Our commitment to the Kingdom of Saudi Arabia is steadfast. Fincantieri stands out in the shipbuilding industry for its vertically integrated model and our leadership across naval, cruise, and oil and gas sectors. We are proud to offer these world-class capabilities built on decades of naval heritage and excellence to help the Kingdom achieve its Vision 2030 objectives.”  

He added: “Given the maritime industry’s pivotal role under Vision 2030, we eagerly anticipate establishing strategic partnerships. Through these collaborations, we aim to enhance local technological capabilities, create opportunities for Saudi talent, and foster knowledge exchange.” 

The state-controlled Fincantieri has expanded its presence in the Middle East in recent years. In March 2023, Folgiero stated that the group would venture into the Saudi market and was strategically positioned for growth in the region. 

The Italian group is also aiming to enhance its focus on defense, a sector that presently contributes to around a quarter of its revenues. 

On May 20, Fincantieri concluded a shipbuilding joint venture, named Maestral, with Abu Dhabi-based EDGE Group. The two entities announced the signing of a €400 million ($433 million) contract with the UAE’s Coast Guard Forces for the supply of 10 advanced 51-meter offshore patrol vessels. 


Lebanon’s reforms insufficient for recovery, IMF says 

Updated 23 May 2024
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Lebanon’s reforms insufficient for recovery, IMF says 

Lebanon’s economic reforms are insufficient to help lift the country out of its economic crisis, the International Monetary Fund said on Thursday. 

Ernesto Ramirez Rigo, the head of the IMF mission visiting Lebanon, said in a statement that Lebanon’s ongoing refugee crisis, fighting with Israel at its Southern border and the spillover from the war in Gaza are exacerbating an already dire economic situation. 

Israeli forces and Lebanon’s Hezbollah have traded fire across Lebanon’s southern border since the war in Gaza broke out in October last year. 

Israel launched its assault on Gaza following a Hamas-led attack on southern Israeli communities on Oct. 7 in which fighters killed 1,200 people and captured more than 250 hostages. 

Since then, Israel’s assault has killed more than 35,000 people, with thousands more feared buried under the rubble, according to Gaza health authorities. 

The conflict “has internally displaced a significant number of people and caused damage to infrastructure, agriculture, and trade in southern Lebanon. Together with a decline in tourism, the high risks associated with the conflict create significant uncertainty to the economic outlook,” Rigo said. 

Fiscal and monetary reforms carried out by Lebanon’s finance ministry and the central bank, including steps to unify multiple exchange rates for the Lebanese pound and contain a currency slump, have helped reduce inflationary pressure, according to Rigo. 

However, he said more needs to be done if Lebanon is to alleviate its financial crisis. 

“These policy measures fall short of what is needed to enable a recovery from the crisis. Bank deposits remain frozen, and the banking sector is unable to provide credit to the economy, as the government and parliament have been unable to find a solution to the banking crisis,” he added. 

“Addressing the banks’ losses while protecting depositors to the maximum extent possible and limiting recourse to scarce public resources in a credible and financially viable manner is indispensable to lay the foundation for economic recovery.” 

Since Lebanon’s economy began to unravel in 2019, its currency has lost around 95 percent of its value, banks have locked most depositors out of their savings and more than 80 percent of the population has sunk below the poverty line. 

The crisis erupted after decades of profligate spending and corruption among the ruling elite, some of whom led banks that lent heavily to the state. 

The government estimates losses in the financial system total more than $70 billion, the majority of which were accrued at the central bank. 


 


Oil Updates – prices fall for fourth straight day as US rate hike prospects emerge

Updated 23 May 2024
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Oil Updates – prices fall for fourth straight day as US rate hike prospects emerge

LONDON: Oil prices eased for a fourth straight session on Thursday after the minutes of a US Federal Reserve meeting revealed discussions of a further tightening of interest rates if inflation remained sticky, a move that could hurt oil demand, according to Reuters.

Brent crude futures fell 20 cents, or 0.2 percent, to $81.70 a barrel at 9:51 a.m. Saudi time. US West Texas Intermediate crude futures were down 29 cents, or 0.4 percent, at $77.28. Both benchmarks fell more than 1 percent on Wednesday.

Minutes released on Wednesday from the Federal Reserve’s last policy meeting showed the US central bank’s response to sticky inflation would “involve maintaining” its policy rate for now but also reflected discussion of possible further hikes.

“Various participants mentioned a willingness to tighten policy further should risks to inflation materialize in a way that such an action became appropriate,” minutes of the Fed’s meeting said.

Higher interest rates boost borrowing costs, crunching funds that could boost economic growth and oil demand in the world’s largest oil consuming nation.

Also weighing on the market, US crude stocks rose by 1.8 million barrels last week, according to the Energy Information Administration, compared with an estimate for a 2.5 million-barrel draw.

Globally, physical crude markets have more recently been pressured by soft refinery demand and ample supply.

“Recent market softness has come on the back of weaker data, including rising oil inventories, tepid demand, and refinery margin weakness and the increasing risk of run cuts,” Citi analysts said in a note on Thursday.

Russia said it exceeded its OPEC+ production quota in April for “technical reasons” and will soon present to the Organization of the Petroleum Exporting Countries Secretariat its plan to compensate for the error, the Russian Energy Ministry said late on Wednesday.

Citi said it still expects that OPEC+, which groups together OPEC and allies led by Russia, will hold its production cuts through the third quarter of this year when it meets on June 1.

Citi also said it continues to see Brent averaging $86 a barrel in the second quarter of 2024. 


Saudi EXIM Bank signs 2 agreements with Japan’s SMBC and MUFG banks

Updated 23 May 2024
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Saudi EXIM Bank signs 2 agreements with Japan’s SMBC and MUFG banks

TOKYO: On the sidelines of the Saudi-Japan Vision 2030 Business Forum in Tokyo, Saudi EXIM Bank signed two cooperation agreements with SMBC Business Banking and MUFG Bank.

The agreements aimed to foster cooperation and create co-financing opportunities to promote non-oil exports in target markets, according to the Saudi EXIM Bank.

The two agreements were signed separately by Saad bin Abdulaziz Al-Khalab, CEO of Saudi EXIM Bank, along with Akihiro Fukudom, CEO of SMBC Bank and Hironori Kamezawa, CEO of MUFG Bank, a statement confirmed.

Commenting on the partnerships, Al-Khalab stated: “This collaboration with Japanese entities is part of our joint efforts to strengthen economic relations between both countries and achieve the Saudi-Japan Vision 2030. The acceleration of commercial projects between our nations toward broader horizons comes as a result of the strength, advanced economic status, and promising investment opportunities.”

During the roundtable meeting, which brought together several ministers from both sides, Al-Khalab reviewed Saudi EXIM Bank’s activities with Japanese financial institutions and commercial companies to enhance economic and trade relations and identify projects of mutual interest.

During the financial sector’s roundtable meeting, Al-Khalab emphasized the critical importance of collaborative efforts between all financial institutions and business sectors. This is to ensure the provision of comprehensive, incentivizing credit solutions that can accelerate the pace of trade and mutual and global investment activities.

The Saudi EXIM Bank aims to empower the Kingdom’s non-oil national economy in accordance with Vision 2030. The bank is focused on enabling Saudi non-oil exports to expand and penetrate global markets by bridging financing gaps and reducing export risks.