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History of the Offshore Industry in Scandinavia

The Scandinavian and Arctic Circle regions have long been renowned for their impact on the offshore industry. In fact, it is hard to think of offshore without the vast contributions made by the countries that encompass this region. With this in mind, we are going to look at five of the major players in these waters; Norway, Denmark, Sweden, Iceland, and the Faroe Islands.

 

Offshore Industry in Norway

History of the Industry –
Offshore in Norway has been prevalent since the 1960s, where large quantities of oil were discovered in the North Sea.
Since then, the oil and gas industries have been a core component in Norway’s economy and still shapes a lot of Norwegian lives to date.

At one point, Norway’s annual production of oil and gas was 6x their national consumption, making it an incredibly profitable business for a lot of Norwegian companies.

Cultural Integration into Business –
Norway has traditionally used its offshore pursuits to further its development goals in a number of different areas. It is hard to find an area of life in Norway that has not been impacted by the offshore industry in one way or another.

The offshore industry has become ingrained in the culture of Norway and you would struggle to find a Norwegian who does not have some kind of link to the industry.

Contribution to the Industry –
Norway is the largest oil-producing country in Europe and with all of the reserves located on the Norwegian Continental Shelf (NCS), it is not hard to see why.

The Scandinavian contribution to the industry is massive, cemented by the vast size of some of the oil fields within Norwegian-controlled waters.

Current Engagement –
Norway is amongst the world’s largest exporters of oil and with the huge amount of hydroelectric energy produced by Norway, the country is one of the leaders in the offshore industry.

The offshore industry in Norway covers the whole supply chain, from drilling to offshore supply and service vessels.

 

Offshore Industry in Denmark

History of the Industry –
Despite being a fairly small country, Denmark has had a strong nautical culture embedded in it. As it is surrounded by water and with over 7,000KM of coastline, there is a strong maritime and offshore culture in this small country.

Denmark’s naval aptitude had led to advances in the offshore and marine industries and development into the North Sea’s rich waters.

Cultural Integration into Business –
The growing offshore and energy industries in Denmark are a testament to the knowledge, innovation, and determination of the Danes.

The oil and gas industry in Denmark still significantly contributes to their state revenue, and similar to Norway finds its way into all facets of Danish life.

Contribution to the Industry –
Despite being a smaller country within the offshore industry, Denmark has been respected in the market for a long time, and only continues to adapt and grow.
Denmark was the second-largest producer behind the UK in the EU, but with the UK leaving, they are most likely to take the top spot.

Current Engagement –
Denmark has 9.5 times its annual consumption in proven reserves. As an estimate that gives the country under 10 years of oil left at their current consumption level.

As is the case with the other Scandinavian countries, Denmark is investing heavily in more renewable energy sources. With a huge push on wind energy expected in the near future.

 

Offshore Industry in Sweden

History of the Industry –
Sweden’s offshore industry has never been comparable to their Scanadanvian counterparts due to the lack of natural resources, with only one real proven oil region in the Ordovician Reefs on Gotland.

This natural dependence on alternative types of energy pushed their move towards renewable and more sustainable sources of energy.

Cultural Integration into Business –
The offshore industry is not quite as embedded in Sweden as the other Scandinavian countries due to the lack of oil resources.

With this in mind, there are still elements of it in culture. In fact, the minimal amount of fossil fuel offshore resources led to many renewable innovations and sustainable energy research.

Contribution to the Industry –
In terms of the traditional oil and gas parts of the offshore industry, Sweden has had little part in it. Focusing more on sustainable energy is a contribution that will pay dividends in the future.

As oil reserves dry up and countries look for alternative means, Sweden will be in pole position to lend aid, offer strong examples, and share expertise moving forward.

Current Engagement –
Sweden has a heavy investment in renewable energy production, focusing on hydro and nuclear power which amount to around three-quarters of their renewable energy.

There is a big trend with the Scandanvian countries to focus on renewable sources and move away from fossil fuels. Sweden is at the forefront of this movement.

 

Offshore Industry in Iceland

History of the Industry –
Due to Iceland’s lack of oil resources and heavy reliance on imports, they explored more viable and sustainable methods of energy.

Iceland pivoted away from oil in favor of geothermal and hydropower between the 1940s and early 1970s, which led to a much more self-reliant onshore industry.

Cultural Integration into Business –
The lack of wide-set offshore industry in Iceland has led to major cultural changes and developments. As alluded to before, they have a much more insular power generation, which offsets the need for importing offshore drilled oil.

This has set a standard for what the offshore industry is in Iceland, or in this instance, what it isn’t, as there is no real offshore presence like there is in similar geographic regions such as Scandanaiva

Contribution to the Industry –
Although Iceland has not directly contributed to the offshore industry like other countries. Their historical move away from fossil fuels and sustainable energy impacted the industry.

Despite multiple efforts to find oil to start up a large offshore industry in Iceland, there have been no tangible or worthwhile results. Therefore their contribution to the offshore industry has been very minimal and indirect.

Current Engagement –
Similar to Sweden, the need to innovate set in early for Iceland which made them seek out alternative methods to the offshore industry and use more sustainable energy.

Iceland is all but removed from the oil and gas industry as they are fairly self-sufficient due to their huge capabilities for onshore power development.

 

Offshore Industry in Faroe Islands

History of the Industry –
The Faroe Islands are technically owned by Denmark, despite their location between Norway and Iceland. These 18 volcanic islands are self-governed but politically count as Denmark.

In the early 1990s, the Danish government transferred the rights to resources in the Faroe Islands to the Faroese authorities which opened up the beginning of hydrocarbon exploration.

Cultural Integration into Business –
The Faroe island’s offshore industry and the economy are mostly centered around fishery products exports, so culturally they are focused on the sea and have a strong dependence on it.

As islands, the nautical culture bleeds into every element of life in the Faroes, but despite this, there is very little offshore industry in the Faroe Islands.

Contribution to the Industry –
The lack of natural offshore resources or the inability to access them made it difficult for the Faroe Islands to have much of an impact on the offshore industry.

The offshore industry in the Faroe islands has had a rocky history, with a lot of roadblocks in the way. From the bureaucracy around ownership to sub-basalt challenges, to potential for future drilling, there is a lot to overcome but a chance of viable contributions.

Current Engagement –
Despite Denmark’s push towards wind and more sustainable energy sources, the Faroese continue their search for oil and gas exploration.

The Faroe Islands have started to plan wind farms offshore, but are moving a lot slower than their Scandinavian neighbors.

The Offshore Industry in Scandinavia
As we can see each of the above areas have been involved in the shaping of the modern offshore industry, creating offshore jobs, and supporting the infrastructure.

With offshore being so important in everything from the environment, to job creation, to international trade, Scandinavia is a key cog in the global offshore industry.

The Scandinavian offshore industry’s impact is a tricky one to define as all of the regions we have looked at have had either indirect or direct changes due to the prevalence of offshore operations.

The future for these countries and regions will be defined by how they develop their industries. They need to adapt to the environment, limited resources, and future technology to maximize their potential offshore.

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