Author: Filip Fremo Minge

History

Like the other Valhall platforms, the drilling installation was built at a number of different yards. Aker Verdal was commissioned to fabricate the steel jacket, with the topsides originally due to come from Kværner Egersund.  When the latter secured the contract to build part of the Statfjord B topsides, however, Amoco became concerned that this could affect progress for the Valhall project and the job of completing the DP topsides was shifted to Verdal.  Egersund nevertheless prefabricated parts of the topsides and the bridge to the QP. The four-module topsides came from Stord Verft, while the three drilling modules were fabricated by Kristiansands Mek Verksted.

The platform was ready for drilling to start – with the North Sea’s first enclosed derrick – on 17 December 1981.

However, the initial wells did not proceed entirely as planned and it took almost 10 months to get the field on stream. The last well from the DP was drilled in 1996, in the same year that a new wellhead platform was installed. Removal of the derrick did not take place until June 2009.

Technical description

The eight-leg steel jacket stands 90 metres high and weighs 7 900 tonnes, including the piles holding it in place. Put together from modules, the topsides weigh 7 300 tonnes in all, measure roughly 54 by 30 metres and are 23.5 metres high.  In addition to the derrick come three drilling modules, and space is provided for 24 well slots.  Six additional slots were installed between the original set in 1989. A large cranes is installed roughly midway on each long side. The DP is linked both to the PCP and the QP by two bridges, each 45 metres long.

The most important equipment components on the DP include:

• Derrick
• Wellheads
• Storage tanks for drilling mud
• Pumps
• Mud treatment facilities
• Tanks for fluid to be pumped down under high pressure to fracture the reservoir rock
• Ventilation equipment
• Cranes

Process

In addition to drilling wells, the DP is the point where the wellstream – containing both gas and water as well as oil – reaches the surface. This is transferred to the PCP through pipes attached to the bridge linking the two structures.

Drilling Platform (DP)

• Drilling Modules & Substructure West Elevations
• General Arrangement Process Unit
• General Arrangement Process Unit 2
• HVAC Plantroom Layout (Diesel Layout)
• Layout for kjellerdekk (Cellar Deck) på DP
• Master Control Centre (LER) Mud Slurryfication Unit
• Master Equipment List DP
• Mud Module General Layout of Lower Deck
• Mud Module General Layout of Mezzanine Floor
• Mud Module General Layout of Roof
• Mud Modules Sections A-A, B-B & C-C
• Plot Plan East Elevation DP
• Plot Plan North Elevation DP
• Plot Plan West Elevation DP

Process and Compression Platform (PCP)

• Arrangement – Adkomst plattform i nordfasade mellomdekk PSV-ventil
• Flare Boom Access Platform Extension General Arrangement and Details
• Jacket on Skirt Pile Sleeve
• Jacket-elevations on Rows 1 & 4

Quarters Platform (QP)

• Layout for kjellerdekk (Cellar Deck) på QP
• Plot Plan Elevation A-A QP
• Plot Plan Elevation B-B QP

Riser Platform (RP)

• Jacket Static in Place Analysis Elevation on Line A
• North Elevation on Connection Bridge, Ekofisk Tank & RP
• Riser Platform East Elevation
• Riser Platform South Elevation
• Riser Platform West Elevation

The Norwegian Petroleum Museum utilises the Google Analytics tool, which installs cookies to collect and assess information about how visitors utilise its website.

These downloaded files can be used solely by www.kulturminne-valhall.no and the host computer’s owner. Google Analytics obtains only general web statistics – such as browser type, date and time, language, and the page the visitor came from.

Users can prevent cookies being stored on their computer by changing the preferences in their browser. These are usually found under such menu items as “preferences”, “internet options” or “internet alternatives”.

More information on cookies and how they are used can be found by clicking on help in the browser menu.

March 1976 – fire on Deepsea Saga

A fire broke out on 2 March during the final phase of test drilling on Deepsea Saga . The flames roared high into the air, and the whole rig shook. The drill bit had penetrated a pocket of gas under high pressure. With the string driven out of the well like crumpled spaghetti and the casing cut, the gas ignited to produce an explosive blaze. Forty of the 63-strong crew were evacuated by helicopter to Ekofisk, Sola airport outside Stavanger or standby vessel King Supplier.

The remainder remained on the rig to fight the fire and clean up. Fortunately, the flames were extinguished fairly quickly and nobody was injured. The fire went out once the gas pocket was exhausted. Representatives from the Norwegian police, the Norwegian Petroleum Directorate (NPD) and Amoco investigated the incident.[REMOVE]Fotnote: Rasen, Bjørn (2007): LF6A. Valhall at 25 … and it’s only the beginning , p 68; Norwegian Official Reports (NOU) 1977 no 47, Ukontrollert utblåsing på Bravo 22. april 1977 , p 21.

September 1984 – death on Valhall

A 39-year-old welder died from injuries sustained during maintenance work on Valhall for Bomek A/S. He was installing a cradle on the crown block while standing on scaffolding, and was pushing the cradle into the correct position on the platform deck when the plank he was standing on shifted in the opposite direction.

The victim himself had undone the security clamps and removed one of the boards to access a weld. No defects were discovered in the scaffolding. He fell 11.7 metres onto a deck grating. Both the police and the NPD investigated the incident.[REMOVE]Fotnote: Stavanger Aftenblad , 10 September 1984, “Drept på Valhall”. They found no deficiencies in the equipment or the procedure which raised issues of criminal liability, and neither agency took further action.[REMOVE]Fotnote: Police report, case 7869/84, Stavanger police department’s archive.

The insurance company refused to pay full compensation to the family because it maintained that the worker had behaved negligently.[REMOVE]Fotnote: Rasen, Bjørn (2007): LF6A. Valhall at 25 … and it’s only the beginning , p 151.

June 1985 – fire

Brann på PCP – en konsekvens av gamle installasjoner?, forsidebilde, arbeidsliv,

Nobody was hurt when a fire broke out in the inlet to a gas-driven compressor on Valhall’s process platform. The area was closed off and the flames extinguished within four-five minutes. Production resumed after a couple of hours.[REMOVE]Fotnote: Stavanger Aftenblad , 5 June 1985, “Brann på Valhall”.

January 1987 – methanol poisoning

The weather on Valhall was unusually cold in January 1987, when a combination of moist air and high wind corresponding to 30 degrees of frost had caused sharp cooling of decks, pipes and other gear. An unusual work accident occurred after methanol had been poured on ice covering the deck to help it thaw and aid its removal. This chemical is an effective anti-freeze because of its low freezing point, but is also a colourless and toxic liquid which can cause serious health complications and even death.

As the methanol vaporised, it was carried by the air conditioning system to an enclosed room where a man was working. The chemical paralysed his sense of smell, and he inhaled the vapour without realising this. The first symptoms of methanol poisoning soon appeared, with the worker forgetting what he was saying and hearing over the phone. He felt faint, and a colleague eventually discovered him sitting with his feet on the desk and humming.[REMOVE]Fotnote: Rasen, Bjørn (2007): LF6A. Valhall at 25 … and it’s only the beginning , p 150. After a swift transfer to the sick bay, he was dosed with ethanol – neat alcohol. Paradoxically, this acts as an antidote to methanol by slowing its absorption by the body. That in turn prevents the poison being broken down, so that it can be voided in urine and by breathing.

The nurse requisitioned more alcohol in the form of vodka from a standby ship, and spent the subsequent helicopter flight to hospital on land trying to keep the patient awake and drinking.

Tests showed that the methanol was out of his system, but that his alcohol content was so high that he had to remain under observation overnight. Fortunately, things went well and he could be discharged the following day.[REMOVE]Fotnote: Stavanger Aftenblad , 21 January 1987, “Metanolforgiftning på Valhall”.

November 1988 – gas blowout

The alarm sounded in the joint rescue coordination centre at Sola airport when a gas blowout occurred onDyvi Stena , which was engaged in exploration drilling for Amoco. Emergency preparedness was stepped up, but it was fortunately unnecessary to respond. Since the blowout was small, no evacuation of personnel from the rig was required either. Because no riser had been installed between drill floor and seabed, the gas escape failed to reach the surface. However, all drilling halted as soon as the blowout had been registered. Heavy drilling mud was pumped down the well to counterbalance the pressure and stop the gas flow.[REMOVE]Fotnote: NTB, 13 November 1988, “Gassutblåsning i Nordsjøen”. No pollution threat was posed.

A total of 272 incidents involving gas leaks of various sizes from fixed installations on the Norwegian continental shelf (NCS) were recorded in 1988-89. Only 69 were notified to the NPD, which had no explanation for the under-reporting.[REMOVE]Fotnote: Dagens Næringsliv , 30 October 1990, “Kun 69 av 272 gasslekkasjer rapportert”. These figures derive from an analysis conducted by the Petcon Consultancy on behalf of the Norwegian Oil Industry Association (OLF) and the Federation of Offshore Workers Trade Unions (OFS). Information was collected for each incident on its date, type of gas, the equipment or components involved, the kind of activity, the hazard class and the cause.

arbeidsliv, Alarmen går… et utdrag hendelser på Valhall

Drainage of gas from the incorrect place in the reservoir and at the wrong pace appeared to be the most frequent reasons for the discharges. Others included cracking, fractures, corrosion, failure of seals and inadequate liberation of gas. The leaks were ascribed by the oil companies in some reports to human error. That explanation was unclear, and both the OLF and the OFS found this classification to be incomprehensible.[REMOVE]Fotnote: NTB, 29 October 1990, “272 større og mindre gasslekkasjer på sokkelen på to år”.

1994 – radioactive sources

Control of a radioactive source with a radiation intensity of 15 billion becquerels was lost during downhole logging on Valhall. After four days of fishing for the stuck item, they had to give up and plug the well. This incident was not reported to the Norwegian Radiation Protection Authority, despite a licence requirement to do so immediately – and directly – in the event of any accident.

Although Baker Hughes Intec, which was doing the logging, informed operator Amoco, the radiation protection authority only received a notification from the NPD 12 days after the latter had been told. It was not the NPD’s job to pass the information on. In the wake of the incident, a new agreement was drawn up between the two state agencies to clarify the practical details of collaboration between them.[REMOVE]Fotnote: Aftenposten , 23 August 1994, “Radioaktiv avklaring fra Oljedirektoratet”.

This was the eighth accident involving radioactive substances on the NCS in 1993-94. They are used because these instruments are much more effective in identifying small amounts of oil.[REMOVE]Fotnote: Aftenposten , 18 August 1994, “Radioaktivt uhell ble ikke varslet”. The NPD conducted an audit on Valhall in 2000 to check not only BP Amoco but also subcontractors Mærsk, Baker Hughes and Schlumberger. Doubts were expressed by the regulator about BP Amoco’s competence in monitoring subcontractors using radioactive materials. It criticised the operator and Mærsk for failing to play an active part in limiting the use of such substances.

An audit on the Mærsk Guardian rig revealed that radioactive sources were stored close to explosives – a condition which led the NPD to issue a notification of order. The involvement of the management committee and the safety delegate service in the use and handling of radioactive substances was also described as deficient. BP Amoco rejected the accusation of insufficient competence.[REMOVE]Fotnote: Stavanger Aftenblad , 15 January 2000, “Radioaktiv OD-kritikk”.

Control of a radioactive substance was again lost on Valhall in 2012, when the drillstring carrying the source became stuck. Efforts to free the string were unsuccessful. Its lowest section was accordingly unscrewed in order to avoid more of the string getting stuck. The radioactive sources were left behind in the well with other equipment. The Petroleum Safety Authority Norway (PSA) characterised this incident as less serious, but nevertheless found that it represented a case of acute pollution.[REMOVE]Fotnote: Offshore.no, 10 August 2012, “Borestreng satt seg fast”.

July 1997 – discharge of hydrogen sulphide

The smell of rotten eggs spread on Mærsk Guardian after the injection of an algae-based starch caused the formation of highly toxic hydrogen sulphide (H₂S) gas. Standard gas detection equipment had been installed on the jack-up rig, which was drilling on Valhall for Amoco, and this functioned as intended. The discharge site was fortunately unoccupied, so nobody was injured by breathing in the gas.[REMOVE]Fotnote: NTB, 11 July 1997, “Gassalarm på Valhall-feltet”.

December 1997 – gas intrusion

arbeidsliv, Alarmen går… et utdrag hendelser på Valhall

A serious gas intrusion occurred while Transocean Nordic was drilling on Valhall, requiring 30 of the 65 oil workers to be evacuated. Downhole pressure increased sharply in the middle of the night as a result of the unexpected inflow, and the threat of a gas blowout is high under such conditions.

An alert was sent at once to the joint rescue coordination centre at Stavanger’s Sola airport, which dispatched a Sea King helicopter to the rig. The NPD and the police were also notified, and Amoco immediately initiated its response plan for oil emergencies. The 35 remaining crew succeeded in stabilising the pressure from the gas intrusion and preventing an uncontrolled blowout by increasing the weight of the drilling mud in the well. Everything was back under control within a couple of hours, and the 30 evacuated workers could be flown back to the rig after a day had passed.[REMOVE]Fotnote: Dagbladet , 14 December 1997, “Tilbake etter gassdrama”.

January 1998 – injury on rig

A 20-year-old man from Jørpeland near Stavanger was injured while working on the Mærsk Guardian rig when production wells were being drilled on Valhall. After he had been crushed against a railing by a heavy length of riser pipe, a helicopter was called in from Ekofisk to take him to Rogaland Central Hospital. Doctors subjected him to an internal examination, while both the police and the NPD conducted their own investigations in line with routines for such incidents.[REMOVE]Fotnote: Stavanger Aftenblad , 15 January 1998, “20-åring alvorlig skadet etter ulykke på Valhall”.

The police inquiry revealed that the crane driver involved in lifting the riser pipe lacked the required certificate. Mærsk Contractors personnel both on land and offshore were aware of this, but failed to intervene. In addition, the crane’s operating levers had been extended in a way which contravened the regulations. The accident was caused when the driver unintentionally brushed against one of the levers. Mærsk Contractors was fined NOK 400 000 as a result of the work accident.[REMOVE]Fotnote: Stavanger Aftenblad , 23 August 2000, “Mærsk bøtlagt etter kranulykke”.

November 1999 – audit

BP Amoco was sharply criticised by the NPD in an audit report because the recently merged company was allegedly unable to document that its working environment and level of safety were unacceptable. This followed an investigation by the regulator into these aspects of a reorganisation process launched partly because of the merger and partly in order to cut costs.

“BP Amoco has failed to analyse the consequences of organisational changes made and planned offshore in the support functions on land ahead of their introduction,” the NPD found. “The company was thereby unable to document that it could maintain an acceptable level of safety on the installation.”

The company was ordered to produce “an overall review and analysis of the consequences of staffing and organisational changes made and planned in connection with the merger and parallel change processes”. At the same time, the NPD demanded that BP Amoco’s employees be involved in the analysis work. For its part, the company maintained that the restructuring processes had been “satisfactorily planned and executed”. The NPD’s investigations were not confined to BP Amoco. Several oil companies merged in this period, and audits were conducted with the Norsk Hydro-Saga Petroleum and Phillips-Conoco unifications.[REMOVE]Fotnote: Dagens Næringsliv , 27 November 1999, “Svært kritisk til BP Amoco”.

August 2000 – rust and blocked nozzles

Lack of maintenance for fire safety equipment halted production on Valhall, with rusting and blocked nozzles among the irregularities identified by a routine inspection. An abrupt shutdown is rare in the oil industry, but the safety of people working in the sector took priority. Nevertheless, none of the personnel on the field were sent ashore. Production remained at a standstill for several days, and BP Amoco had to invest in new fire safety equipment.

Local government minister Sylvia Brustad had this comment: “I feel it’s a source of concern that matters are allowed to reach such a stage that the whole platform must be shut down.

“Prevention must be pursued in this area at all times, so that we can rely on safety being 100 per cent – particularly with regard to employees in the oil sector.”[REMOVE]Fotnote: NTB, 27 August 2000, “BP stoppet oljeproduksjonen på Valhall”.

Union officials on the field were also very critical. Ingard Haugeberg, chair of the ABC house union, commented: “Failures in the fire extinguishing system are among the worst that can happen. It worries me that we don’t know how long the equipment has been non-functional.”[REMOVE]Fotnote: Stavanger Aftenblad , 29 August 2000, “Sterk kritikk av Valhall-sikkerhet”.

The Norwegian Oil and Petrochemical Workers Union (Nopef), which included the ABC, blamed safety conditions in the North Sea on the Norsok process implemented in the mid-1990s.

In the union’s view, a clear relationship existed between this Norwegian government initiative to make savings and a negative trend in offshore safety. It also believed that the oil companies had to up their game.

“It’s a disturbing signal when the NPD halts production on Valhall,” said Haugeberg. “The worst aspect is that this incident forms part of a long series of revelations which show that offshore safety is not as good as it once was.”[REMOVE]Fotnote: Stavanger Aftenbladet , 29 August 2000, “Nopef: Svekket sikkerhet er myndighetenes Ansgar”.

In connection with the discovery of blocked fire water pipes on Valhall, the OFS union raised another aspect of offshore safety – the safety bonuses given if no accidents occurred on a platform. Additional payments to management and rank-and-file on offshore installations which had achieved good safety statistics and cost cuts were increasingly common. According to Stavanger Aftenblad , a number of people on Valhall feared that such bonuses could undermine safety and lead to an overly positive picture of reality – with accidents going unreported to avoiding losing attractive rewards.

The OFS feared that platform managements were applying pressure to keep down costs in order to secure their bonuses, and that spending cuts would mean lower priority for important maintenance. BP had introduced performance contracts for both management and groups of rank-and-file workers with the aim of motivating them to avoid accidents and to pay attention to safety.[REMOVE]Fotnote: Stavanger Aftenblad , 31 August 2000, “Sikkerhetsbonus svekker sikkerheten”.

August 2003 – injury on IP

A 36-year-old scaffolding foreman fell 13.5 metres and suffered severe injuries while working on a skid beam over the drill floor on the Valhall IP injection platform. He was working with a scaffolder to disassemble equipment on scaffolding when the accident happened, and first hit a beam and then the platform deck. Both men were attached with lines and hooks because part of the work area had no grating. The foreman probably disconnected his hook in order to reach a new position.

When the equipment he was holding slipped out of his grasp, he lost his balance, fell backwards and landed on a temporary deck 13.5 metres below. The victim worked for maintenance specialist Rheinhold & Mahla Industrier. Both the PSA and the police investigated the accident.[REMOVE]Fotnote: NTB, 30 August 2003, “Alvorlig skadd etter fall på Valhall-feltet”. Although serious, the foreman’s injuries were not life-threatening. The PSA nevertheless took the view that the accident had the potential to be fatal in only marginally different circumstances.

Its investigation identified management weaknesses, including inadequate planning and communication. General work permits were used for building and demolishing scaffolding, and were rolled over without a specific assessment of risk in each case.[REMOVE]Fotnote: PSA, 7 January 2004, Gransking av fallulykke på Valhall.

December 2003 – well kicks

Control was lost over well A08B on the Valhall drilling platform (DP) on 10 December. The crew managed to re-establish control fairly quickly following this well kick, but a new and more serious incident occurred seven days later. After a period of worsening conditions and pressure build-up in the well, control was regained towards the end of December. The PSA criticised BP for doing a poor job when things went wrong.[REMOVE]Fotnote: PSA, investigation report, summary, Granskning av brønnspark i brønn 2/8-A08B Valhall DP i desember 2003. The incident was characterised as high-risk, and could have caused a blowout. According to the PSA, staffing on Valhall was too small after the kick.

Other shortcomings included unclear communication and division of responsibilities between land and offshore, along with a lack of understanding of the risk.[REMOVE]Fotnote: Stavanger Aftenblad , 23 September 2004, “Nær utblåsning på Valhall”.

January 2004 – gas leak

A gas leak occurred on Valhall after valves had undergone a maintenance check.[REMOVE]Fotnote: Stavanger Aftenblad , 13 January 2004, “Millionbot for dødsulykke”. Gas leaked from a lubrication nipple, and triggered the alarm and deluge systems. Production shut down immediately, and 154 workers crossed the bridge to the quarters platform until the position could be clarified. After just under 30 minutes, the leak had been located and stopped, and work began five hours later to bring the facility back on stream.

BP’s own investigation team was joined by representatives from the PSA and the police, who flew out to Valhall to determine what had occurred.[REMOVE]Fotnote: Stavanger Aftenblad , 13 January 2004, “154 ble evakuert på Valhall-feltet: Produksjonen er i gang igjen”. According to the PSA, the nipple should have been replaced during a maintenance campaign two years earlier but was not defined as sufficiently critical. Moreover, it found that the relevant job had not been adequately planned on the basis of the error scenarios which might have arisen.[REMOVE]Fotnote: Offshore.no , 18 February 2004, “Gransking av gasslekkasje på Valhall”.

April 2004 – injury on rig

arbeidsliv, Alarmen går… et utdrag hendelser på Valhall

A 33-year-old employee of Schlumberger Well Service was badly injured on the West Epsilon rig during drilling on Valhall, when a steel plate weighing 357 kilograms fell 15 metres and struck him on the thigh. He also suffered facial injuries.The accident happened during a lifting operation with a telescopic crane. This struck a hatch cover and caused it to fall from the rig’s cellar deck onto Valhall’s north flank platform, where two people were standing. Investigators from the police, the PSA and BP flew out.[REMOVE]Fotnote: Stavanger Aftenblad , 3 April 2004, “Alvorlig for 33-åringen etter Valhall-ulykke”. Conditions identified by the PSA prompted it to order BP to stop using the crane type responsible for the accident at once.

The safety regulator seldom issues an immediate prohibition of this kind, but it found the position to be so serious that instant action was required. According to the PSA, problems on the platform embraced procedures, documentation and understanding of the risk. The victim was only centimetres from death.

The order required BP to check and update the crane, requirements for expertise were imposed, and checks had to be carried out on similar equipment on other BP platforms. The company had to confirm compliance with these terms before the cranes could be taken back into use.[REMOVE]Fotnote: Stavanger Aftenblad , 20 April 2004, “BP får pålegg etter Valhall-ulykke”. It transpired that parts of the crane’s safety system, including the anti-collision system, were not working. Nor were the window wipers in the crane cabin, so that visibility was poor in the dawn light when the accident happened. Moreover, the hatch cover which fell down had not been secured with additional chains.

BP was sharply criticised by the PSA after the accident. Although several factors contributed to this mishap, they all related to “serious failures in BP’s management system”. Notifications for four other orders were also issued, requiring BP to ensure the necessary crewing and expertise for crane operation both on land and offshore. The company was also told to verify its system for monitoring how contractors carried out their work and complied with the health, safety and environmental (HSE) regulations.

A further requirement was to follow up and continue developing BP’s management system and to ensure that changes to projects were followed up during testing and commissioning. Finally, the company was ordered to check management systems at its suppliers, so that testing and commissioning were carried out, and to make sure the necessary documentation was available before start-up.[REMOVE]Fotnote: Stavanger Aftenblad , 22 June 2004, “Tilsyn med pålegg til BP”.

July 2011 – fire on PCP

Inadequate maintenance was the PSA’s verdict on a fire which broke out in the compressor on Valhall’s process and compression platform (PCP) on 13 July. A shaft fracture on a cooling pump in a crane engine room was the immediate cause. The engine lost coolant circulation, causing a minor blaze to break out. Red-hot particles from the exhaust vent were blown across to ignite flammable gases emerging from a vent stack for the compression modules.[REMOVE]Fotnote: PSA, Investigation report: fire on Valhall PCP on 13 July 2011 , 4 January 2012.

A glowing cinder about the size of thumbnail floating onto the bridge between the PCP and the WP was the first indication of the fire to be noticed. The person who saw it reported the incident to the senior mechanic, who in turn saw flames two metres high in the vent stack. White smoke was also blowing from the crane’s exhaust vent while it was in use. This was immediately reported to the central control room (CCR). Instead of initiating a general fire alarm, however, the latter asked the area technician to check the position. Only when the blaze was confirmed to be genuine was a general alarm sounded. No alarms were triggered by smoke or heat from the fire.

The crane driver had received no signals that anything was amiss when the CCR initiated an equipment shutdown, and accordingly went to check why the engines had stopped. Through the blue-black smoke filling the engine room, he saw a small flame from the diesel injector for one engine. He succeeded in extinguishing this with the aid of a glove. But the heat, possibly combined with an increase in exhaust fumes as a result of entrained water vapour, caused red-hot particles to be blown out from the engine’s combined spark arrestor and silencer. The latter devices had more or less rusted away. It subsequently transpired that the spark arrestor was not classified as safety-critical equipment and accordingly had no maintenance programme.[REMOVE]Fotnote: PSA, Investigation report: fire on Valhall PCP on 13 July 2011 , 4 January 2012.

According to the PSA, ensuring that this device functioned was crucial and its failure increased the probability of igniting leaks from the gas coolers – an incident with major accident potential. The wind had blown red-hot particles from the exhaust vent over to the vent stack for flammable gases from the compressors, causing the gases to ignite. This could have had major consequences. If the crane engines had not been shut down, the blaze in the engine room could have developed into a diesel fire.

That would have caused piping for the diesel injectors to rupture and spray diesel oil on the exhaust manifold, leading to a much bigger conflagration and making it hard to evacuate the crane. The only escape route was a ladder next to the engine room door. It proved difficult to put out the fire in the vent stack. No automatic extinguishing systems covered the area, and it was considered too risky to send in personnel with hoses. No assessment of how to fight a fire there had been made, so it was decided to deploy a standby ship with FiFi water monitors to spray water on the flames.

The fire was extinguished in just over 90 minutes, but no standby ship with FiFi monitors was included in the emergency response plan for Valhall. Although nobody suffered physical injury, the PSA considered that the fire could have led under slightly different circumstances to a serious condition on the platform.[REMOVE]Fotnote: PSA, Investigation report: fire on Valhall PCP on 13 July 2011 , 4 January 2012. Production from Valhall was suspended for nine and a half weeks as a result of the incident.[REMOVE]Fotnote: Stavanger Aftenblad , 13 July 2011, “Brann på Valhall”.

Read more in the article entitled “Fire on PCP – a reflection of old installations?”

July 2011 – well kick

BP lost control on 22 July of a well being drilled to store cuttings and other waste on Valhall when gas suddenly intruded into the borehole. This kick was remedied by pumping “kill mud” into the well so that the gas could be circulated out. Another serious incident had arisen only days before in the same well, when a leak occurred through the cemented casing in the well. A pressure test showed that this involved one-two barrels per hour. Both incidents were classified at the most serious level, described as a “serious weakening or failure of safety functions or other barriers, so that the facility’s integrity is at risk”.[REMOVE]Fotnote: Dagens Næringsliv , 29 August 2011, “Mistet kontroll over Nordsjø-brønn”.

November 2013 – serious nonconformities

Hess og rettighetshaveres ansvar, forsidebilde, arbeidsliv,

Valhall licensee Hess Norge AS was ordered by the PSA to conduct a full review of its management and documentation systems after an audit had found what were described as serious nonconformities. Issues related to organisation, management, documentation and handling of risk were key components in the audit. This revealed that Hess had serious deficiencies in its management of the business and failed to satisfy regulatory requirements. Hess was the first licensee without operator responsibilities to be audited by the PSA after it had developed a method for supervising such companies.

Hess has an interest of about 64 per cent in Valhall, with operator BP holding the remaining 36 per cent. The US company has been a player in Norway’s oil and gas sector since activity started in 1965, but with varying levels of involvement and organisation. It moved its head office back to Stavanger in 2007 after a period in Oslo, primarily to get closer to its partners and the broader petroleum community. The PSA’s audit identified three nonconformities related to the company’s management system, its handling of risk and its documentation system.

Hess was found to lack such fundamental capabilities as a functioning management system to meet HSE requirements, and was unfamiliar with the basis for its own risk management system. In addition, the absence of a documentation system meant that it was unable to trace old documents and thereby establish what it had done earlier.[REMOVE]Fotnote: Teknisk Ukeblad , 13 January 2014, “Petroleumstilsynet fant ‘alvorlige’ HMS-avvik på Valhall”.

The PSA also identified an improvement potential in relation to the dual role which licensees are meant to play in a production licence.[REMOVE]Fotnote: PSA audit report, 14 November 2013, Tilsyn med Hess som rettighetshaver i Valhall utvinningstillatelsen. Pursuant to the framework HSE regulations, the PSA ordered Hess to conduct a full review of the regulatory requirements concerning the management of activities and to implement measures to fulfil these requirements in its own activities. The company was given until May 2014 to comply with this order, and the PSA was to be notified when the work had been carried out.[REMOVE]Fotnote: PSA, 20 December 2013, Pålegg gis etter tilsyn med Hess som rettighetshaver.

2014 – quarters platform shut down

Boligplattformen QP, forsidebilde, feltet, Alarmen går… et utdrag hendelser på Valhall

The PSA decided in December 2014 that the quarters platform (QP) on Valhall had to shut down during the winter following a study which found that it could collapse if struck by high waves. This assessment by Sintef and Marintek indicated that the risk of a wave which could threaten the QP’s structural integrity was higher in November-March than Norway’s offshore regulations permitted.[REMOVE]Fotnote: Offshore.no , 12 December 2014, “BP-plattform kan måtte stenge”.

The oldest platforms on Valhall, standing at the southernmost end of the NCS, had been installed 34 years earlier. Seabed subsidence meant that their topsides were closer than before to the waves, and that the required air gap no longer existed. A high level of activity on Valhall meant that BP needed accommodation capacity, but fewer people could work there if the number of berths was reduced.

The cost of closing the QP and acquiring a flotel to provide alternative berths meant that it and its partner, Hess, had to lower their ambitions for the field.[REMOVE]Fotnote: Offshore.no , 19 December 2014, “Får ikke forlenget levetid”.

arbeidsliv, Alarmen går… et utdrag hendelser på Valhall

arbeidsliv, Alarmen går… et utdrag hendelser på Valhall

arbeidsliv, Alarmen går… et utdrag hendelser på Valhall

At the time of this writing in 2014, Valhall has only two licensees – BP Norge AS, as operator with 35.95 percent interest, and Hess Norge AS with the remaining 64.05 per cent. This structure is very different from when the license was originally awarded in 1965, with Amoco Norway Oil Company serving as the operator and holding 28.33 percent interest.

The first partners were Amerada Petroleum Company of Norway and Texas Eastern Norway Inc., also with 28.33 percent, plus the Norwegian Oil Consortium A/S & Co (Noco) with 15 percent interest. Enterprise Oil Norway A/S took over Texas Eastern’s interest in 1989, while Elf Petroleum Norge AS bought Noco out of the field in 1992. Amoco and BP merged in 1998, giving the new BP Norge AS a 28 percent stake in the license. After various mergers and sales of holdings, Hess ended up with almost two-thirds of the field.

Although the operator is responsible for the day-to-day operations management, Norway’s Petroleum Safety Authority (PSA) Framework regulations require the non-operating partners to contribute actively and to check compliance with the regulations. These rules impose clear duties to support and challenge the operator, to be a competent collaborator and to “see to it” that petroleum operations are conducted in an acceptable manner.

Hess og rettighetshaveres ansvar

In 2012 the PSA launched a campaign to ensure that non-operating partners were fulfilling their “see to it” obligations defined by these framework regulations. This campaign involved conducting an audit that focused on organization, management, documentation and risk management.

Hess Norge was chosen as the first non-operating licensee to be covered by the new audit process.   As a result of the audit, Hess Norge received orders from the PSA in January 2014.

In Norwegian regulatory practice, an order is an individual decision based on the regulations. Before the PSA issues an order, it sends a notice to the company concerned. Notice of an order is neither an instrument nor a warning of sanctions, but part of the PSA’s administrative routines. The notice asks the recipient to assess the finding on factual basis. The notice is merely a first step before an order is issued. The order has a strongly preventive character and is legally binding on whoever receives one.[REMOVE]Fotnote: PSA 4 December 2013, Notice of order to Hess – Valhall.

The 2012 Hess Norge audit was the first time PSA conducted an audit on a non-operator directly and the PSA plan was to carry out similar audits on other non-operators.  According to the PSA, no special factors prompted it to take a closer look at the non-operating licensees. Under the regulations, the licensees must make provision for the operator to perform its role. They have a duty both to “see to it” and to take action. Their “see to it” duty (påseplikt) is a Norwegian legal term for the requirement that the license partners must follow up the operator in a systematic manner. How this responsibility is exercised must be specified in their management system. Accordingly the licensees must be able to document that they possess sufficient resources and expertise to be able to decide how the operator is doing its job.

The duty to take action includes ensuring that conditions comply with the regulations, and imposes an independent obligation on the non-operating licensee to obtain adequate information. That means the non-operator, depending on the factors involved in specific cases, may have a duty to conduct audits of the operator.[REMOVE]Fotnote: PSA, 14 February 2012, Responsibilities of operators and licensees.

The findings of the audit identified that Hess had to improve their documentation system needed to track decisions and basic documents and needed to demonstrate a management system in accordance with the regulations system.[REMOVE]Fotnote: PSA, 14 February 2013, Audit of Hess as a licensee in the Valhall production licence. However, Hess was in a process of developing a new management system which would satisfy both the Norwegian regulations and the requirements of Hess Corporate, its parent company.

The second non-conformity identified dealt with its risk management system. While Hess had conducted annual risk workshops they were unable to rigorously document results and action plans from these activities as well as recording that the results had been applied to the license.

A third non-conformity was about the robustness of its documentation system. Contributing factors was that former employees had handled documentation personally and that some activities had been conducted by the company’s former London office. Documentation was difficult to trace and the system needed improvement.

To address the audit findings Hess Norge established a comprehensive process-based Management System that addressed the regulatory requirements, implemented a Risk Management Practice and a Document Management System. Training was provided across the organization on these Systems and this training as well as internal audits and compliance checks continue to take place regularly.  The order was closed and the PSA confirmed that the company has got its systems to function.[REMOVE]Fotnote: Teknisk Ukeblad, 13 May 2014, “Nå skal Petroleumstilsynet på tilsynsoffensiv mot rettighetshaverne”.

The trust had to be dismantled following a judgement from the Ohio supreme court in 1892, and its 20 companies became subsidiaries of Standard Oil Company (New Jersey).

Standard Oil (Indiana) began acquiring other oil companies, and had grown by 1901 into an enterprise represented in 11 US states.

The growth in motoring prompted the company to commit in 1910 to petrol deliveries, and it accounted within a year for 88 per cent of sales of this product and paraffinin the mid-western USA. It opened its first service station in Minneapolis, Minnesota, in 1912, and moved outside the mid-west the following year with a facility in Chicago.

Standard Oil (Indiana) became independent from the Standard Oil group in 1911. It acquired market share across most of the mid-west and the exclusive right to the “Standard Oil” name in that region.

American Oil Company was absorbed by Standard Oil (Indiana) in 1922, and a share swap took place in 1923 with Pan American Petroleum & Transport in exchange for guaranteed oil deliveries.

Standard Oil (Indiana) established several refineries and drilling facilities during the 1920s and 1930s. Along with new oil refining processes, it developed Stanolind in 1931 asa prospecting and production arm. This was followed by a period of intensive prospecting and exploration, with the company drilling more than 1 000 wells in 1937 alone.

Joseph Christian Leyendecker (1874-1951) created during World War 2 a poster series commissioned by Amoco Gas. The first in the series, In the Nation’s Service was published shortly after the United States entered World War and and shows a baby with army cap, saluting in support of the war effort.  Speed the Victory  was published, showing a baby flying an airplane and equipped with weapon, hoping for quick victory and a speedy end to the war. By early 1944, a parachuting baby is hoping for a Happy Landing : a peace dove holding an olive branch in its mouth symbolizes yet more hope for an end of the war.

In 1947, Standard Oil (Indiana) became the first company to drill offshore in the Gulf of Mexico. It also developed Hydrafrac – hydraulic fracturing – as a new drilling method.

Standard Oil (Indiana) ranked as the USA’s largest domestic oil company by 1952. Nine years later, in 1961, it launched a total reorganisation of its corporate structure. American Oil Company became responsible for all US retail sales, under the Standard name in the mid-westand as American in the rest of the country. Both organisations used the same logo, differing only in the wording.

Amoco became the designation for the company outside the USA and on certain American Oil Company products, and expansion continued.

This initially took it to Canada, thereby becoming an international enterprise. Further growth carried it to more than 30 countries and created one of the world’s biggest oil companies.

Its name was officially changed to Amoco Corporation in 1985.

Read more about the merger with BP.

Logo

The first Standard Oil (Indiana) logo was adopted after a competition in 1926. It comprised two nested circles, with the outer one symbolising strength,stability and reliability.

“Standard Oil Company (Indiana)” was inscribed in red letters inside this circle, and the inner circle symbolised service to the customer with the word “service”emblazoned within it.

Also decorated with a burning torch as a symbol of progress, the logo was largely used on service station buildings. On the roadside stood a rectangular blue sign with the words “Standard Service” in white capitals.

A new logo introduced in 1932 was the first to feature the Amoco name. Shaped as an oval,it was divided horizontally into three sections.

The top and bottom fields were red, with the central stripe in black with the name in white letters. This device was used in the north-eastern USA.

Standard Oil (Indiana) developed another logo in 1946 where the torch was combined with anoval Amoco badge. The colours were changed, with red on top, then white and blue at the bottom.

This new emblem was called the “Torch and Oval”, or T&O. In those parts of the USA where the Standard name could not be used, the text read “Utco” or “Pan-Am”. When the latter was replaced by Amoco, it marked the first time the T&O was used with that name.

The T&O was redesigned in 1961 to produce a flatter oval shape and a more up-to-date torch design. Standard was used as the US name and Amoco in the rest of the world.

In the final adjustment, introduced in 1971, all the lines were enhanced. The names Standard or Amoco were given a more italicised form and thicker letters were used.

Norway had become a fully fledged oil nation by the early 1980s, when its offshore production was fetching good prices in international markets. The future also looked bright for the multinational oil companies which had established a presence on the Norwegian continental shelf (NCS). But Valhall operator Amoco Norway was among the companies hit when oil prices halved in 1985-86. Declining production also contributed to a fall in earnings. Something clearly had to be done, and a turnaround was launched in late 1987.

Amoco needed a new top man in Stavanger, and Canadian Robert (Bob) Douglas Erickson arrived in late 1987 as managing director with new visions and objectives. Change and reorganisation were key elements in his thinking, which envisaged creating a flexible new organisation with adaptable and innovative employees. Erickson’s goal appears to have been a “fluid” organisation, a flexible entity with flourishing informal internal communication utilising ad hoc structures such as work groups. At the same time, employees would get things done by adapting readily. The task was to create an innovative company which was particularly good at continuously adjusting to every change in the outside world.

So what processes did this Canadian rescuer initiate, and what were their goals? And what theories and organisational philosophies inspired the changes experienced by the company? The ideas and visions pursued by Amoco Norway’s management found expression in the Amoco Info house journal, which was published several times a year and distributed to all employees.

Erickson had his own regular column in this publication “From the President”, which he used to communicate conditions in and changes to the organisations. In addition to other articles, interviews with members of the management at the time and manuals for some of the programmes launched have been used as sources.

When Amoco arrived

A Norwegian subsidiary was established by US oil company Amoco Production Company in 1965 in order to participate actively in drilling operations in the country’s sector of the North Sea. This Amoco Norway Oil Company arm was involved in the offshore hunt from the first licensing round, which was announced on 13 April of the same year.

Amoco applied for 40 blocks in this round together American partners Texas Eastern and Amerada as well as the newly established Norwegian Oil Consortium (Noco). They secured 10 blocks in three licences, including two of the most sought-after holdings on the southernmost NCS. Amoco became operator of these licences, one of which contained Valhall. When this field was established as commercial in 1975 with the eighth well, the job of building up a Norwegian organisation began in earnest.

Its initial assignment was to plan and build the necessary platforms. An establishment for operating the offshore facilities followed, with a corresponding “shadow” team on land. This outfit had a hierarchical configuration based on large, ineffective departments with a number of middle managers and foremen.[REMOVE]Fotnote: Interview Nomi-00007-03, Norwegian Petroleum Museum.

The company moved to new premises in central Stavanger, engineering design of the platforms began and fabrication contracts were awarded. Valhall production was formally inaugurated on 26 May 1983. Everything looked promising, but the field soon proved to be one of the most challenging on the NCS.

That reflected the chalk reservoir, which differed from most producing formations off Norway. Wells collapsed and the soft rock followed the wellstream to the topside. Large quantities of sludge looking like discoloured toothpaste had to be dug from the drill floor. This southernmost Norwegian field was dubbed the “problem child” by the media in 1985, when only one of its five wells was still producing and overall daily output lay below 40 000 barrels.

That was less than half the planned volume. Since the expected progress had stalled, no personnel were being recruited with an eye to sustaining future operations.

Departments were downsized, and the exploration team almost disappeared – it was reduced to just three people. In addition came the dramatic oil price slump of the mid-1980s.

No resources were available for active exploration, and Amoco refused to apply in the next licensing rounds. The vision of becoming one of the major operators on the NCS vanished, and all energy and attention focused on getting Valhall back into profit.

The organisation showed signs of fatigue, and employees were frustrated.[REMOVE]Fotnote: Interview Nomi-00007-03, Norwegian Petroleum Museum. Staff turnover reached no less than 31.3 per cent during this period – a dramatic proportion.[REMOVE]Fotnote: Amoco Info , 1991, no 1.

Unemployment was low in Norway at the time, and many personnel opted to try their luck elsewhere rather than sticking to a company with no prospects. Amoco lost much expertise to rivals.

The many disappointments and poor earnings – Norway contributed only about five per cent of Amoco’s overall production – also led to a downgrading of the Stavanger subsidiary.

Offered a generous retirement package, the managing director was not replaced. This signalled that the Norwegian arm had lost status and was now under more direct management from the USA.

Uncertainty prevailed in the company about what the senior executives in Chicago and Houston intended to do with it. But Erickson’s arrival suddenly reversed the outlook.

Turnaround

The new chief executive launched a turnaround which was to extend over several years, with one process following on the heels of another. His goal was to build a new corporate culture and thereby turn Amoco Norway into an outstanding company which led the way. Culture, values and visions were thought to be vital in achieving this, and Erickson was among the many who believed that companies possessed attitudes which were capable of amendment. The idea appears to have been that companies needed symbols, ideologies, languages, beliefs, rituals and myths. Clear shared values underpinned the idea that the interests of company and employees were indistinguishable.[REMOVE]Fotnote: Peters, Thomas J, and Waterman, Robert H, Jr (1982): In search of excellence: lessons from America’s best-run companies , New York, Harper & Row, 77.

Most companies have heroic legends which express the fundamentals of their culture, and that also applied to Amoco Production Company. Its history – or myth – had begun a century earlier on a piece of waste ground in Indiana, where the Standard Oil Trust of Indiana (later Amoco Production Corporation) was founded in 1889. This modest refinery developed into a big international energy company with worldwide operations and a level of success on a par with the biggest of the oil majors. According to the legend, Amoco’s progress was a result of the people who composed it – the able employees who liked a challenge and were inspired to work towards the company’s goals.    Their motivation, combined with good management, had ensured success. Amoco Norway was part of the “family”, and therefore also inculcated with this traditional ability and pride in one’s work.

Although Amoco’s real history differed a bit – it was founded by John D Rockefeller as part of his Standard Oil Trust – the myth helped to give employees self-esteem and a sense of belonging. Erickson’s cultural realignment began with the formulation of a vision for Amoco Norway’s future, where he spelt out what the company should look like in 10 years time.

He envisaged returning to Stavanger as a representative of the top management to learn from the Norwegian experience and the company’s success. His hope was that everyone in the city would know the Amoco name and that it would adorn the front pages of the nation’s newspapers in headlines such as “giant discovery for Amoco” or “successful Amoco development”.

This vision was conveyed to the workforce both offshore and on land. Erickson seems to have wanted to get everyone to feel and believe that the company would grow and that they were part of this progress – and perhaps its most important element. It was emphasised that attention could not be concentrated only on the bottom line in the accounts, but should also extend to the employees.[REMOVE]Fotnote: Rasen, Bjørn (2007): LF6A. Valhall at 25 … and it’s only the beginning , 229.

Amoco Norway would also be moving to new premises – a landmark building, modern, forward-looking and conveying a warm impression. It would also be tailored for the multidisciplinary teamwork which Erickson regarded as the new way of working. The carefully configured layout included an open reception area and a centrally located office for Erickson, where he would be available – and not hidden on the top floor with the best view. These concepts were greeted with enthusiasm both on land and offshore. Erickson and his Norwegian team also received plaudits when they presented them to top management in the USA.[REMOVE]Fotnote: Rasen, Bjørn (2007): LF6A. Valhall at 25 … and it’s only the beginning , 229.

This vision summed up a number of the elements which were to occupy a central place in the change processes launched over the next few years.

Effectiveness survey

Although much was talked about the employees, the company still had to make money. All personnel were polled in 1988 to identify areas where action could be taken to make Amoco’s whole international organisation better and more efficient.

Erickson’s comment on this organisational effectiveness survey was: “I know you’ll see the positive aspects of this process, and take this unique chance to make your own contribution”.[REMOVE]Fotnote: Amoco Info , no 1, 1988, From the President.

The response rate was high both globally and in Norway, exceeding management expectations. Focus groups were established to identify problems in the Norwegian organisation on the basis of the responses, find their causes and come up with solutions.[REMOVE]Fotnote: Amoco Info , no 3, 1988.

At the same time, the management constantly highlighted the difficult conditions facing the industry when oil prices were persistently low.

Erickson wrote: “I’d therefore urge everyone to work efficiently and cost-consciously, and to try to find new ways of improving our general productivity both on land and offshore, so that the effect of the tough financial conditions can be minimised”.[REMOVE]Fotnote: Amoco Info , no 3, 1988, From the President.

A key finding of the survey globally was the need to reform the management culture. The answer for the parent company and for Erickson was a new approach, where managers naturally and regularly created a working environment which inspired employees to be creative.

Searching for excellence

The processes initiated, and not least the language used, clearly indicate that Erickson and Amoco Production Company had been inspired by organisational pundits writing in the early 1980s. Known as “new leadership”, their theories were characterised by a focus on the internal culture of organisations and its significance for efficiency and flexibility.

Leadership was defined as culture-building – in other words, an effective manager was one who succeeded in creating a constructive corporate culture. But this set of attitudes could not be shaped by senior management alone. It emerged through interaction between the members of the organisation. Perhaps the best-known work on “new leadership” is In search of excellence , by Thomas J Peters and Robert H Waterman Jr, which appeared in 1982. This book seeks to identify the characteristics of leadership in the world’s most successful companies – as defined by the authors.[REMOVE]Fotnote: Peters, Thomas J, and Waterman, Robert H, Jr (1982): In search of excellence: lessons from America’s best-run companies , New York, Harper & Row.

Both Amoco and Erickson appear to have been influenced by this innovative theory on corporate culture, and perhaps particularly by the Peters and Waterman study. Success stories highlighted in their book were held to share eight features ­– including closeness to customers, active decision-making, autonomy and entrepreneurship, and a simple structure with lean staffs. The others were pursuing productivity through people, being hands-on and value-driven, sticking to the business they knew, and being able to swap between loose and tight management. In the authors’ view, the rational and analytical approach belonged to an old paradigm which underplayed values such as shared culture, internal competition and pressure from colleagues. But these were precisely the qualities regarded as the most important motivational forces by the proponents of “new leadership”.

If Peters and Waterman were to be believed, becoming an excellent company – the best of the best – required several elements to coincide.

The main goal was to build up a strong culture and a set of base values rooted in a vision. That had to start with management. The organisation had to be simple, with a small top team.

This structure had to be reorganised regularly to maintain flexibility and speed, and to counteract the normal tendency towards conformity and inertia.

Employees had to be encouraged to innovate and experiment, and the best way to achieve this was to strive for organisational fluidity.

This was characterised by informal communication between ad hoc work teams with relatively few members, which existed for limited period – preferably only a few months.

Personnel should be viewed as a source of ideas, and not just pairs of hands. Management needed to be both practical and value-driven, and it was important to bear in mind that the company’s fundamental philosophy at any given time meant more for its results than technological or financial resources.

To become successful, a company also had to “stick to the knitting” – carry on with what it knew best in terms of its core business.

Peters and Waterman also emphasised both hard and soft values, arguing that management should display simultaneous loose and tight properties.

The overall idea of adopting a strong culture and clear common base values was to create a family feeling among employees, with the company giving them a sense of belonging.

According to the two authors, so strong was the need for meaning that “most people [would] yield a fair degree of latitude or freedom to institutions which gave it to them”.

The final and crucial theme identified by Peters and Waterman was the relationship with the customer, which they believed could not be over-exaggerated. Companies must listen to both internal and external clients, seek their advice and learn from them.

As noted above, this culture-based theory seems to have been the foundation on which Erickson intended to build the new Amoco Norway.

Healthy organisation with healthy bodies

The new chief executive was concerned to build an organisation which collaborated. Arriving in Norway, he was surprised at the compartmentalised or “silo” thinking which dominated the company.

He found that departments such as procurement, drilling, maintenance and operation failed to communicate with each other, and pursued to some extent different goals.[REMOVE]Fotnote: Interview Nomi-00007-03, Norwegian Petroleum Museum. The result was an inefficient organisation and systemic delays.

Stavanger hero Kjell Schou-Andreassen – a former football player and one of Norway’s most successful coaches in this sport – was recruited to launch the cultural shift.

After his sporting career was over, he had built up his own company specialising in personal development and offered experience of building teams.

The idea was that he could contribute strategies and know-how to creating Amoco’s new culture. This aimed “to improve an already fine organisation by ensuring that each and every one of us works together as a single team towards a common goal”.[REMOVE]Fotnote: Amoco Info , no 1, 1988, From the President.

Attention focused on developing a management responsibility at every level through systematic training. A good team was one governed by a set of rules, and breaching these would carry penalties. Nothing was said about what these might be.

In addition to getting all players to obey the rules and perform together, the emphasis was on shifting rapidly between defence and attack.

The football rhetoric was unmistakable. A balance also had to be struck between the challenges taken on by the teams and the skills available, and they had to pull in the same direction.

In addition, a health programme was incorporated in the new strategy. Dag Kaas, a well-known sports and management coach, joined the implementation group.

A healthy body ­– created by good diet and exercise – was to help build a sense of solidarity in the company. Personnel were encouraged to compete jointly in sporting events, for example.

Several elements from the innovative culture theories were merged in the new management development programme. Employees would learn to work in teams with shared values and common goals. This also helped to build a common identity.

The workforce was eventually offered exercise equipment and other products in Amoco’s colours and logo, which they could use in their free time. A case in point was Stavanger’s annual Ingrid run, which had aroused great enthusiasm among employees.

But this “uniform-wearing” was not necessarily adopted only to create a sense of identity, according to senior researcher Ulla Forseth at the Norwegian University of Science and Technology (NTNU).[REMOVE]Fotnote: Forseth, Ulla, “Som logo”, Arbeid for livet , Oslo, 2002.

She argues that, by turning personnel into living mannequins, a company achieves a personification of its logo. Employees identify with the services it offers and thereby become willing to devote “a little extra”.

American sociologist Richard Sennett, a specialist on working life, writes in The Corrosion of Characterabout the steady spread of sporting rhetoric in companies – with departments becoming teams and bosses becoming facilitators or team leaders.

Companies can then alter, adapt and reorganise without managers having to justify their actions. Everything is down to change – and “change” is not a person who can accept blame.[REMOVE]Fotnote: Sennett, Richard (1998): The Corrosion of Character, the Personal Consequences of Work in the New Capitalism , Norton, 115.

Managers first

To create the organisation and corporate culture Erickson wanted, the whole senior management had to acquire a greater professional and commercial stamp. Valhall had to be operated as a team effort, and Amoco Norway must participate in future licensing rounds.

According to Erickson, the company’s most important objective in 1989 was:

to participate in exploration for and exploitation of petroleum deposits on the NCS. The goal is that this will be accomplished in an able and cost-conscious way in order to ensure maximum financial results for Amoco and Norwegian society. The activities involved will be pursued in a responsible and professional manner with regard to health, safety and the environment.[REMOVE]Fotnote: Amoco Info , extra edition, February-March 1989.

In line with the theories expounded by Peters and Waterman, Erickson also maintained that an organisational change had to start with the management.

“I chose to devote a lot of time and energy to building up the management, and made it clear that it would take a full commitment by everyone to achieve success,” he commented in an interview after his departure from Amoco.[REMOVE]Fotnote: Rasen, Bjørn (2007): LF6A. Valhall at 25 … and it’s only the beginning , 228.

Managers would show the way. All the jargon was deployed: they would lead, motivate, create trust, stand for openness and acknowledge their subordinates.

Many sessions were organised for top executives as well as the expanded management group. Team-building emphasised learning how to talk together in an open manner and to collaborate. The idea was that everyone formed part of a wider team, which also included suppliers, contractors and customers.

Work on building the new culture was eventually moved out into the teams. By the time things got that far, however, the programme was no longer functioning fully in line with the intentions.

Another aspect of Erickson’s management philosophy also appears to have been taken directly from the theories propounded by Peters and Waterman.

The aim was to work together with the employees, set an example, listen, be flexible, take decisions and have a bit of fun. So simple – and so difficult.[REMOVE]Fotnote: Rasen, Bjørn (2007): LF6A. Valhall at 25 … and it’s only the beginning , 230.

To achieve this, Erickson practised “management by wandering around”.[REMOVE]Fotnote: Rasen, Bjørn (2007): LF6A. Valhall at 25 … and it’s only the beginning , 230.

A manager should not call subordinates into his or her office, but instead visit them in theirs.

He appears to have believed in the benefits of giving personal recognition. Employees had to feel they could safely go to management with ideas or critical comments.

While this might be regarded as generosity, pleasure might not be the only result of recognising personnel. Peters and Waterman suggested it could also concern control, using instincts, and gauging the mood to detect if things were going well or badly.

A manager had to make themselves available, but their most important job was to listen.[REMOVE]Fotnote: Peters, Thomas J, and Waterman, Robert H, Jr (1982): In search of excellence: lessons from America’s best-run companies , New York, Harper & Row, 51. Peters calls this leadership style “management by wandering around”. He did not believe in management by edict, but more in informal control through casual personal communication.

Erickson had hung a graph outside his office door to show how much time he had devoted to walking around. It indicated how many employees he had visited and how long he had spent on this.[REMOVE]Fotnote: Rasen, Bjørn (2007): LF6A. Valhall at 25 … and it’s only the beginning , 230.

He also incorporated the concept of visible management and interpersonal communication in the drawings for the new offices which stood ready in Stavanger harbour in 1994.

The building was to be light and open, with many opportunities for meeting across technical disciplines. This reflected the philosophy that people who talked together solved problems and fixed things rather than adopting positions, quarrelling and delaying processes.

As mentioned above, a key concept was that Erickson’s office would not be located out of sight on the top floor with the best view, but in the centre of the building and accessible.

Another aspect of the Canadian’s management style was to have fun, an approach also endorsed by Peters and Waterman.[REMOVE]Fotnote: Peters, Thomas J, and Waterman, Robert H, Jr (1982): In Search of Excellence, 240. Amoco Norway became famed for its get-togethers and celebrations.

No expense was spared for the Christmas party. And to help build an Amoco identity, a different department each year was charged with providing the entertainment – helping to build solidarity and encourage creativity.

Amoco performance management

Erickson’s ideas and intentions on building a new company culture naturally also resulted in practical changes. An important step was a new assessment system for personnel – Amoco performance management (APM).

Everyone participating in this new process had to take a two-day course in order to understand what was involved and to establish a unified attitude towards it throughout the company.[REMOVE]Fotnote: Amoco Info , no 4, 1989, From the President.

Initiated by Amoco Production Company and applied to all its subsidiaries worldwide, APM was primarily a tool for helping managers to set annual targets with their subordinates and to discuss how these could best be met.

Follow-up reviews would assess the goals and how they were being met, and make possible adjustments. Progress, developments and effectiveness would be evaluated close to year-end.[REMOVE]Fotnote: Amoco Info , no 1, 1990.

Another process called “employee involvement” was interwoven with APM and also applied worldwide.[REMOVE]Fotnote: Amoco Info, no 5, 1989. Put briefly, this meant management and rank-and-file jointly accepting responsibility for meeting the company’s goals.

The aim was to contribute to creating an environment where personnel were motivated to be active in promoting ideas and recommendations which helped Amoco meet its objectives.

An attitude rooted in openness, mutual support and collective commitment was to be created. Managers were expected to encourage

subordinates to come up with proposals and ideas, giving management the broadest possible basis for taking decisions.

The concept was to be incorporated as part of Amoco’s culture – wholly in line with the ideas of Peters and Waterman. Employees would be encouraged to take the initiative and to be innovative.

Management by wandering around also supported employee involvement because managers were accessible and personnel felt sufficiently secure to offer ideas and criticism.

It was emphasised that individuals should not have to work more, but do their job in a way which made greater and more efficient use of available resources.

In addition to Peters and Waterman, APM appears to have been influenced by another strand in organisation theory originating during the 1980s – the performance management system (PMS). This covered activities intended to ensure that goals were consistently attained in an efficient manner.

It was developed by Aubrey Daniels to describe a technology for handling both behaviour and results, but eventually became a collective term for organisational solutions where instrumental rewards were introduced as essential mechanisms for success.

The main point was the employees should be rewarded in line with their commitment – those who contributed most to the company’s progress should receive more than those who added less.

Incentive pay

Performance-related pay was, indeed, the next step in reforming Amoco’s corporate culture. This meant that an individual’s pay award would reflect their commitment over the preceding year.

The annual APM evaluation, which looked at how the employee had done their job and whether they had exceeded expectations, was also used to determine their remuneration.

In other words, this involved what would now be called incentive pay to encourage greater dedication and efficiency.[REMOVE]Fotnote: Amoco Info, no 5, 1989. Delivering weak results accordingly carried a penalty.

This system is common in a number of sectors today, and a constant topic of debate. It was headline news in Norwegian media when Statoil adopted a marking system for employees in 2011.

Marks were given not only for professional competence and development, but also for behaviour. Pay rises are then allocated in relation to the number of points scored.

One criticism of the system is that having a “face which fits” can be crucial for both promotion and pay determination. But Amoco was not alone in adopting incentive pay in the 1980s and 1990s.

A number of examples can be cited of companies – particularly in the consultancy sector – which were already linking pay and promotion to performance assessments in the early 1980s.[REMOVE]Fotnote: Teknisk Ukeblad, issue 25, January 2011, “Flere gir ansatte karakterer”.

In addition to incentive pay, a system for “recognition and reward” was introduced in Amoco as a way to show appreciation for a commitment far beyond the expected level.

Extraordinary performance in projects with tight deadlines was also recognised, as was creativity which resulted in substantial savings and/or financial productivity.[REMOVE]Fotnote: Amoco Info , no 3, 1990.

Rewards under this system were divided into three levels: public acknowledgement from a superior, non-financial symbols and cash payments.

A direct connection can again be seen here with Peters and Waterman, who considered small rewards to be more effective than large ones. Big bonuses often became political, and could discourage those who failed to get them.[REMOVE]Fotnote: Peters, Thomas J, and Waterman, Robert H, Jr (1982): In search of excellence: lessons from America’s best-run companies, New York, Harper & Row, 71.

The two authors divided what they termed reinforcement into several levels – appreciation from senior management, ceremonies during coffee breaks, and winners who received a gift and had their names publicised.[REMOVE]Fotnote: Peters, Thomas J, and Waterman, Robert H, Jr (1982): In search of excellence: lessons from America’s best-run companies, New York, Harper & Row, 176.

Assessment by Norwegian management

Sickness absence in Amoco Norway fell from a peak of 3.73 per cent in 1987 to a record low of 0.78 per cent by 1990. And staff turnover was just 2.1 per cent in the latter year, compared with a maximum of 31.3 per cent in 1985.

These developments were interpreted by the management as clear indicators that the company had succeeded in its process of cultural change.

Some of the improvement can undoubtedly be attributed to changes in the overall labour market, which resulted in higher unemployment.

Nor is it possible to exclude the Hawthorne effect, which specifies that every change to a variable results in increased production.

That reflects the extra attention devoted to the employees during the process, which has a motivating effect in itself and explains the positive impact.

A key element in the “new leadership” theories was precisely that people who are given attention increase their productivity.[REMOVE]Fotnote: Peters, Thomas J, and Waterman, Robert H, Jr (1982): In search of excellence: lessons from America’s best-run companies, New York, Harper & Row, 94. Continuous change would accordingly promote continuous improvement – a concept Erickson soon introduced in Amoco, as we shall see.

But several factors contributed to the company’s progress, and it found 1990 to be a very good year in many ways – not least because the first Gulf War boosted oil prices.

Amoco had also brought the Valhall wells under control, production from the field was good and the company brought Hod on stream as its second NCS development.

In fact, the Norwegian subsidiary was doing so well that it acquired the status of a separate business unit, reporting directly to top management in Chicago.

Until then, important proposals, contracts, staff changes and so forth had to be approved at several intermediate levels before reaching the corporate summit.

The new status was intended to provide Amoco Norway with more control over its own commercial operations, and thereby give it greater responsibility for the results.

This upgrading was seen as evidence of confidence in the organisation and a conviction that Amoco in Norway had a long-term future. It was regarded as a pioneer for continuous improvement.

With the change in status and the greater self-government it allowed, Erickson’s ideas continued to be extended. Freedom of action applied not only to the company but also to each employee.

The idea was that, if a manager trusted their subordinates, it would have a positive effect on the individual’s sense of identity and thereby also on their productivity. Decisions could be taken faster and with a quicker response.[REMOVE]Fotnote: Amoco Info , no 1, 1991.

But the positive results achieved did not halt the efforts to change, with the performance improvement process (PIP) and continuous improvement (CI) being added to portfolio.

Performance improvement process

High oil prices proved transient, and fresh concerns were expressed over inadequate earnings combined with an increase in operating costs.

Low and unstable prices were compounded by Norwegian government proposals to reform the petroleum tax regime in a way which could increase the fiscal burden on Amoco.

In other words, the outside world and the market were unpredictable and constantly changing – and the company had to keep up. In this endless process, Amoco had to strive for greater adaptability and organisational flexibility.

With his constant introduction of new processes, Erickson provides a good example of what Sennett sees as the problem for a modern leader – standing still is the same as being left behind.

Instead, today’s managers must change, adapt and reorganise. Everything is in motion and the latest ideas are already out of date. The solution is to launch a process, even if you are not actually sure what it deal with or where it could lead.[REMOVE]Fotnote: Sennett, Richard (1998): The Corrosion of Character, the Personal Consequences of Work in the New Capitalism , Norton, 87.

Becoming a business unit not only increased authority but also boosted responsibility for the results achieved. That led to the adoption of the PIP in 1991.

This was intended to be a long-term process which addressed the way Amoco Norway was run, and aimed to identify projects with various objectives – such as improved earnings.

Other ambitions were to streamline jobs and processes or eliminate those which were unnecessary, and to exercise cost management and control.

Each department had to choose a coordinator who would:

[I]nitiate brainstorming and solve the problems in a creative way through the active use of co-determination, teamwork and interpersonal communication skills. This process will combine and practise many of the initiatives which have already been initiated, such as co-determination, interpersonal communication skills, recognition and reward, teambuilding and APM.[REMOVE]Fotnote: Amoco Info , no 2, 1991.

Employees were urged to submit ideas and proposals for improvement. It was emphasised that the whole workforce shared responsibility for the company’s success, and each person could exercise great influence on its commercial results through active participation in the PIP.

The financial position and ever tougher competition were cited as reasons why the new process was needed. “This strengthens the need to support the PIP initiative actively.”[REMOVE]Fotnote: Amoco Info , no 3, 1991.

Suggestions and ideas poured in, and the PIP coordinators collaborated with each other in implementing the proposals and thereby boosting the efficiency of Amoco Norway’s overall efforts.

The process was intended to improve the company’s financial results while not least creating a satisfactory working environment for all employees.

Continuous improvement

CI and Whitewater[REMOVE]Fotnote: This initiative has a lot in common with what is known as total quality management (TQM). were introduced in parallel with the PIP. While the latter involved a long-term project plan, CI was intended to make day-to-day operation more efficient and economic.

That meant defining commercial requirements more clearly, clarifying individual roles in customer-client relations (something we also find in Peters and Waterman), and developing better methods for work processes and problem-solving.

Whitewater was the CI project team, drawing up a strategy for developing the ability to compete effectively in a world of “constant and unexpected change”.[REMOVE]Fotnote: Amoco Info , no 4, 1991.

CI was not a new programme intended to replace its predecessors, but an addition to the work which had already been done. It provided more a description of the way Amoco operated.

Both it and Whitewater were intended to support the PIP process, and the company was told in no uncertain terms that this measure would affect every employee.

The initiative involved each person defining why and how they worked for each other. Everyone was to clarify the work processes they were involved in, who their customers were – both internal and external – and what these clients required.

In addition, the quality of all the work done would be measured and nonconformities identified, and improvement measures would be adopted.

Manuals and training programmes were developed. A key point was that all employees were to be trained in and had to use a common set of concepts.

Attention would be focused on products, services and customers, and each employee had to ask themselves every day “What have I done to improve my work”. One goal was to identify unnecessary tasks and exclude them from the system.

The process was followed up with a new guideline called Amoco career management (ACM). All employees were given access to computerised details about internal vacancies.

Amoco wanted to increase the number of applicants for such posts in order to simplify the process of moving people to positions where their expertise could be used to the full.

Through the Amoco self-nomination application process (ASNAP), employees could also see what expertise was needed for each job. An individual development plan (IDP) would then be developed for them.

A form covering future ambitions had to be completed by the employee. The IDP was then discussed with their team leader, who would do a reality check on the hopes expressed.

The plan spelt out the skills which the person felt were required to get where they wanted – not only the capabilities, experience and knowledge they thought they already possessed, but also those they needed to acquire.

Each employee was offered a personal development course lasting a day and a half, which was given the catchy title of Amoco career management – managing personal growth (ACM-MPG).

It was meant to help participants identify new opportunities for growth and development, and required them to assess their most important positive qualities, motivational factors and skills.

The development programme was said to be voluntary, with nobody forced to plan their own career or check jobs in the ASNAP. But commentators maintained that the company and its teams had to have a strategy for reaching their objectives.

If an employee failed to submit the form setting out their ambitions, it fell to the team or – ultimately – the company to shape future job opportunities without taking account of that person’s wishes or needs.[REMOVE]Fotnote: Amoco Info , no 2, 1993.

The management and change process which had been introduced in Amoco Norway until then were largely well received. But a further reorganisation was introduced in 1993 under the New Start name.

When everything fell apart

It turned out in June 1992 that Amoco Norway was still failing to meet the financial targets set for the company – despite all the changes and improvements.

Both earnings and production were below budget, while total costs outstripped the planned level. Something had to be done – new adaptations implemented.

That applied not only to the Norwegian subsidiary, but also for the whole international company. Initiated once again from the USA, the New Start process comprised eight stages.

First, the number of contractors was to be reduced and recruitment policy reviewed. All work would be evaluated in terms of its necessity or contribution to value creation.

Every opportunity was to be taken, moreover, to concentrate attention on areas where personal development and improved performance were required.

Third, the whole organisation was to be assessed. A restructuring was recommended to improve efficiency and streamlining in general. The authority structure was to be described more clearly, so that responsibility rested at the right level and was clearly defined.

The fourth point related to the CI process, which would ensure that all work done by each employee was necessary and created value.

Each job was to be done faster by a process of work re-engineering. To assist the improvement process, groups were established to rationalise and improve all tasks covering several teams or departments.

Where business-related costs were concerned, the importance of all business trips, conferences and out-of-town meetings was to be assessed.

Management and personal development also appeared in the eight-point plan. Everyone was to given opportunities to develop, train and grow professionally, and good leadership was to be identified and practised – based on each individual being conscious of their responsibility.

Amoco Norway would continue to grow, and persist in seeking new licences and operatorships in future rounds.

The final point covered customer relations and image. Amoco would have a strong, positive customer relationship with government, partners and international colleagues – all should be met with respect and recognition.[REMOVE]Fotnote: Amoco Info , nos 1-2, 1992.

Management pointed to the changeable and difficult times to justify the reorganisation and cut-backs, and called for a continuous and selective restructuring and adaptation on the basis of the eight points listed above.

It soon became clear that organisational changes would be sweeping. The restructuring aimed specifically to boost financial results, enhance efficiency and reduce unnecessary bureaucracy.

A conviction that a flatter organisation was more effective underlay these moves. Emphasis was placed on groups of able people who collaborated in finding solutions and new opportunities.

The idea was to identify the personnel who were professionally prepared to enter a new era – those who were flexible and able to adapt.

Team leaders were to pick out those who failed to meet these criteria, based on the forms filled out by the workforce and the follow-up conversations each employee had with their manager.

The people identified in this way were urged to find another place to work. APM affected not only an employee’s pay and promotion prospects, but also their whole future in the company.

Re-engineering is a key concept here. This involves a radical redesign of work processes and, by seeing everything in context, can ensure a dramatic improvement in results.

Sennett argues that the term provides a semblance of efficiency, an illusion of a tighter organisation which differs radically from its predecessor.

But he maintains that re-engineering is actually a very chaotic process, and primarily an excuse for making people redundant. Power is concentrated without being centralised – a characteristic of a flexible system.

People at the bottom of the organisational structure gain more control over their own activities, but new information systems give management a comprehensive overview.

Employees end up with few places to hide. In modern organisations based on concentration without centralisation, control from the top is both strong and diffuse.

According to Sennett, cuts are unlikely to yield financial benefits because companies become dysfunctional during the actual downsizing process.

At the same time, employee motivation and morale fall as the changes proceed and the remaining workforce are left fearing that they will be the victims next time round.[REMOVE]Fotnote: Sennett, Richard (1998): The Corrosion of Character, the Personal Consequences of Work in the New Capitalism , Norton, 50-56.

That was to a great extent what happened in Amoco Norway. New Start represented a shift towards a leaner and more flexible company, but a process meant to contribute to continuous improvement also created constant uncertainty.

Even more new initiatives soon followed, additional processes were launched and further reorganisations took place. But the workforce, having been through a downsizing they saw as arbitrary, feared each of them. The workplace had become more uncertain, and several dozen people were made redundant.

New Start was supposed to create organisational flexibility by demanding adaptability from the workforce. While jobs were standardised, they also had to be constantly improved through more efficient use of time. Space was provided for established practices to be replaced by new and better ones.

The cultural change initiated by Erickson in 1987 and the subsequent processes to create a more flexible and secure company were largely welcomed by employees.

All the same, many felt that no sooner had a process “finished” than others took its place and the new systems were never given a chance to bed in.

But that was also part of the philosophy underlying the continuous improvement approach – constant change so that systems could not ossify and become bureaucratic and rational.

Bob Erickson left Amoco Norway in 1994, only a few months before the new prestige offices on the Stavanger waterfront were ready for occupation.

Retirement followed five years later for the man with the big vision of a modern and flexible Amoco Norway, and the leading believer that cultural change through continuous improvement was possible.

He left behind him a workplace which had become a little more uncertain and where the employees were a bit more concerned whether they were next for the headsman’s axe.