Equinor increased its purchases from Norwegian suppliers

The Johan Sverdrup field in the North Sea. (Photo: Bo B Randulff / Roar Lindefjeld / Woldcam)

In 2018 Equinor purchased goods and services worth NOK 141.7 billion ($16.6B) from more than 9000 suppliers globally.

Equinor said on Thursday that NOK 95.2 billion ($11.2B) of this went to suppliers with a Norwegian billing address, i.e. 67% of total purchases.

Peggy Krantz-Underland, Equinor’s chief procurement officer, said: “A competitive supply industry is highly important for the Norwegian continental shelf (NCS) and Equinor. Over the last year the Norwegian content of our total procurements has increased from 61% to 67%.

“The Johan Sverdrup project is the largest ongoing industrial project in Norway. In the first phase of the project Norwegian suppliers secured more than 70% of the contracts and in the second phase the Norwegian content is even higher. This is an indication of the the adaptability of the Norwegian supplier industry.”

Whereas Equinor’s total procurements declined from NOK 144.4 billion to NOK 141.7 billion from 2017 to 2018, the company increased its purchases from Norwegian suppliers by NOK 6.5 billion in the same period, from NOK 88.7 billion to NOK 95.2 billion.

Equinor’s executive vice president for Technology, Projects and Drilling, Anders Opedal, commented: “The transition in the energy sector in recent years has been tough for many, but essential to ensuring long-term activity. The suppliers deserve credit for the way they have responded. The current level of activity on the NCS would have been lower without the successful cost reductions achieved by the supplier industry. This has enabled us to sanction new projects in a challenging period. The result is more value creation and important ripple effect.”

Equinor and the license partners have sanctioned more than 20 large projects since 2016.

 

Optimism returns 

 

“We are pleased to see optimism return in the industry. What matters now, is sticking to and building on the right things. Of everything we do, safety is most important. A holistic approach to safety, from design, through development and into operations is central to succeeding with a continuous improvement of our safety performance,” said Opedal.

On Thursday, he participated in a dialogue meeting with Hans Christan Gabrielsen, head of the Norwegian Confederation of Trade Unions, Ole Erik Almlid, managing director of the Confederation of Norwegian Enterprise, Stein Lier-Hansen, managing director of the Federation of Norwegian Industries, Karl-Petter Løken, chief executive officer of Kværner, and other representatives of the supply industry. The meeting was held onboard the completed Johan Sverdrup accommodation platform at Kværner’s Stord yard.

The Johan Sverdrup field is scheduled to come on stream in November 2019. The analysis agency Agenda Kaupang estimates that the development can generate more than 150,000 man-years of employment in Norway in the period 2015–2025.

“Equinor has had record-high project activity over the last few years. Irrespective of size of each individual project, the quality is equally important. All contributors are important to achieve a successful result, be it local, national or international suppliers. We will work even closer with good suppliers to simplify, standardize and digitalize. This way we, together, can find win-win solutions and at the same time achieve a lower cost level,” said Opedal.

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