1. GRA 6829 Strategy for Industrial Competitiveness 2010 The cluster characteristics and competitiveness of the Norwegian FPSO industry - Competitive for the future? TorleivOpsal Nicolai A. Kirkeng 1

2. Introduction Cluster and national competitiveness Recommendations What is an FPSO The emergence and current position of the industry Agenda GRA 6829 Strategy for Industrial Competitiveness 2010 | Nicolai A. Kirkeng & TorleivOpsal Introduction What is an FPSO The emergence and current position of the industry Cluster and national competitiveness National diamond analysis Challenges for the cluster Recommendations For the industry For the government 2 2

3. Introduction Cluster and national competitiveness Recommendations What is an FPSO The emergence and current position of the industry What is an FPSOFloating Production, Storage and Offloading unit GRA 6829 Strategy for Industrial Competitiveness 2010 | Nicolai A. Kirkeng & TorleivOpsal 3 Turret and fluid/control transfer swivel Process and utilities e.g. separation train, gas compression, power generation Accommodation, central control and helideck Hull & marine utilities e.g. cargo, ballast,boilers, propulsion Moorings and risers 3

4. Introduction Cluster and national competitiveness Recommendations What is an FPSO The emergence and current position of the industry In the intersection of shipping and offshore Emerged from two traditionally strong industries Unique international position 10 of 28 international actors are Norwegian No other country has similar agglomeration More national than regional agglomeration 4 GRA 6829 Strategy for Industrial Competitiveness 2010 | Nicolai A. Kirkeng & TorleivOpsal 4

7. Ship owners

10. Ship Equipment5 GRA 6829 Strategy for Industrial Competitiveness 2010 | Nicolai A. Kirkeng & TorleivOpsal

11. Introduction Cluster and national competitiveness Recommendations National diamond analysis Challenges for the cluster The national diamond Firm strategy, structure and rivalry Factor conditions Demand conditions Related and supporting industries 6 GRA 6829 Strategy for Industrial Competitiveness 2010 | Nicolai A. Kirkeng & TorleivOpsal

13. Available capital

14. Marintek and NODE Related and supporting industries 7 GRA 6829 Strategy for Industrial Competitiveness 2010 | Nicolai A. Kirkeng & TorleivOpsal

16. Available capital

17. Marintek and NODE

18. Global demand

19. Demanding conditions

20. Strict regulatory frameworkRelated and supporting industries 8 GRA 6829 Strategy for Industrial Competitiveness 2010 | Nicolai A. Kirkeng & TorleivOpsal

22. Available capital

23. Marintek and NODE

24. Global demand

25. Demanding conditions

27. Shipping

28. Offshore

29. Ship equipment9 GRA 6829 Strategy for Industrial Competitiveness 2010 | Nicolai A. Kirkeng & TorleivOpsal

31. High rivalry

33. Available capital

34. Marintek and NODE

35. Global demand

36. Demanding conditions

38. Shipping

39. Offshore

40. Ship equipment10 GRA 6829 Strategy for Industrial Competitiveness 2010 | Nicolai A. Kirkeng & TorleivOpsal

42. High rivalry

44. Available capital

45. Marintek and NODE

46. Global demand

47. Demanding conditions

49. Shipping

50. Offshore

51. Ship equipmentGovernment 11 GRA 6829 Strategy for Industrial Competitiveness 2010 | Nicolai A. Kirkeng & TorleivOpsal

53. Pressured margins

54. Low profitability

55. High cost labor

56. Focus on knowledge intensive and core activities

57. Qualified engineers

58. Workers with operational experience12 GRA 6829 Strategy for Industrial Competitiveness 2010 | Nicolai A. Kirkeng & TorleivOpsal

60. Pressured margins

61. Low profitability

62. High cost labor

63. Focus on knowledge intensive and core activities

64. Qualified engineers

65. Workers with operational experience13 GRA 6829 Strategy for Industrial Competitiveness 2010 | Nicolai A. Kirkeng & TorleivOpsal

67. Pressured margins

68. Low profitability

69. High cost labor

70. Focus on knowledge intensive and core activities

71. Qualified engineers

72. Workers with operational experience14 GRA 6829 Strategy for Industrial Competitiveness 2010 | Nicolai A. Kirkeng & TorleivOpsal

74. FPSOs not included in NIS tax beneifts

75. No recent major oil findings

76. Restrictions Lofoten and Vesterålen

77. Activity push innovation and new technology15 GRA 6829 Strategy for Industrial Competitiveness 2010 | Nicolai A. Kirkeng & TorleivOpsal

78. Introduction Cluster and national competitiveness Recommendations For the industry For the government Industry recommendations A strengthened and competitive Norwegian FPSO cluster – With a bright future Challenges Lack of competitive size Keeping key activities Future access to labor Political instability Decreased activity in the home market 16 GRA 6829 Strategy for Industrial Competitiveness 2010 | Nicolai A. Kirkeng & TorleivOpsal

80. Increased bargaining power

82. Address common issues

83. Cooperate with government, universities and industry actorsPolitical instability Decreased activity in the home market 17 GRA 6829 Strategy for Industrial Competitiveness 2010 | Nicolai A. Kirkeng & TorleivOpsal

87. Joint effort from the government, industry and universitiesDecreased activity in the home market 18 GRA 6829 Strategy for Industrial Competitiveness 2010 | Nicolai A. Kirkeng & TorleivOpsal

88. Introduction Cluster and national competitiveness Recommendations For the industry For the government Conclusion 19 GRA 6829 Strategy for Industrial Competitiveness 2010 | Nicolai A. Kirkeng & TorleivOpsal 19

89. Introduction Cluster and national competitiveness Recommendations For the industry For the government GRA 6829 Strategy for Industrial Competitiveness 2010 | Nicolai A. Kirkeng & TorleivOpsal 20 Conclusion By implementing the suggested recommendations the FPSO cluster might develop into a stronger FPSO hub for the future and prove to be an important industry in the exciting intersection of the oil & gas, offshore and shipping industry. 20

90. Thanks for your attention!Q&A