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Interview

with Bernt Haave, Managing Director, Oiltools AS

28.03.2013 / Energyboardroom

Would you start by outlining for our readers the scope of Oiltools’ business in waste management systems on the NCS?

We provide total solutions for drilling waste management both offshore and onshore. As a small Norwegian technology company, we provide tailor-made solutions for different types of rigs. Depending on the geographic location of the drilling, our drilling waste management system will be different. For instance, in the Barents Sea the drilling is done mostly on clay, whereas in the south of Norway it would be mostly sand. In order to compete with large companies which have to provide complete packages, we adapt our offer to provide different solutions for every rig and drilling operation taking place.

The NCS is globally recognized as the cleanest basin for oil & gas production. In your view, how well set up is the regulatory environment and incentive models for companies to take wastewater management seriously?

Since 1992, safety measures on the NCS have not been modified and the Oil Spill Prevention and Response Act (OSPRA) has not been updated. Other countries such as Brazil and Malaysia among others actually have stricter regulations than Norway. Hence, companies like Statoil and ENI have developed their own internal rules, as regulators have not updated regulations for such a long time. The main issue lies in the fact that in 1985, the regulations were based on the available technology at that time.

With our technology today, cleaning oily water has shifted from 30 PPM to only two PPM. Our equipment has been sold or rented to the new COSL and Odfjell rigs among many others. Some of rigs are allowed to use oily water in-line monitors. However, as such rigs cannot monitor base oil; we feel the need for an adjustment between our current technological capabilities and official NCS regulations. It is my strong wish that Norwegian authorities adjust the regulations to align them with the technology available today, as we do not currently see any incentives from these regulations.

What role do you see civil society playing on shaping the regulatory environment?

Of course, pressure is at all times on the government. The industry cannot afford any disasters, especially in the current movement to the North. Even though most companies believe that high regulations imply costs the industry cannot bear, I think that in the long term these strict regulations would be beneficial and help us save money. The answer lies in our ability to create even more advanced technologies.

The Norwegian oil industry is among the cleanest in the world. We even collect and clean rain water. It is indispensable to maintain our industry and reputation as it is today and the civil society plays an important role in maintaining the pressure that is needed for companies to maintain safe operations.

Major oil & gas companies like Shell and BP increasingly see wastewater management as part of their operational model. How are the responsibilities for waste water management being shared in Norway?

We have done different drilling waste management projects, for which we have relied on our advanced processing facility located in Sandnesjøen. This environmental treatment facility is today the most northern processing facility in Norway. We are collaborating closely with the industry to develop the technology needed. In fact we are working on new development systems for the upcoming drilling programs.

In terms of responsibility in wastewater management, the operator is responsible for taking the final decision, but we see many examples of operators leaving that decision to drilling contractors. In Norway, operators entirely bear the risk, whereas in other countries like Brazil, the risk is shared between the operator and the contractor.

Both operators and drilling contractors are our customers. Even competitors like Halliburton are our customers and we find value in working with them.

Your technology is generally most demanded in mature regions. How do you see your technology make a difference in sensitive areas like the Barents Sea?

We were responsible for the first zero discharge operations in the Barents Sea. We collaborated with Statoil, ENI, and Norsk Hydro to have each well drilled with water-based drilling fluids.

Recently, operators have been allowed to dump water-based cuttings, and therefore we knew there was a need for our green technology. As most of our technology was developed for the Barents Sea, we prioritized the cleanest water treatment equipment. Today, our technology has evolved to a point where we can clean water without using filters or chemicals. With these filters, which represent waste, water could be cleaned at 20 to 15 PPM. With our filter-free technology we can go down to two or three PPM. By using RENA technology, our oily waste management partner and developer of a unique membrane system, we are the only company in the world to provide such clean and efficient water treatment.

All of our technology is built here in Norway and engineered by us and partners like Rena Technology. The experience we gain in Norway is crucial for our technological developments.

Given that the Barents Sea is a politically and environmentally sensitive matter, what impact do you see this technology have on this movement to the North?

Our technology today is sufficient to provide the cleanest drilling operations possible in the Barents Sea. As drilling companies have even stricter internal rules than the ones demanded by the authorities, our technology aligns perfectly with the company’s requirements.

The industry is on the same path as we are— ensuring safe conditions at all times. I do not see any environmental impact from drilling in the Barents Sea. The only flaw happened in some years ago and only concerned a minor hydraulic oil leakage. In the end, our technology can only have a positive impact in drilling these areas.

What is the major challenge for you in taking the business forward over the coming years?

Frame contracts represented our biggest challenge. This has changed now as we have been invited to bid for Statoil’s and other major companies’ contracts. Even though the last bids have been difficult, we are seeing small innovation companies reaching out to meet the demands of large operators.

Overall, we feel that our technology is giving us the value needed to be the preferred customer for large operators.

What would be your five year perspective?

We wish to grow the company slowly and steadily. We are developing some technology projects in our attempt to be a leading company in new waste management systems and innovation. By combining our in-house capabilities with other leading technology companies such as RENA and others, new drill waste management technologies will appear.

You have been working for this company for the past 13 years. What was your motivation to join the waste management business?

Waste management saves both the environment and money. My previous experiences, along with the challenge to create something new have inspired me to develop these new technologies, which did not exist before. I consider myself as an entrepreneur that fancies innovation on a daily basis, and Oiltools gives me that opportunity.
Oiltools will continue to be a leading innovation company for drilling waste management and as new technologies are under development, I always feel we can contribute. If large oil companies support more smaller innovation companies, we will see new waste management systems appear. Therefore, I am urging the industry to be more creative and less conservative, as new technologies will benefit us all.

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