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Interview

with Terje Overvik, Managing Director, GDF Suez E&P Norge AS

05.06.2009 / Energyboardroom

Upon your departure from StatoilHydro, Helge Lund is quoted as saying that you had a very robust career at Statoil, and in recent years were one of the driving forces in the revitalization that took place on the NCS, having the ability to combine long-term strategic thinking with a focus on daily operations. With this glowing review from Mr Lund, you could have gone anywhere in the industry – what was it about GDF SUEZ E&P Norge that attracted you?

After working for Statoil for 23 years, I was not on the new team after the merger with Hydro, and that was fair enough; there were tough choices to be made. I could have continued to work at Statoil, but when these types of situations occur you have to ask yourself whether you want to continue. Having always worked for huge companies like Statoil, I realized that if I wanted to really influence a company, I should look for something smaller. I was really interested to see whether I could be part of building a new organization. GDF SUEZ, or Gaz de France, as it was called then, was established in Norway in 2001. I did some research on the company: they had been doing things in the right way, and they were on a steep growth curve. I was surprised that they had secured the operatorship on Gjøa, but this was based on my previous Statoil standpoint. After starting work at GDF SUEZ , I saw that they did have experience working as an operator; not from offshore Norway, but from the E&P business in Germany and the Netherlands, as well as pipeline operations throughout Europe. The company has a lot of experience when it comes to operations, so when awarded the Gjøa operatorship, it became an even more interesting company to work for: to build systems from scratch, and develop an organization by employing good people. They announced the position of Managing Director, and I decided I wanted that position. At GDF SUEZ E&P Norge, our goals are very clear: we have to be ready by next summer, to climb a steep curve and be ready.

From 2007 when you entered the company to the present, what have been some of those milestones or changes you have been tasked with implementing?

I was given this job in 2007. Early that year we were around 30 employees. At the end of 2007 we were 60; at the end of 2008 we were 110, and at the end of 2009 we hope to have 160.

GDF SUEZ E&P Norge was established in 2001 and bought Njord in the Norwegian Sea, which has been financing our activity in Norway since day one. Then in 2002 we bought Fram. At the time, both of those assets were oil-producing, but we believed they could be transformed to gas producers. We managed this by 2007, and now performance is above expectations. The company also bought into Snøhvit in 2001; it has proved to be a little troublesome but we understand now where the problems are, and after this final phase we will be producing above nameplate capacity. When I started, GDF SUEZ E&P Norge was producing around 5,000 barrels per day. Today, this figure stands at around 40,000.

The next interesting field is Gjøa, where we are cooperating with StatoilHydro and progressing well. The last job I did for Statoil was to go to the Ministry and hand over the PDO for Gjøa, and coincidentally it was one of the first projects I picked up at GDF SUEZ E&P Norge . I remember saying at Statoil that we had the same interests as GDF SUEZ E&P Norge on the project: we have to accept that they are the operator, and both have to deliver the project on time, on cost, and with high regularity. When I arrived at GDF SUEZ E&P Norge , I saw that the two companies worked very well together, and I’m very pleased about that, and the fact that GDF SUEZ E&P Norge owns 30% of the production at Gjøa. From 2011, we will produce 70,000 barrels a day – 60% gas and 40% oil – and that will make us one of the top ten producers on the NCS after 10 years. This shows me that the company really has potential, that there is a will to succeed, and that GDF SUEZ has a very long-term view on the NCS.

There has been a fairly steep ascent for GDF SUEZ in Norway. You mentioned before that the company has expertise all over the world, but not in offshore gas. Being such a large company, to what degree is GDF SUEZ E&P Norge autonomous in defining strategy?

Gaz de France and Suez merged last summer, and the desire to commit to E&P was confirmed at that time: we came up with a long-term growth strategy regarding E&P, to make it part of the new company’s outlook. GDF SUEZ E&P Norge is part of a huge company, Europe’s third largest, of which E&P is not a large part, but in terms of contributions, it’s a huge part. Germany, the Netherlands and the UK are the main contributors to GDF SUEZ’s production. We operate predominantly as a land-based company, but GDF SUEZ E&P Norge is a part of it, and I have all the freedom I want within the framework we have decided.

Of course, this framework must be viewed within the larger country framework, in which access to acreage is one of the most pressing issues at the moment, particularly with the large foreign utilities. What is your perspective?

Access to acreage is very important, and so far GDF SUEZ E&P Norge has more or less got what they applied for. The company has a strategy to take on only as many obligations as we can manage, and prefers to deliver on its promises. We have acreage in the North Sea around the Gjøa area, with one operatorship, representing a very important area to us now and in the future. The company also has an operatorship in the Njord area, and will be drilling an exploration well there this summer.

Another GDF SUEZ E&P Norge strategy is to acquire acreage in the Vøring area, having bought 10% of a license operated by Shell currently being drilled. I’m very excited about that prospect and am hopeful for its success. Very early on, GDF SUEZ E&P Norge decided to be a part of the Barents Sea area, and participates in the Snøhvit field and other licenses in the region with the same partners. This 20th licensing round has seen GDF SUEZ E&P Norge secure its priority license up in the Barents, signifying a milestone first operatorship in the Barents Sea. Everyone agrees that there are good prospects up there, and hopefully the area will be opened up further; we hope it will not be permanently off-limits for oil and gas activities as some political parties are working towards. In Norway, there is a time lag of 20 years for gas, and perhaps 10 for oil, between access to acreage and production. This means that we are looking at production starting in 2020 or 2030, and given the decline of the Norwegian industry, we are in a bit of a hurry to keep the activity and competences in the country. My argument is that the industry can effectively cope with the applicable regulations and restrictions, and have been proving this on the NCS for many years now.

Over the last few years, there has been an unprecedented demand for human resources. You were speaking to the quite impressive trajectory at GDF SUEZ E&P Norge – how are you keeping GDF SUEZ E&P Norge as an attractive place to work, and what is the company’s reputation within the Norwegian industry?

That is a hard question to answer, but last year we won a prize for being the best oil and gas company in Norway. A questionnaire was sent to people who had experience within the industry, and they were asked which company they would prefer to work for. GDF SUEZ E&P Norge came out at the top of this poll, and although it’s hard to pinpoint the exact reason, the company has been present as a prudent gas buyer in Norway since the Troll treaty, and has proven we will remain for the long-term. I think prudent is the operative word here. When GDF SUEZ E&P Norge was established, we made some brave moves, and the company very steeply built up its production curve. We also earned the operatorship on Gjøa, and that is very attractive. Consequently, GDF SUEZ E&P Norge has recruited people with experiences from Statoil, Shell, BP, Exxon – all the big players – and if you ask those people why they want to work for a smaller company, they will say because it’s smaller, they have more influence, and there’s a more entrepreneurial culture within a small company.

There’s the outward reputation, and then what actually happens within a company. How would you define your personal management style and philosophy?

I’m informal; I invite people to speak out. It’s never a problem for employees to come into my office and say what they mean, and even yell at me if necessary! I promise that I will listen, and although I will not always do what they want me to, I will always make a decision. Decision-making is key: if you are unable to make decisions then you should not be a manager. All decisions are taken under risk, and you can always fix problems that arise; as a manager you should not be afraid of the unknown. I was well-trained in making decisions, as an offshore installation manager. Loyalty is also key: if I make a decision, I expect people to respect and follow it. I dislike negativity, and as such encourage my staff not to just complain, but to come up with solutions when things don’t go the way they want. The last part of it is teamwork. Our bonus scheme is based on the performance of the whole organization: this encourages a ‘one for all’ attitude.

One direction you are clearly headed towards is mid-2010 – from now until then, what are your top priorities to get that development up and running?

GDF SUEZ E&P Norge has now got most of the people and the competencies, so it is just a matter of training our employees on the systems. All the ICT systems should be up and running, and that’s within reach. There is also very hard work being done on what is called GDF SUEZ E&P Norge’s culture programme, based on HSE performance. We really want to train the whole organization, and we are using Trondheim University to coach us in this process of creating our own identity. Creating a culture, educating people, and establishing the systems and processes are the key tasks going forward.

GDF SUEZ E&P Norge’s operation at Gjøa will be the most advanced on the NCS, and we believe that all fields developed on the NCS should be at the forefront. We are achieving this aim through the concept of integrated operations. Thanks to new technology, the company can have people collaborating from many different locations: in the office, at the installations, and at the operational base in Florø, north of Bergen. All the collaboration rooms have already been invested in, as has data sourcing from the platform and data management systems, so everyone can sit at their computers and see the same thing. We are now working hard to establish the work processes, to have data in realtime. Hopefully this will be a very efficient and safe way of operating Gjøa, and the ambitions are quite high in this regard.

Looking towards the next 5-10 years, what are your ambitions for GDF SUEZ E&P Norge and where do you want to bring the company in that time?

The ambition is to increase our resource base, because we will reach a plateau of 70,000 bpd day in 2011, and we have some 5 years at that plateau. If we do nothing during this time, we will enter into a decline. Our ambition is to avoid that decline, and still have sufficient activities to grow our business to a higher level. GDF SUEZ E&P Norge will do that by getting the most out of the fields in which we are already involved, as well as exploring and making discoveries. The company has built up a team of 15 exploration experts; we have close to 20 licenses, and 3 operatorships within exploration. On top of this, if there are good acquisitions to be made, we will make them. We are working on these three legs to create a future for GDF SUEZ E&P Norge. I’m spending a lot of my time trying to create new business towards 2020, even if by that time I’ll be watching the company grow from my rocking chair.

As a final message to Oil and Gas Financial Journal Readers about the prospects for GDF SUEZ E&P Norge, what would you like them to know about your operations here in Norway?

GDF SUEZ E&P Norge has proven we have the will to succeed, and are here for the long-term backed by a solid company, that is able to seize opportunities if they are attractive enough. My ambition is that GDF SUEZ E&P Norge will remain a growing company, and a great place for people to work.

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