Stavanger

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Impact of oil gas development on costal
communities in Norway.
-presentation on the economic growth and changes
in Stavanger after the oil gas industry was
established.
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Economical growth in Stavanger due to oil-related
development.
Presentation by Leif Måsvær, managing
director, Forus Businesspark (former mayor of
Stavanger.) Presentations held in British
Columbia, November, 2002
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Stavanger 1960

• City on the west coast of Norway.
• Traditional industry was shipbuilding and fishing
  and canning industry
• Farmers worked the rich soil, and still today the
  area is a major producer of food in Norway

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Tax Income

• Among the poorest cities in Norway in 1960

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• Fishing and canning industry were cut off
• Shipbuilding decreased

• High unemployment figures
• Depression and frustration
• Young people moved away to find jobs

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Fight for life

• Cried for help from the government
• Aluminium plants were established
  south and north of Stavanger
• This seemed like the only hope
• Despite all efforts and political argumentation,
  no plants came to Stavanger

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The change!
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A new industry!

• Phillips Petroleum found signs of oil gas in
  1969
• Politicians in Stavanger were in the forefront
  for localisation of the oil industry.
• Phillips chose Stavanger because of
• localisation and closeness to the activities
• the Stavanger politicians also invited them

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Two VERY important decisions

• The newstarted norwegian oilcompany STATOIL was
  situated in Stavanger

• Government situated
• the directorate for oil
• in Stavanger and
• not in Oslo, the capital.

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Because of Statoil, Phillips and the
oil-directorate, the other oil companies also
situated their headquarters in Stavanger.

• Shell
• British Petroleum
• Fina
• Amoco
• Conoco
• Esso
• Elf
• Total
• Agip
• And others

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The norwegian taxsystemfor municipalities

• Income tax is most important
• Property tax is less important
• Collected by the municipalities, not the state
• Main resource for the municipalities
• Company tax goes directly to the state
• All fees and taxes on the oil is collected by the
  state
• Money distribution system for municipalities with
  less incometax or few inhabitants

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New citizens

• Americans
• British
• French
• Netherlands
• Belgians
• Italians
• Many others

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Stavanger, an international city
Schools were built for all the foreigners who
worked here

• American school
• British school
• Dutch school
• French school

Primary schools in Stavanger today have education
in mother language for 52 different languages.
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Inhabitants in Stavanger 1960-2000
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• Relation between oilrelated activity and net
  moves to norway

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Other industries grew

• About 1100 new houses were built every year in
  the 70s and 80s.
• The same happened in neighbour communities,
  though in smaller scale
• Great need for living houses, office buildings,
  schools, infrastructure and so on.
• Local carpenters, construction companies,
  electricians, plumbers, painters and similar had
  good years

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A construction centre

• The construction of oilplatforms generated huge
  activity in all aspects of the region.

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A construction adventure

• When a shipyard estimated their need for workers
  to 1000, that created 3500 more jobs in other
  companies, together 4500 jobs.
• A huge array of small and medium sized companies
  grew up.
• The young people became highly educated in
  geology, chemistry, drilling techniques,
  transportation and logistics, and started to
  employ the oil industry in Norway.

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Forus Businesspark

• In 1969 there were 0 companies.
• Today we have 1 000 companies with 20 000
  employees.

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• Today there are approximately 60 000 jobs in the
  oil related industry.
• 30 000 of these are in the stavanger region

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Local Expertise

• Many of the oilworkers came from the fishing
  industry and from the shipbuilding industry
• They were used to working under the extreme
  conditions the North Sea became famous for.

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Transportation

• In 1978 more than 500.000 people were moved
  between land and offshore installations with
  helicopter.
• At the most there were 47 daily helicopter routes
  from Stavanger to Ekofisk

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Stavanger Airport

• High domestic and international traffic because
  of the oil-industry
• Direct flights to several cities in Europe (1994)
• To Oslo, our capital every 30 minutes on daytime
• To Bergen, every 30 minutes on daytime
• To London, 4 times a day
• To Paris, once a day
• To Amsterdam, 3 times a day

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Education

• Before the oil, few took university-level
  educations.
• Stavanger now has its own college for higher
  education, and will get university-status as of
  next year.
• Our research centre is one of the best in the
  world on certain skills, especially on drilling
  techniques and reservoar techniques.

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Conclusion

• The oil industry gave a tremendous push to the
  economical growth from 1970 up to now.
• We were one of the poorest cities in Norway, now
  we are one of the richest.

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Conclusion

• The oil industry helped us out of depression, and
  has given us an optimistic view on the future.
• It has pushed the businesses in Stavanger into an
  international setting, with new markets and
  partners, not just domesticly.
• It gave birth to a change of mind amongst the
  people of Stavanger. Mentality has been changed
  from a small fishingcommunity, to a pulsating
  city with strong, international relations.

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Conclusion

• more and more we see that the activity in
  business, trade and industry, are formed from a
  regional level, not the state. Some towns in the
  world will only go down and down. But some of the
  cities have a great future to come. You
  politicians from Stavanger have to find out what
  it is that gives economic growth, and find out
  why some cities in the world have a poor future.

- an OECD director to a delegation of Stavanger
politicians visting OECD
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