If you thought Sweden’s IKEA and Denmark’s Legos were clever, just wait to see what their Norwegian neighbor has to offer in oil technology.
Norway is encouraging Houston companies to use its technology by offering attractive financing for its equipment, speakers said during the third Norwegian Finance Day held Wednesday at the Federal Reserve Bank in Houston.
“Houston is a global hub for international partners and opens up channels for markets all over the world,” said John Hurter, an oil and gas advisor for INTSOK, an organization that represents Norwegian energy industry abroad. “It is also a prime spot to serve the onshore markets.”
The discovery of oil has transformed the Norwegian economy in the last 40 years, encouraging its development as one of the leading international equipment suppliers for the oil and gas industry.
Read more: Texas oil production surpasses Norway
While the economic downturn hit the credit markets hard, the Norwegian government has worked to protect the industry.
“The financial crisis could have put a setback on the industry in Norway,” Roth said. “The financing was critical for rig companies and operators in making investment decisions when the financial crisis hit, because we could provide the financing. There was not such a big drop as would otherwise have been the case.”
The Norwegian government established Export Credit Norway, an export bank that is financed by the government and designed to ensure that Norwegian technology remains competitive and available to interested buyers.
“We see a need to make sure that there is a level playing field for the industry,” said Jarla Roth, president and CEO of Export Credit Norway, explaining that the facility can provide 80 percent of the financing for a project, typically with rates that are at about three percent or lower.
Norway export financing is projected to increase from about $2 billion in 2006 to $5 billion by 2016, illustrating that Norway is benefiting from worldwide growth in the oil industry and that its export financing has played an important role.
While the credit helps sell technology made in Norway, many companies using the financing are headquartered in Houston: Cameron, FMC Technology and National Oilwell Varco. Norwegian financing may make a deal easier than if a U.S. bank were used, explained Kelton Glasscock, senior vice president and head of Energy Americas for Norwegian-based DNB Bank. DNB Bank works with Export Credit to structure deals and finance the remaining portion of loans.
“Let’s say the equipment is coming out of Norway and going to Brazil, it might not make sense to involve U.S. financing,” Glasscock said. “Or there could be tax reasons why you would want to do the financing out of Brazil or some other place.”