Norwegian innovators bring North Sea technology to the Gulf

More than a millennium after some of their Nordic ancestors ventured to North America in wooden longships seeking trade and treasure, Norwegians are working toward a second Viking Age in Houston.

Arriving this time by jet and armed with business plans, they hope to sell their innovations in deep-water technology, enhanced oil recovery and emergency response to the international market, and see Houston as the ideal gateway.

“In Norway, Houston is the place to be,” said Einer Gamman, a partner with Energy Ventures, a Norwegian-based venture capital firm focused on energy technology that opened a Houston office in 2007. “For many young companies, Houston is the first place they try to establish themselves outside of Norway.”

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Norwegian companies and their employees will be among the many international participants in the Offshore Technology Conference that starts today at Reliant Park.

The move of offshore drilling into ever-deeper waters, and the accompanying technical challenges, have been a boon to Norwegian technology companies. They have a reputation for innovation and attention to quality and safety, said John Hurter, an oil and gas advisor for INTSOK, a Houston-based industry consortium of Norwegian oil and gas partners.

Wonders such as oil and gas processors that can run in water miles deep and automated lifeboats are among the offerings these companies are working to bring to market in Houston.

Norway has fewer than 5 million inhabitants and the oil industry dominates its economy, making up more than 20 percent of its gross domestic product.

But as production from North Sea oil fields has declined over the last decade, the Norwegian government has pushed its technology as an alternative way to compete in the international market.

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That has drawn more than 10,000 Norwegians to Houston, Norway’s largest expatriate population, and more than 150 Norwegian oil and gas services and technology companies have storefronts in Houston.

The Norwegian government provides support for its entrepreneurs trying to break into the Houston market. Its consulate in Houston has a separate business division, Innovation Norway, that provides support including start-up funding and market research.

Newly arrived companies even can use an incubation office on the consulate premises, giving them an address while they work to get established.

Houston’s Norwegian consul general, Jostein Mykletun, said the companies have plenty to offer.

For example, Norwegians have engineered well enhancement technology not yet widely adopted in the U.S. market.

But it still can be a challenge for Norwegian companies to adapt to Houston’s business culture and get their technology adopted into energy projects.

“The oil and gas industry has become a lot more international, but it is still a very American business,” said Hans Wagner, president of ClampOn, a Norwegian company that has an office in Houston and specializes in deep-water ultrasonic technology. It won a 2010 Offshore Technology Conference award for its subsea corrosion-erosion monitor.

“I have never seen a culture that is so relationship based,” said Bjorn Abraham Bache, president of Jotun Paints, which dominates the maritime paint market worldwide but has struggled in the U.S. market. “In other countries, your technology and your protocol is the most important, but here you need to have the relationships. It is the country where relationships are by far the most important.”

In Norway, the oil company Statoil, 67 percent government-owned, encourages energy technology innovators to get their ideas tested and used in North Sea projects, said Karl Johnny Hersvik, senior vice president of research for Statoil.

“When we were working on the Norwegian continental shelf, a lot of the technologies were not available,” Hersvik said. “Being Statoil, we weren’t the biggest company but we had to be smarter. We found we were excellent at adopting faster and adjusting for that risk.”

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But it’s a long jump from the North Sea to the Gulf of Mexico, where operators often are leery of trying equipment with no track record in the Gulf.

“The American industry is quite conservative when it comes to new bells and whistles,” said Bjorn Akselsen, director of the consulate’s Innovation Norway. “If something has worked for the last 40 years, it is hard to persuade them to try something new.”

Norwegian engineers also have struggled with the idea of being salespeople.

“In Norway, they don’t have to sell, but here it is pretty much, ‘adapt or die’,” said Denise Patrick, senior vice president of Pierpont Communications and author of a study on Norwegian technology companies trying to establish themselves in Houston.

“Just because your guy at Shell in Norway says it is great doesn’t mean it is going to mean anything to Shell in Houston. Just because Statoil has approved your technology for use in the North Sea doesn’t mean that it is going to be adapted quickly in the U.S.”

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Part of this sales mentality means emphasizing cost savings the new technology will provide, preferably early in the sales pitch, said Asbjorn Kroken, vice president of marketing and sales at Cubility, which offers technology to reduce the fluids in drilling waste.

“When I go out, I typically have to bring up cost a lot earlier than I would do in the Norwegian market,” Kroken said. “Here you start with the cost and then the benefits and the features that the system will have. It is the other way around in Norway.”