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Player evaluation and prequalification in an HSE perspective

The Petroleum Safety Authority Norway (PSA) assesses the HSE competence and capacity of all companies that wish to enter the Norwegian shelf. These evaluations are used both for prequalification of new players and in license awards.

The desire to bring new, competent players on to the Norwegian shelf was expressed in Storting White Paper No. 39 (1999-2000).

The goal is for such companies to contribute to increased value creation, in that they may have special expertise and an interest in exploiting the resources in smaller fields so that they can safeguard tail production to a greater degree than the larger companies.

It is a stated requirement that new players must be able to document that they can contribute to increased value creation through their competence, both as regards resource management and HSE.

In order to ensure predictability and security for new players that wish to enter the Norwegian shelf, a system for prequalification of licensees and operators was developed in the spring of 2000. In this process, companies that wish to do business here are evaluated on the basis of factors such as their competence in petroleum disciplines, their organization, their financial strength and HSE competence.

As regards HSE, the PSA evaluates whether new players possess the necessary competence and capacity to accommodate the HSE requirements stipulated in the regulations. All HSE regulations apply to both operators and licensees. However, the requirements for licensees as regards resources and competence are somewhat more limited than for operators. Licensees must:

Cooperation between agencies and ministries
The system of prequalification and player evaluation is formally a product of the Ministry of Petroleum and Energy. These processes start when a company sends an inquiry to the MPE.

Earlier, the Norwegian Petroleum Directorate was asked to evaluate the companies' competence and capacity in both HSE and resource disciplines. After the Norwegian Petroleum Directorate was split and the Petroleum Safety Authority Norway established as of 1 January 2004, the agencies have independent roles and tasks in connection with player evaluations.

The PSA and the NPD plan a joint process with joint meetings and visits to the companies being evaluated. This saves resources, both for the authorities and, not least, for the companies themselves.

The two agencies prepare independent reports which are submitted to two separate ministries (the NPD reports to the MPE and the PSA reports to the Ministry of Labour (AD) - with copies to the other agency to ensure full transparency in the process. After receiving the evaluations from the NPD and the AD, the MPE is ultimately responsible for coordinating the final decisions by the ministries.

Concrete evaluations
Companies that are prequalified are given the opportunity to do business on the Norwegian shelf, however, how and to what extent is evaluated specifically in relation to transfer of participating interests, ordinary licensing rounds and TFOs.

In these rounds, the companies apply for production licenses for announced acreage. In this process, the PSA is assigned the task of assessing the applicants' competence and capacity as regards HSE in relation to the specific production license sought.

The factors assessed include whether the company is qualified as a licensee or operator for the production license it has applied for. In addition, the composition of each production license is evaluated, so that licensees with varying experience and competence can supplement and strengthen each other.

The assessments of the Petroleum Safety Authority Norway culminate in a recommendation that is sent to the Ministry of Labour, which processes the recommendation and sends it on to the MPE for final decision.

In addition to the licensing rounds, new players can enter the market through purchase and sale of interests and/or through the purchase of another company. Such cases also require player evaluation, with the same procedure and requirements described above.

Contact in the PSA:
Inger Anda, press spokesperson
E-mail: inger.anda@ptil.no