#01 2005

Demand surgesfor Ice Class

Also inside:> BP’s Holstein: The world’s largest truss spar

> Balancing construction boom with safety> On site in Banda Aceh

DNV Forum

01 Editorial: Managing cold-climate risks

02 Continued growth in Korea

04 To Russia with love

06 Demand surges for Ice Class

08 Explotions lead to new pipeline standards

10 BP pioneers deepwater production in the Gulf

12 International shipping lacks leadership

14 No quick fixes?

18 Morten Arntzen: Has 100 ships – wants a model

21 Neighbours protest – US embassy relocation

22 News

24 “A common basis for trust is crucial”

26 Balancing construction boom with safety

28 On site in Banda Aceh

31 The difference between life and death

32 Exactly how much more efficient?

34 Angola: A better environment for the new generation

36 Last word: Why aren’t pilots held responsible?

content

02 08 12 28

Euphoria has broken out in the ice class

market, underpinned by the booming

Russian oil industry, environmental con-

cerns and red-hot tanker rates.

On the back of these positive influences,

market analysts have predicted that the ice

class fleet could grow to 14 million dwt by

2008. Nobody doubts that the demand will

continue on an upward path, but the ques-

tion is just how steep will the path be?

Our special feature starting on page 4 in

this issue of DNV Forum offers some in-

sight from a leading broker and researcher

in this exciting new field.

As we see it, Russian exports are expect-

ed to remain concentrated on ports in

three areas – the north Baltic, the Russian

Arctic and the far eastern areas of Russia.

The high infrastructure costs involved in

developing exports from the northern

parts of Russia seem to indicate a large

scale operation, and exploitation of

Russia’s large oil reserves will undoubtedly

mean the use of many high-spec ice class

tankers.

With Norway straddling the Arctic

Circle, it is hardly surprising that DNV has

been involved in cold-climate shipping for

quite some time. We offer a number of

class notations corresponding to different

functional needs when operating in cold

climates or ice-infested waters. As the

major class society for tankers with ice

strengthening, and with almost 1,800

classed vessels of different types prepared

for operation in cold climate, DNV has

gained many years of valuable experience

for developing rules covering different

operational needs.

In our continuing efforts to serve and

support the industry, we endeavour to

make shipowners, operators and their

crews aware of the challenges of operating

in cold climates and icy conditions. Also,

DNV is prepared to support and be a dis-

cussion partner for owners, yards and

authorities in the further development

of shipping activities in cold climates.

Such communication becomes increas-

ingly important when one realises that one

third of all DNV-classed tankers currently

on order are specified with ice strengthen-

ing and this proportion seems to be

increasing.

1DNV Forum #01 2005

Managing cold-climate risks

MIKLOS KONKOLY-THEGE

President and Chief Executive Officer

This is the way the new chairman of Korea

Shipbuilders’ Association, KOSHIPA, Jing

Wan Kim predicts the future for the

Korean shipbuilders.

KOSHIPA is a non-profit organisation to

promote the common interests of its mem-

ber shipyards. Mr J. W. Kim continues:

“The world’s largest shipbuilders’ order

books are full for approximately three

years. The figures as at the end of 2004 are

up almost 30 per cent in terms of cgt com-

pared with a year earlier and are expected

to increase even more in the years to

come, especially when it comes to techni-

cally advanced ships.

“In terms of value, the share of techni-

cally advanced ships such as LNG ships

and large container ships built at Korean

2

Continued growthin Korea

“Korean shipbuilders will continue to receive new orders, but selectively. Within the next

ten years, Korean shipbuilders’ share of the world shipbuilding market is expected to

reach 40 per cent.” TEXT > PER WIGGO RICHARDSEN PHOTO > NINA E. RANGØY

DNV Forum #01 2005

shipyards is expected to increase the most.

These ship types are also expected to rise

to 40 per cent in 2015 from about 20 per

cent in 2004.”

A LEADING ROLE. The Chairman of

KOSHIPA, Mr J. W. Kim is president and

CEO of Samsung Heavy Industries. He

joined the Samsung group 32 years ago,

and has been instrumental in developing

this industrial giant. As chairman of

KOSHIPA, he intends to promote inter-

national cooperation to ensure a sound

development of the world shipbuilding

industry. Mr J. W. Kim says:

“From now on, I want to strive to

improve Korea’s shipbuilding industries

and motivate Korean shipbuilders to co-

operate on common interests.”

KOSHIPA works for the common benefit

of all its member companies. Each mem-

ber company, as per its management deci-

sion, is ready to invest in, or collaborate

with, shipyards outside Korea, both in Asia

and outside Asia.

“In the era of globalisation,” explains

Mr J. W. Kim, “there are common issues,

such as the environment and safety, that

the world shipbuilding industry as a whole

should address urgently and in a coopera-

tive fashion for the benefit of the industry,

clients, and all those that depend on effi-

cient, safe, and environment-friendly ship-

ping. Korean shipbuilders are prepared to

assume a leading role and greater respon-

sibility in the shipbuilding industry in

order to ensure global cooperation.”

HIGHER VALUE ORDERS. Korean ship-

builders have greater mass production

capacities than their competitors. This has

provided, and can still provide, cost effi-

ciencies relating to design, technical and

production processes. Along with their

large facilities for building very large crude

carriers, they have the competitive advan-

tages for building other large ship types

such as LNG carriers and container carriers.

Predicting the development of new ship

types, new designs, and where the Korean

shipyards are expected to have their main

focus in the future, the chairman of

KOSHIPA says:

“The Korean yards are targeting techni-

cally advanced ships such as large contain-

er ships and LNG carriers. In that regard,

Korean shipbuilders would like to increas-

ingly attain higher-value orders such as

those for up to 12,000 TEU container ships

and more than 200,000 m3 LNG carriers.”

COMMON STRUCTURAL RULES. But even if

the sky at present and for the near future

looks blue, there are some clouds threat-

ening the industry. Key issues for Korean

shipbuilders are to tackle steel shortages

and the rising cost of steel, and also the

appreciation of the Korean won against

the US dollar, which affects the price com-

petitiveness of their products.

“We are all aware of the negative impact

that the soaring steel-plate prices and fluc-

tuating exchange rates have had on ship-

yard profitability. As a result, some Korean

shipyards have achieved lower 2004 operat-

ing incomes or made an operating loss,

even though their revenues have increased

during the year.”

As co-chairman of the Korean-Norwegian

Economy Co-operation Committee since

2001, Mr J. W. Kim has been closely associ-

ated with DNV for a long time. With

regard to the issue of common structural

rules for class societies, which DNV has

been involved in developing, he does not

want to predict whether the future will be

rosy or grey. There are still some unan-

swered concerns raised by the Korean ship-

yards. Mr J. W. Kim says:

“The Korean shipbuilders have reviewed

the rules. We have found that the increase

in hull structural weight for the investigat-

ed tankers due to the increased scantling

is between eight and eleven per cent.”

He adds: “Korean shipbuilders cordially

hope the International Association of Class

Societies will consider crucial items for the

mutual benefit of all its members,” listing

aspects that from their point of view are

important:

> Involvement with the IMO Goal-Based

Standard

> Harmonisation of the tanker and

bulk-carrier initiatives

> Transparency of the rule requirements

> Clear verification of scantling increase

> Proper time for the industry to

comment and review drafts.

3

JING WAN KIM, president and CEO of

Samsung Heavy Industries since 1998 and

chairman of KOSHIPA, states that Korean

shipbuilders are prepared to assume

a leading role and take even greater

responsibility in the shipbuilding industry

in order to ensure global cooperation.

At the end of 2004, Korean shipyards’ order books were higher than ever before,

33.4 million compensated gross tons, totalling 918 ships.

DNV Forum #01 2005

Photo

: Sam

sung

4 DNV Forum #01 2005

To Russia with loveThe world fleet of ice-strengthened ships continues to grow at a phenomenal pace.

The avalanche of recent orders has been triggered by the booming Russian oil industry

and red-hot tanker rates. Analysts predict that the trend will continue, with levels of

investment in ice class tankers expected to reach new heights over the coming decade.

TEXT > STUART BREWER PHOTO > PÄR-HENRIK SJÖSTRÖM/SCANDINAVIAN SHIPPING GAZETTE

5DNV Forum #01 2005

Speaking at a recent seminar in London,

Stephen Gordon of Clarkson Research

said the world fleet of ice-strengthened

ships continues to grow at a phenomenal

pace. In the last year, USD 4.5 billion has

been invested in ice class newbuildings,

mostly for high-specification, class-1A

equivalent tonnage.

In his address, Gordon predicted that

increasing production from former Soviet

Union states would drive levels of invest-

ment in ice class tankers over the coming

decade. “High demand, coupled with a

rule-driven accelerated phasing out of

older single hull ships, pointed to the 1A

ice class fleet growing to 14m dwt by

2008,” he said.

Clarkson Research studies have identi-

fied 262 Ice Class 1A ships as operational

today, equivalent to 4.2m dwt, with 70–80

per cent of them under 20,000dwt. “Our

survey reveals that there are 234 vessels

with ice strengthening on order. Some 165

are ice class 1A and three are ice class 1A

Super,” said Gordon.

SHUTTLE-TANKER NETWORK. Gordon also

went into detail on Russian export fore-

casts, as well as maximum winter-ice thick-

ness and ice class requirements for differ-

ent areas. “There is a debate about how to

develop the crude oil network in the

Arctic,” he said. “The most likely

development looks to shuttle through

Murmansk.”

DNV Forum met with Dr Igor V.

Stepanov, leading research scientist at the

Arctic and Antarctic Research Institute

(AARI), to hear his views covering the

design and operational challenges faced

by large vessels in Russian cold-climate

operations.

“Based on general commercial consider-

ations, bigger vessels are considered more

competitive for a number of new ship-

borne transportations,” he said, but

warned “there is however little experience

of such vessels in ice-infested waters.” Dr

Stepanov emphasised that the technical

challenges can be overcome and that full-

scale trials are the most reliable basis for

the development of procedures for assess-

ment of ice performance and ice loads for

large vessels.

FULL-SCALE TRIALS. Explaining the back-

ground of the full-scale trials, Dr Stepanov

said the Tanker Ice Trial offshore Sakhalin

project, sponsored by ExxonMobil and

Sakhalin Energy Investment Company,

started in February 2002. The work was car-

ried out by AARI, as the principal contrac-

tor, jointly with the Central Marine Design

“Bigger vessels are considered more competitive for a

number of new shipborne transportations,” says Dr Igor

V. Stepanov, leading research scientist at the Arctic and

Antarctic Research Institute.

“Managing cold-climate risks is increasingly important

both for tankers and other commercial vessels,” says

Wilhelm Magelssen, head of DNV Maritime’s business

and marketing department.

Fuelled in part by the Russian oil boom, demand is soaring for ice class tankers,

resulting in a USD 4.5 billion investment in high-spec vessels.

Demand surges for Ice Class

6

and Research Institute (Russia) and the

Science and Technology Corp (USA).

The ships were 106,000 dwt tanker

Primorye, with DNV Ice Class 1C, owned by

Frisco, and two icebreakers, Krasin and

Magadan, operated by Fesco. “Primorye was

extensively instrumented; huge amounts

of ice-performance and ice-load data have

been obtained, and their subsequent

analysis allowed introducing appropriate

adjustments to ice-performance and ice-

loads models to make them applicable

to large tankers and LNG carriers,” he

explained.

In addition to technical aspects, Dr

Stepanov touched upon oil reserves on

the Russian Shelf. “Due to the ever more

active development of oil and gas deposits

on the Russian Shelf, such as Piltun-

Astokskoye, Lunskoye and Shtokman-

ovskoye, Russian authorities are develop-

ing requirements for oil and gas deposit

facilities. Already in place are require-

ments for the classification of marine

cargo terminals and marine floating oil

reservoirs,” he said.

ADDITIONAL CLASS NOTATIONS. Wilhelm

Magelssen, head of DNV Maritime’s busi-

ness and marketing department, also

shared his views on ‘winterisation’ aspects

of operating in cold climates.

“With the opening up of new arctic trade

routes that encompass cold climates and

heavier weather than before, we predict

that ships in the future will most likely be

specified with additional class notations

to minimise risks and the environmental

impact of shipping.”

DNV has several notations which focus

on planning and preparation for different

functional needs. Ongoing development

takes into account additional risks such as

how to ensure sufficient firefighting capa-

bility in extreme temperatures, and how

to cope with new propulsion alternatives

in a robust, safe and reliable manner.

Magelssen emphasised: “We must make

shipowners and crew recognise the chal-

lenges of operating in cold climates and

icy conditions. DNV is prepared to support

and be a discussion partner for owners,

yards and authorities in the further devel-

opment of shipping activities in cold cli-

mates.”

Such communication becomes increas-

ingly important when one realises that

one third of all DNV-classed tankers

currently on order are specified with ice

strengthening, and that this proportion

seems to be increasing.

With Norway straddling the Arctic Circle, it is no wonder that DNV has been involved in cold-climate shipping for quite some time. The class society

offers a number of class notations corresponding to different functional needs when operating in cold climates or ice-infested waters. As the major

class society for tankers with ice strengthening, and with almost 1,800 classed vessels of different types prepared for operation in cold climates, DNV

has gained many years of valuable experience for developing rules covering different operational needs:

> Rules for soft ice

> Baltic rules, assuming support from icebreakers

> Arctic rules for more independent operation

> Icebreaker rules for service in heavy ice conditions

> Rules for materials taking into account low temperatures

> De-icing rules for proactive preparedness to ensure operational safety.

! facts:

Russia is the talking point in cold-climate operations. Five Aframax tankers with DNV class have been ordered in Korea for operations

in the Sakhalin I field – all for delivery in 2005, to be chartered to ExxonMobil.

7DNV Forum #01 2005

Photo

: Ste

na

Explosions led to newpipeline standards

Major catastrophes in the US have changed the way pipelines are regulated across the

country. The newly DNV-acquired company Cortest Columbus Technologies has been

instrumental in developing new industry standards. TEXT > PER WIGGO RICHARDSEN

Photo

: Belli

ngham

Hera

ld

9DNV Forum #01 2005

In June 1999 a gasoline pipeline ruptures

in Bellingham, Washington. Almost one

million litres of gasoline are released and

ignite, sending a fireball racing down a

creek resulting in the death of two 10-year-

old boys and an 18-year-old man.

In August the next year, a natural gas

transmission pipeline ruptures near

Carlsbad, New Mexico. The released gas

ignites, resulting in twelve fatalities of

persons who were camping near by.

“After the Bellingham catastrophe, CC

Technologies was involved in assisting in

the return to service of the pipeline,” says

Dr. Neil G. Thompson, the president and

founder of the company. “CC Technologies

has assisted in restoring public confidence

in the pipeline operation through public

relations, public awareness, and emergency

preparedness meetings for communities

along the pipeline right-of-way.”

After the next catastrophe – in Carlsbad

– the scope was extended. CC Techno-

logies became even more instrumental in

the more long-term development of new

industry standards and in promoting

pipeline integrity to help insure public

safety and to protect the environment.

AGING PIPELINES. When considering both

transmission and distribution pipelines,

one third of the global oil and gas pipeline

infrastructure is within North America.

Over 50 per cent of the pipelines in the US

are 40 years or older. Around 80 per cent

cannot be inspected using traditional tools.

Some operators are still managing the

integrity of pipelines originally fabricated

more than 70 years ago – well before the

concept of integrity management and

intelligent pigging were established.

Although tragic failures have occurred, the

challenge remains to utilise integrity and

risk-based management approaches to per-

mit aging pipelines to be operated safely.

It is not only in Bellingham and Carlsbad

that leakages occur. No one can be sure

how big the total figures in the US are, but

the annual leakage rate of oil is reported

to be similar to the worst-ever oil spill dis-

aster in the US, the Exxon Valdez, from

which the total leakage was 40 million

litres.

RISK-BASED APPROACH. Dr. Thomson says:

“The most significant factor is that pipe-

lines continue to age making the conse-

quences of even relatively low corrosion

rates more and more significant. If not

controlled, the relatively good safety and

leakage performance of the majority of

the US pipeline system will become worse.

A positive change has to be achieved in a

cost-effective way. We have to assist the

operators in finding the correct balance

between safety and cost.”

“There is no quick fix, neither here nor

in other parts of the world. But the good

thing is that the general focus has shifted

to an integrity management and risk-based

approach. There is a need for a documen-

ted, implemented and on-going integrity

management programme for all pipeline

systems.”

A NEW STRONG UNIT. The US is predicted

to have a major increase in gas consump-

tion over the next 20 years. This increase

will need to be delivered through the aging

pipeline system.

Over the past few years, there has been

a strong focus on the North American

pipeline systems, but the challenges are

similar in other parts of the world, too.

Increased focus on pipeline integrity is

expected in South America, the Middle

East, parts of Asia, and the former Soviet

Union.

Even with the significant challenges of

maintaining a safe and reliable pipeline

delivery system, Dr. Thomson is an opti-

mist. He says: “We will together be a strong

unit within this market. DNV and CCT

have very complementary technological

and market positions, and this acquisition

will improve our expertise and services.”

< The oil pipeline explosion in Bellingham, Washington six years ago changed the way pipelines are regulated across the US.

CC TECHNOLOGIES:

> an engineering, research, and testing firm with 130 employees specialising in corrosion and onshore pipeline integrity.

> acquired by DNV in February 2005.

> research and testing laboratories located in Dublin, Ohio in the USA and Calgary in Canada.

> programmes have been managed for the Federal Highway Administration, Office of Pipeline Safety, Department of Defence,

Department of Energy, Pipeline Research Council International (PRCI), Gas Research Institute (GRI), Electric Power Research Institute (EPRI)

Materials Technology Institute (MTI) and Construction Engineering Research Laboratory.

! facts:

Dr. Neil G. Thompson is president and

founder of CC Technologies.

BP pioneers deepwaterproduction in the Gulf

BP is the largest producer of oil and natural gas in the United States and an

acknowledged leader and operator of some of the most prolific fields in the Gulf

of Mexico. Now the company has constructed the Holstein truss spar, the largest

ever built in the world.

DNV Forum #01 200510

Photo

: BP

Located in approximately 4,500 feet of

water in Green Canyon Block 645,

Holstein production began in December

last year. The facility is designed to process

approximately 110,000 barrels of oil and

150 million standard cubic feet of gas per

day.

The Holstein truss spar was constructed

in two yards - in Finland and the US. The

dry tow from Finland was followed by a

launch and wet mating prior to wet tow to

site.

NOTABLE FIRSTS. There are a number of

notable firsts on this project. For example,

Holstein is the largest truss spar hull and

mooring system in the world, and involved

the first-ever use of a spar-supported riser

tension system.

The Holstein field was discovered in

1999, located in the deepwater Gulf of

Mexico, approximately 150 miles south of

New Orleans, Louisiana. The project was

sanctioned in 2001 and first oil was

obtained in 2004.

DNV VERIFICATION. DNV has been involved

all the way in following up the engineer-

ing; concept, detailed engineering, con-

struction, transportation of the hard tank,

wet mating of the truss and hard tank, tow-

ing of the hull to the field, and installation

of the hull, mooring system and suction

piles.

In addition, DNV has carried out risk

analyses regarding: blow-out from the ris-

ers during production, installation and

workovers, work related to the lifting and

installation of the topside, and blow-out

during drilling operations. An extensive

third-party review of the documentation

and verification analysis was also carried

out for the platform’s top-tensioned pro-

duction risers and the export oil and gas

steel catenary risers.

! facts:

HOLSTEIN IN BRIEF:

BP is the operator, with a 50%

working interest. Partner Shell

holds a 50% working interest.

Start date: 2004

Platform design: Truss Spar

Block: Green Canyon 645

Platform production rating:

> 110,000 barrels of oil per day

> 150 million cubic feet of gas per day

11

International shipping lacks

leadership

Frederick Tsao has been the chairman of

the International Association of Dry Cargo

Shipowners (Intercargo) for almost seven

years. A recognized leader in Asian ship-

ping, Tsao has for a long time advocated

that the industry needs to work together in

order to promote a safe, efficient, and

environmentally friendly maritime trans-

port industry.

“I believe in an old Chinese saying that

if everyone plays their role, then everyone

will get what they want. Leadership is a by-

product of that. So don’t worry about lead-

ership, but about everyone knowing and

playing their roles. What we lack in ship-

ping, especially in Asia, is leaders that are

willing to step up, take responsibility and

play their role for the best of the industry,”

says Tsao.

ALIGNING INTELLECTUAL AND EMOTIONAL

VALUES. Tsao is a fourth generation

shipowner of the Singaporean based IMC

shipping company, the shipping arm of

the IMC Group. When DNV Forum catch-

es up with him he is at a leadership semi-

nar guiding IMC managers to adapt to the

changing times in shipping.

“We have had to change our strategy to

respond to the multi-national, fast-growth

Asia environment. We are doing everything

we can to motivate people and align both

their intellectual and emotional values to

bring about unity, and help transform IMC

from a shipping company into an industri-

al supply chain company,” says Tsao.

“Without unity and cohesiveness what

you loose ultimately is competitiveness,”

Tsao claims, with the implication that lack

of unity in the industry has similar nega-

tive effects.

FROM WEST TO EAST. According to Tsao,

the centre of the shipping industry is mov-

ing to the East, capitalising on the regions

lower costs and the increasing trade with

Asia.

“Shipping is a global industry, but politics

are local. Even though shipping operations

are moving east, the regulations are still

being made in the west, and some of these

regulations are not very friendly to the

industry,” says Tsao.

He explains; “In the west the labour

unions are mostly gone while ship crews

are now mostly from Asia. The recent ini-

tiative by regulators criminalised the cap-

tain in the event of an accident. The only

opposition within the EU against this came

from Greece, Malta, and Cyprus.”

He emphasises; “We need to align our

interests with the Greeks, because they are

the last defence line within the EU work-

ing for the best interest of the industry,”

says Tsao.

BETTER REGULATIONS. Tsao firmly believes

that an important building block toward

higher standards of shipping is interna-

tional regulations.

“We need better regulations to continue

raising the industry standard. However, the

industry should actively participate in the

formulation of the regulations. That way,

we can get the sensible, good regulations

we need and not regulations as a knee-jerk

reaction to accidents,” he says.

He feels that the common rules project

is one step in the right direction. “We want

class to be united and set standards, and

not be so commercial. If classification soci-

eties could focus on training, quality of

surveyors and consistency, instead of fight-

ing each other, then it's a step in the right

direction towards higher standards. We

need class to set benchmarks for quality.”

STEPPING DOWN. In September Tsao will

end his tenure in Intercargo, during the

association’s 25th anniversary, having a

number of accomplishments under his belt.

“We have completed the infrastructure

building, the direction paper, and the opti-

mal bulker carrier project, which has been

very successful. In fact, around 50 of these

holistic bulker carrier designs, made by

shipowners, class societies and yards, have

been sold already. And beginning this year

we have merged the secretariat with

Intertanko, which will enable us to be

more effective. We are also firmly in the

black. Now is the time for me to leave,”

says Tsao.

13DNV Forum #01 2005

As booming Asia is shifting the centre of the shipping industry from west to east,

Frederick Tsao, chairman of Intercargo, contends that international shipping lacks

leadership; "This is the time for renewed co-operation and communication in shipping."

TEXT > ANDERS ØVREBERG PHOTO > NINA E. RANGØY

“I HAVE EXPERIENCED THAT PERSISTENCE, ENTHUSIASM, AND BELIEFARE NEEDED TO CREATE CHANGE.”

No quick fi14

No quick fixes

Extreme weather might be an early warning of climate change.Solutions are in demand. So, is underground storage of CO2

a sustainable solution? TEXT > KRISTIAN N. LINDØE PHOTO > SCANPIX

“While CO2 storage may not be a silver bul-

let, it might just be the best thing to do,”

says Tore A. Torp, Statoil’s CO2 expert, and

an authoritative voice within the interna-

tional forums where climate change and

harmful emissions are combated.

“Underground storage of CO2 could

help Europe to meet future Kyoto emis-

sions trading targets,” says Tore A. Torp.

“Therefore, it should be included as one

option that gives credit for CO2 emission

reduction under the Kyoto protocol.”

“This is not about shoving the dirt

under the carpet, like some seem to think.

Most of the CO2 comes from under the

ground and putting it back there in a safe

and secure way might actually be the most

responsible thing we can do. The CO2 lev-

els in the atmosphere are growing so fast,”

he says.

PIONEERING PROJECT. Acknowledging the

need to do something, Statoil has gained

valuable experience through actions.

As the first oil company in the world,

Statoil led the pioneering project Sleipner,

which started in 1996. For the first time in

history, excessive amounts of CO2 con-

tained in natural gas from the offshore

Sleipner field was stripped off and injected

above the gas reservoirs into the Utsira

sandstone formation for long time storage.

About 2,800 tons of carbon dioxide are

separated daily from Sleipner West’s gas

production and injected into the Utsira

sandstone formation, rather than released

to the air. Unlike before, the CO2 was now

injected to the ground only for environ-

mental reasons. Previous experiences from

capturing CO2 and injecting it into oil and

gas reservoirs to squeeze out more oil and

gas was helpful, but injection solely for

environmental reasons was completely

new.

KEPT IN PLACE UNTIL THE NEXT ICE AGE

In 2000 a research project demonstrated

that the injected gas remains in place

rather than leaking out. With a thickness

of 250 metres, the Utsira formation can

store 600 billion tonnes of CO2.

“The entire CO2 emissions from all the

power stations in Europe the next 600

years could be deposited in this structure,

and there are several such underground

structures around the globe,” says Tore A.

Torp.

One question asked by both researchers

and other people when they hear about

the Sleipner solution is how long the CO2

will remain underground.

Extensive inter-European research

16 DNV Forum #01 2005

Statoil’s CO2 expert Tore Torp is

an authoritative voice within the inter-

national forums where climate change

and harmful emissions are combated.

No quick fixes?The Kyoto protocol is ratified. Emission trading schemes are in place. Research on energy

efficiency and renewable energy is boosted. But is it still too little, too late, and too slow?

Many believe so. CO2 capture and storage is therefore a hot topic.

TORE TORPPhoto: Statoil

cooperation has been carried out on this

project to study the CO2 underground

behaviour and the probability of leaks.

Tore A. Torp admits that the re-

searchers cannot promise it will stay in

store for ever. “But a duration until the

next ice age, in 5–10,000 years, must be

good enough,” he says.

TECHNOLOGY DEVELOPMENT TO CUT COSTS

Referring to recent studies, Tore A. Torp

estimates the cost of installing the best

available CO2 capture technology at a gas

fired power station, piping it out in the

North Sea and re-injecting the CO2 under

the seabed would cost 40 euro per tonne

of CO2.

“However,” he says, “although the tech-

nology is currently expensive, the burden

could be reduced to a manageable level by

spreading the cost. As long as it’s free to

emit CO2, anything else will cost more.” In

Norway, where Statoil has 80 per cent of its

production, a tax on CO2 emissions have

effectively forced energy companies to find

ways of reducing CO2 emissions. European

countries have now started emission trad-

ing to the same end.

THE WORK CONTINUES. Even though the

technology is expensive, Statoil is going to

store excessive amounts of CO2 (700,000

tonnes per year) from the new Snøhvit

field once the gas is on stream. Such

massive projects will also help bring about

better and more affordable technology

solutions.

Statoil is keen to pursue viable and sus-

tainable methods that can help reduce

CO2 emissions at a pace that really makes

a difference. Through the EU and other

international organisations, the research

cooperation continues. All results about

storage is open and being published.

“I am glad that DNV plays a role in this.

Through its strong knowledge base and

independence, DNV can contribute to cre-

ate an understanding of both facts and the

risks involved when dealing with CO2 emis-

sions reduction,” says Tore A. Torp.

17DNV Forum #01 2005

FROM GAS TO LIQUID

At Sleipner, CO2 is compressed under 73

atmospheres of pressure, which turns it

from gas to liquid form. It then flows

from the compressor to an injection well

1,000 metres deep. This squeezes the

liquid gas into an underground storage

chamber under the seabed filled with

thick, water-bearing sandstone. The liquid

gas displaces the water and absorbs into it

in the same way CO2 is dissolved to make

a fizzy drink.

>

Illust

ration:

Sta

toil

Morten Arntzen:

Has 100 ships – wants a model

18

“I’m still looking for a model of the

Bergensfjord, the ship we arrived in,” he

admits, looking nostalgic, when we meet

him in his Overseas Shipholding Group

(OSG) office in New York, USA. He stayed

in the US, married, and had four children.

SHIPPING – AND SKIING. Maybe he was pre-

destined to climb right to the top of one

of the world’s largest shipping companies?

“If you’d asked me what I wanted to be

when I was a boy, I might not have been

able to tell you. But the fact that I became

what I am may be almost because it had to

be like this. When I first started to work in

a bank, I was transferred immediately to

the shipping department. Norway and

Norwegians were, then and now, synony-

mous with shipping. That’s just as clear as

the fact that Norwegians are born wearing

skis. Without knowing it, I’d probably even

then started on the path to becoming a

shipowner. It’s a career and development

I’ve never regretted,” he says convincingly.

PEOPLE AND EXPERTISE. At the same time,

he thinks Norwegians should be less con-

cerned about parts of their shipping indus-

try being bought up by foreign companies.

“We ourselves have just acquired

Stelmar, the Greek shipping company.

We’ve not only bought the ships, we’ve

also got the entire organisation and that’s

much more than just steel ships. It’s peo-

ple and it’s expertise. And you can’t move

either people or expertise very easily. Nor

have we any desire to do so. We are satis-

fied with the well educated, highly skilled

and strongly motivated staff we found at

Stelmar Shipping, and we intend to build

more upon it. The value of the shipping

environment in Greece is an important

part of what we’ve acquired. The same

applies to Norway. Teekay at least claims

that it has more employees in Navion in

Stavanger now than before. I don’t know

the figures for Bergesen since Worldwide

took over, but I’d be very surprised if the

Sohmen family thinks differently to us:

they have acquired the ships, but they’ve

also bought the expertise of the staff and

an important part of the unique shipping

environment in Norway. In the same way

as Helmut Sohmen operates out of Hong

Kong and has a lot of activities in

Singapore and Oslo, we have our head

office in New York, a great deal of activity

in Newcastle in England and now also

Stelmar in Athens.”

MOST ACTIVE YEAR IN OSG’S HISTORY

Morten Arntzen has been at the top in

OSG for just over a year; perhaps the most

active year in the company’s history. With

barely concealed pride, Morten Arntzen

lists the events that have taken place:

> The most important was the acquisition

of Stelmar.

> Their fleet increased to more than

100 ships.

> They managed to prove they have

in-depth knowledge of LNG and won

19

Morten Arntzen is a breath of fresh air in US and international shipping. He arrived

in the USA as a three-year-old in 1958, since his father was going to establish the

Norwegian law firm of Wikborg and Rein’s first US office. The family came by sea from

Norway, just like real immigrants did half a century before. TEXT > HARALD BRÅTHEN PHOTO > OSG

President and CEO of OSG MORTENARNTZEN. Prior to taking up this posi-

tion at OSG, he was CEO of American

Marine Advisors, a US-based merchant

banking firm specialising in the mar-

itime industry.

DNV Forum #01 2005

MORTEN ARNTZEN

20 DNV Forum #01 2005

the Qatar gas tender in competition

with eight other shipping companies.

> They ordered four LNG tankers from

Hyundai and Samsung for delivery from

2007 to 2010.

> Together with Euronav, they acquired

the only four double-hull ULCCs in the

world at a price of USD 112 million

each. Arntzen does not hesitate to call

that the number one shipping ‘theft’

of 2004.

> They have also made a recommitment

to investing in the US Flag market.

BACKED BY TECHNICAL COMPETENCE. “Our

growth is backed by technical competence,”

says Morten Arntzen. He is concerned

about the shipping companies themselves

retaining the technical operation of their

own ships. “I don’t believe in outsourcing

the technical management of our ships,”

he says. “We are often asked: Do you con-

trol the technical management? And we’re

glad we can answer that we do. In addi-

tion, we have the capacity to add to our

fleet without having to increase our

onshore organisation significantly.”

OSG is one of the world’s premier

energy transportation companies with

a staff of 3,850 employees, of which 350

work onshore. Together with its partner

Qatar Gas Transport Company, OSG

recently signed a contract for the largest

LNG carriers on order to date. Two of

these 216,000 m3 vessels will be built at

Hyundai Heavy Industries and two at

Samsung Heavy Industries – all four to

DNV class.

“We have high expectations for our

collaboration with DNV,” says Morten

Arntzen. “DNV is a fantastic global organ-

isation built on intellectual capital,” he

states, emphasising that DNV was chosen

for both its knowledge of LNG and its

relationship with the two Korean ship-

yards.

NEW TAX SCHEMES. After 17 years the US

has created a level tax playing field for US

companies competing in the international

markets. The Jobs Creation Act of 2004

signed into law by President Bush in

October 2004 restored the deferral of

foreign-source shipping income for US

shipping companies.

“This means that companies like OSG

will no longer be burdened with a 35 per

cent tax disadvantage when competing

with the rest of the international tanker

world,” says Arntzen.

Had this already been in effect, OSG

would have saved some US $95 million

in taxes during the first three quarters

of 2004.

MORE JONES ACT SHIPS. OSG has ambi-

tions to build 10–15 Jones Act product

carriers. Kvaerner Philadelphia shipyard

is a partner to move forward with the

programme.

“Shipping has become a serious indus-

try, with several large players that have

long-term goals and which also have

sound earnings and large profits. In addi-

tion, quality and safety are at the top of

the agenda for all the big players. The

OPA 1990 must take its share of the hon-

our for this. The infinite consequences of

a possible oil spill led to all serious players

putting quality first. This has paid off

many times over for the entire industry,

and has resulted in a complete change

of focus. For us in OSG safety, quality and

protection of the environment are at the

top of the agenda.”

Morten Arntzen would also welcome

a consolidation among the class societies.

“This would be good, both for DNV and

for the industry,” he says.

OSG has a fleet of more than 100 ships, and has now ordered four large LNG carriers to be built in Korea to DNV class.

21

After the September 11 terrorist attacks, the US

government issued stricter regulations for their

embassies worldwide. The relocation of the US

embassy in Oslo, Norway, is a consequence of

this as the building and location of the present

embassy in the city-centre no longer satisfy the

requirements. After some time searching for a

new location, the US embassy chose a former

military area within the city border, located

near a well-established residential area.

DNV Consulting was asked by Skifte Eien-

dom, a unit within the Norwegian Armed

Forces’ property company, to conduct a risk and

vulnerability analysis of the local environment

surrounding the possible site of the new embassy.

The analysis was prompted by the sensitive

nature of relocating what many consider a possi-

ble terrorist target to the middle of a neighbour-

hood.

“We wanted an independent third party to

analyse the extent to which locating a US

embassy here would lead to a reduction in the

personal safety and quality of life of the

embassy’s neighbours and other people who live

near to or travel in the area around the

embassy,” says director Sverre Tiltnes of Skifte

Eiendom.

DNV Consulting used a risk-based approach

in their work, and the analysis was based on the

following aspects:

> Open areas

> Traffic

> Alienation

> Demonstrations

> Terrorist attacks

QUALITY OF LIFE. The report showed that the

relocation of the embassy to the proposed site

would lead to a moderate-to-slight reduction

in the personal safety and quality of life of the

embassy’s neighbours.

At the same time as DNV Consulting was

given its task, Skifte Eiendom also asked the

Norwegian Police Security Service to analyse

security issues with regards to the new embassy.

This report, however, is confidential.

The Oslo Municipality now has to decide

whether or not the new embassy meets their

requirements, and if there is going to be a sale

of the property to the American government.

Neighbours protest

US embassy relocation Plans to relocate the US embassy in Oslo near a well-established residential area were

met by noisy protests from neighbours. TEXT > EVA HALVORSEN PHOTO > US EMBASSY IN OSLO

DNV Forum #01 2005

Following September 11, the present US embassy in Oslo, Norway, does not

meet the stricter requirements stipulated by the US authorities for their

embassies.

Director of

Skifte Eiendom.

SVERRE

TILTNES

> > news

Improving surveyors’ safety and working conditions

To further its commitment to the German market, DNV has

now established a German Technical Committee – the first

meeting of which was recently held at DNV’s headquarters.

Prof. Dr. Ing. Stefan Kruger, Technische Universität Hamburg-

Harburg, is acting as chairman. In his opening address he empha-

sised that DNV’s newly established technical committee is a signal

that DNV is furthering its commitment to the German shipping

industry: “The founding of this new committee clearly shows that

DNV is giving the German maritime sector a high priority. The new

body will serve as an important forum for technical discussions

relating to maritime subjects that are key issues for success in our

business.”

This sentiment was echoed by DNV’s CEO Miklos Konkoly-Thege,

who acknowledged the help from committee members in advising

the society on how to further enhance the services it is providing

to the industry.

22

DNV has, together with Loyd’s Register, the American Bureau

of Shipping, NK and the Russian Register, announced a common

initiative to improve the safety of the surveyors on assignment.

The five societies’ ambitions are to provide a safer workplace at

all times for all surveyors.

The continued exposure of classification society surveyors to poten-

tially unsafe working conditions when on assignment has been a

catalyst to jointly develop this initiative. This push for safety might

impact the shipyards, offshore platforms, manufacturers, and other

third-party sites where the surveyors work.

Surveyors from different class societies have experienced being

set up against each other when requiring improved safety standards.

Under this new initiative, a refusal to work from one of the class

societies due to an unsafe condition will represent a refusal from

all five societies.

Per Linden, the global SHE coordinator in DNV Maritime, says:

“Even experienced surveyors can be put under pressure to carry out

their work in a potentially unsafe location. This initiative will make

it easier for the individual surveyor to require improvements before

entering a ship.”

Acquisitions ensure growth in DNV

The international community’s focus on risk and

zero tolerance of accidents have produced a great

demand for safety and quality-assurance services.

DNV has spent more than NOK 200 millions to

acquire companies that further strengthen its

expertise in the field of managing risk, primarily

aimed at the oil and gas market.

DNV had revenues of NOK 5,954 millions last year, producing an

operating profit after tax of NOK 153 millions.

The number of employees increased last year by 440 to 6,200,

among other things due to the acquisition of a total of six compa-

nies in the field of risk management close to year-end.

”A strong financial platform ensures our independence when

working to safeguard life, property and the environment. DNV’s

solidity is higher than ever, with an equity of NOK 3,116 millions,

representing an equity ratio of 65. This gives DNV a unique oppor-

tunity to pursue new initiatives,” says DNV’s CEO Miklos Konkoly-

Thege.

DNV Forum #01 2005

Photo

: N

ina E

. Rangøy

DNV establishes German Technical

Committee

Risk management to world leading

companies

DNV has developed a framework on risk management based

on the EFQM Excellence Model.

There are over 30,000 organisations that use the EFQM Excellence

Model to improve their business. The EFQM Excellence Model is now

reviewed and developed to meet industry needs and incorporate the

latest management trends.

“The framework on risk management will be valuable help to

organisations. Assessing and managing risk is essential for businesses

today. This framework is ideal for decision makers in their efforts to

drive a systematic approach to tackle risk head on,” says Christiaan

Leeber, the CEO of EFQM.

DNV and the EFQM are hosting workshops worldwide to pilot the

new EFQM framework for risk management with selected organisa-

tions. For example a workshop in London late February was attend-

ed by representatives from Airbus Industries, Bosch, the European

Medical Agency, Huntsman, Liverpool University, Rolls Royce, South

Yorkshire Police, Specialist Schools Trust and the UK Waterways

Agency.

EFQM is a non profit membership foundation serving the business

community throughout Europe with over 700 member organisations,

25 national partners, and several global partnerships.

Thousands of small fishing boats were damaged by the tsunami on

26 December. The UN asked DNV for its assistance in Sri Lanka, to

ensure the quality of repairs and newbuildings. This will help tens

of thousands of afflicted fishermen in the country.

The UN’s FAO (Food and Agriculture Organization) has been request-

ed by the government of Sri Lanka to assist in the repair and recon-

struction of the Sri Lankan fishing fleet. These range from 15-foot

canoes to 60-foot boats, and thousands of boats have been dam-

aged.

Øyvind Gulbrandsen, a UN representative in Sri Lanka says: “We

know of DNV’s considerable experience in this field. The UN foresees

an immediate need to establish a quality control system for both

repairs and construction of fibre reinforced plastic boats in this

nation – where fishing is an important trade.”

The DNV work has been paid for by DNV itself – free of charge to

the UN.

DNV helps fishermen in Sri Lanka

World’s largest LNG carriers to be classed by DNV

New York-based Overseas Shipholding Group, one of the premier ener-

gy transportation companies in the world, together with its partner

Qatar Gas Transport Company, has recently signed a contract for the

largest LNG carriers on order to date. Two of these 216,000 m3 vessels

will be constructed at Hyundai Heavy Industries and two at Samsung

Heavy Industries – all four will be built to DNV class.

All the vessels will incorporate pioneering features – two slow speed

engines, twin screws and reliquefaction plant. The GTT Mark III cargo

containment design will be applied for these vessels.

23DNV Forum #01 2005

Photo

: N

ina E

. Rangøy

“Being certified by DNV gives Norsk

Tipping an incentive to continuously work

on security-related issues,” says Morten

Schjelderup of Norsk Tipping, the

Norwegian State Lottery company.

He adds, “I believe that the players are

concerned about trust. A breach in securi-

ty would mean a huge effort to restore

confidence in our products.”

Norsk Tipping’s scope for their certifi-

cate is the development, design, market-

ing, sales, operation and support of lotter-

ies. DNV certifies lottery companies to the

WLA Security Control Standards© (see

background article).

SECURITY AS A DIFFERENTIATOR. National

lotteries have always been working consci-

entiously with security. Following the

growth in offshore companies, the lotteries

are even more concerned – and are now

demonstrating their security efforts to dif-

ferentiate themselves in the market.

Underlines Schjelderup, “We have seen

many examples of security breaches, which

have effectively ruined a very good brand

name. When lotteries establish a cross-

jurisdictional game like EuroMillion or

Viking Lotto, a common basis for trust is

crucial, because one security breach will

affect everyone.”

LIMITING ADDICTION. Norsk Tipping has,

for a number of years, carefully designed

their products to limit the probability of

players getting addicted to their games.

This design – as well as betting limits, age

limitation and information regarding

problem gambling – has enabled them to

provide good money for the beneficiaries

without exposing their players to un-

healthy gambling.

“We are concerned by the increased

international competition, as well as new

games with less focus on social responsibili-

ty,” says Schjelderup. “We are, however, very

encouraged by all the European countries

still wanting to control their national gam-

ing industry, despite the tremendous pres-

sure from big, international companies.”

He concludes, “In Norsk Tipping’s con-

stant endeavour to ensure security and

control, we have had a close cooperation

with DNV. I am very pleased to have

worked with such a professional organisa-

tion, and am certain we will have a close,

mutually developing cooperation in many

years to come.”

24 DNV Forum #01 2005

“A common basisfor trust is crucial”

Morten Schjelderup has held the position

as Vice President for Security in Norsk

Tipping, with responsibility for Security,

Safety, Control and Quality.

He has been a member and chairman of

the World Lottery Association Security

and Risk Management Committee since

1998, and heads the Nordic Viking Lotto

Security Group. He is also responsible for

all of Norsk Tipping’s operations towards

the National State Control Board.

Schjelderup recently accepted another

position in Norsk Tipping as Vice

President for Concept Development.

The lottery industry is at a critical stage in its development. Deregulation and the

power of the Internet make it more important than ever to control runaway gambling,

and promote the role of state-licensed lotteries as generators of funds for good causes.

TEXT > CHRISTINE CALVERT PHOTO > SCANPIX

MORTEN

SCHJELDERUP

25DNV Forum #01 2005

ABOUT NORSK TIPPINGNorway’s leading games company, wholly-owned by the Norwegian government.

Main objectives are to provide the Norwegian people with responsible games and entertainment within social acceptable conditions,

and at the same time ensure a secure and long-term profit for the beneficiary organisations.

Operates games of chance, such as Lotto, Viking Lotto and Joker, games of skill such as Tipping and Oddsen, and the scratch game Flax.

Member of the World Lottery Association.

Certification to the World Lottery Association’s

tailor-made security standards helps state-

licensed lotteries demonstrate that the public

can have trust and confidence in a lottery.

The World Lottery Association (WLA) repre-

sents state-owned lotteries from 74 countries

on all five continents, with combined annual

revenues in excess of US$ 103 billion.

By focusing on security systems, WLA wishes

to underscore the importance of security and

visibility in lottery procedures and operations.

DNV has entered into an agreement with WLA

to act as certification body for the WLA

Security Control Standards©.

INFORMATION SECURITY

Several lotteries have chosen to combine certi-

fication to WLA’s standards with the generic

information security standard BS7799. The

certificate proves that necessary precautions

have been taken to protect sensitive informa-

tion against unauthorised access and changes.

Companies who are not members of WLA also

have BS7799 as an option to measure and

improve information security. The WLA’s

standards are only open to WLA members.

Through a global network of local resources,

DNV has certified lottery companies in

Norway, Sweden, Denmark, Europe, and Asia.

Why is a lottery security system important?

Balancing constructionboom with safety

26

Offshore yard Keppel FELS in Singapore is brimming with projects, as the market for

offshore drilling rigs and floating production units is booming. As the steel structures

rise, so does the yard’s reputation. Millions of man-hours without lost time accidents

and projects delivered on time speak volumes of their ability to perform.

TEXT > ANDERS ØVREBERG PHOTO > NINA E. RANGØY

27

“THIS IS ALL TEAMWORK, NO MAN CAN BUILD A RIG ALONE.”

MICHAEL H. C. CHIA, executive director of Keppel FELS offshore yard in Singapore,

has to handle a building boom in the offshore market.

A wholly-owned subsidiary of Keppel

Corporation, Keppel Offshore & Marine

(O&M) is one of the largest offshore and

marine groups in the world. It has a strate-

gic international network of 16 yards, but

it all started with Keppel FELS.

With many projects going at the same

time, the yard is filled with people and

steel structures. More than 30 years of

experience in offshore engineering sends

many projects to Singapore and contracts

to the desk of executive director Michael

H. C. Chia.

“Our strength and expertise has been

built over these many years, building all

kinds of drilling rigs, such as jack-ups,

semisubmersibles and submersible drilling

barges. In between we also make floating

production units,” says Michael Chia.

MARKET UPSWING. A cyclical market has

left many yards in the dust in Singapore,

but now the market is swinging up.

“Over the past few years, oil companies

have focused on mergers and consolida-

tion. Now they need to get back to drilling,

and I think that is driving the market right

now. If you look at the rig profiles, I think

that half or more could be more than 20

years old, so the rig fleet needs modern

replacements,” says Chia.

OIL AND GAS PRODUCTION. Two prestige

projects currently ongoing at the yard are

the construction of parts of the floating

production units P-51 and P-52 for nation-

al oil-giant Petrobras in Brazil. Both are

being built to DNV’s offshore class.

“We try to stand on two legs; one is

drilling and the other is oil and gas pro-

duction. The market is slightly different

for these two segments, so we can achieve

a balance. Until P-51 and P-52, we were

probably more on the drilling side, but

they are very big oil and gas production

projects so it’s more balanced now.

LOCAL CONTENT VERSUS EXPERIENCE.

Keppel FELS, the technology leader in the

group, often build the more complex parts

of projects and then ship them to other

locations for final assembly. Keppel O&M

established an offshore yard in Brazil in

2000. That local presence has been crucial,

explains Chia, as Brazilian authorities de-

mand a lot of local content.

“We tried to do more of the project at

our offshore yard in Brazil for P-51, build-

ing on what we learned from work on P-

52. Still, the more complicated parts of the

lower hull, the nodes sections, are being

done here in Singapore. Without our local

presence in Brazil, however, it would have

been impossible to get these projects,”

says Michael Chia.

He is confident that the experience

with the P-51 and P-52 projects has put

Keppel FELS in a good position to move

forward with other floating production

projects. He rules out establishing more

yards in other strategic locations, however,

saying “I think our footprint around the

world is quite complete at the moment.”

HANDLING THE STRESS OF SUCCESS. Chia

lists a number of critical success factors

in handling the yard’s workload; building

experience, good engineering, R&D, exe-

cution on the ground, and solid project

management.

“Standardisation is also very important.

Many of these rigs are built to our own

design, and everything is very much stan-

dardised. It makes construction far more

efficient,” says Chia.

Team work and having the right people

is also something he lists very high,

because “No man can build a rig alone.

This is team work.” In fact, one of Keppel

FELS’ key strengths is its long experience.

“I think that in this business, to be good,

you need to retain knowledge and experi-

ence in the company. Even in bad times we

keep our core people and avoid downsiz-

ing too much. In two cases we even built

rigs on speculation. That has been success-

ful, fortunately, but it does involve some

risk,” says Michael Chia.

SAFETY FIRST. Business risk is one thing,

but when it comes to safety, Keppel FELS

has built an impressive record.

“On the Shah Deniz platform project

for BP we clocked 5 million man hours

without any lost time accidents (LTA). On

the P-52 project we now have more than

one million man hours without an LTA,”

says Michael Chia.

He explains that while the yard can

increase productivity, there is no such but-

ton to push for added safety. Says Chia;

“Safety is not something that can immedi-

ately be shifted into gear. Safety must be

built progressively through the years,

because it has to do with mindset and

behaviour of people, which is difficult

to change.”

Keppel FELS have set up strict systems

in their yard. Focusing on housekeeping in

particular, the yard is kept tidy, clean, and

well organised. “This is of course very much

helped by our safety auditor DNV, assisting

us in how to use the risk approach man-

agement to safety,” says Chia.

DNV Forum #01 2005

Following the signing of DNV’s partner-

ship with the Red Cross, geologist Marte

Ness was soon appointed as one of DNV’s

water experts. Inspired by this new experi-

ence she took her engagement one step

further as she in December became a Red

Cross rescue worker, prepared to leave on

72-hours notice the next time a disaster

struck.

It took 20 days: on 26 December the

biggest natural catastrophe the world has

ever seen took place when the giant tsuna-

mi spread out from the epicentre of an

earthquake off Sumatra. In such situations,

access to water is very often a problem

and, as a geologist, her typical job would

be to recommend where to dig or drill for

water, as well as water quality testing.

Early in the new year, Marte Ness left

Oslo together with a team of 35 experi-

enced Red Cross rescue workers to set up

and run a field hospital in Banda Aceh,

Sumatra. The hospital could hold 100

patients and had its own helipad.

“It was quite unreal; as we’ve all seen

on TV there was nothing left of the city.

Everything was completely flat, with sol-

diers and dead people everywhere,” she

says.

ESTABLISHING WATER SUPPLY. At the hospi-

tal she became responsible for water and

sanitation. She physically established the

hospital’s water-supply pipeline system:

coupled pipes, drove the truck, took care

of sanitation issues, and made the tap

stations and pumps work. Purified water

arrived in a large tank lorry every day and

was transferred to the hospital’s water tank

for further distribution from there.

“My task was to ensure clean water to

the hospital, and also to handle sanitary

matters such as latrines and waste hand-

ling,” she says. After taking only a few days

to erect, the hospital could treat all kinds

of patients. Many had trouble with their

lungs after swallowing dirty seawater.

“It was impressive. The Red Cross per-

sonnel were so professional, hard-working

and so nice to be with,” says Marte Ness.

On site inBanda Aceh

After last year’s tsunami disaster, DNV’s Marte Ness joined

the Red Cross rescue team in Banda Aceh as a water expert.

TEXT > EVA HALVORSEN PHOTO > RED CROSS

Marte Ness, DNV´s water expert.

28 DNV Forum #01 2005

Photo

: N

ina E

. Rangøy

>

DNV Forum #01 2005

Many survivors of the tsunami in Banda Aceh had trouble

with their lungs after swallowing dirty seawater.

29

INDESCRIBABLE FATES. As the hospital start-

ed admitting patients, all their stories

emerged and these made a deep impres-

sion on Marte Ness.

“The whole place was filled with inde-

scribable fates. Everyone was hard hit, hav-

ing lost their loved ones. They all had sto-

ries one wouldn’t think were possible,” says

Marte Ness, who is grateful she could con-

tribute to the relief work. Her five weeks in

Banda Aceh only made her more motivated

for further efforts in the future.

Later she has been appointed responsi-

ble for the development of new water proj-

ects on behalf of the Norwegian Red

Cross. She will be spending six months

partly at the Norwegian Red Cross’ head-

quarters in Oslo, and partly at different

sites in Sumatra.

DNV’s partnership with the Red Cross.

> As part of DNV’s CSR effort, a partnership is established with the Red Cross,

adding value to both parties.

> In a corporate web-based poll, DNV employees chose the Red Cross.

> In addition to financial support, DNV contributes with its expertise.

> Focusing on access to clean water, the partnership covers the development of Emergency

Response Water Modules for the effective use of groundwater in emergency

situations and a water component of a Red Cross water and sanitation project in Kenya.

30

“EVERYTHING WAS COMPLETELY FLAT, WITH SOLDIERS AND DEAD PEOPLE EVERYWHERE”

Looking ahead the Red Cross will contin-

ue their work to meet the UN millennium

goal of fighting poverty. When world lead-

ers gathered at the Millennium Summit

three years ago, they agreed upon integrat-

ed goals with time bound targets for reduc-

ing poverty and improving the environ-

ment. Access to clean drinking water is a

key factor and the UN Millenium

Development Goal for Water is to “halve,

by 2015, the proportion of people without

sustainable access to safe drinking water”.

When entering the partnership agreement

with the Red Cross, DNV chose water

issues to be the backbone of its efforts.

“We would like to enter into partner-

ships that both are useful for us in our

humanitarian work and at the same time

can be of importance for companies,” says

Thorvald Stoltenberg. “Together we can

work towards the UN millennium goal of

fighting poverty,” he says.

There is a range of easy and inexpen-

sive efforts that can be effectuated immedi-

ately and that can save millions of lives,

according to Thorvald Stoltenberg. He

refers to for instance vaccination of chil-

dren and work against HIV/aids.

“We have a mutual interest in working

to combat the dangers that exist and

utilise the opportunities available,” he says.

STRETCHED TO THE LIMIT. Thorvald

Stoltenberg points at the fact that the

tsunami catastrophe last December

reminded us all that we live in a small

world; The natural disaster had painful

impact on people all over the world.

After the tsunami hit, all aspects of the

Red Cross work were stretched to the limit.

For the first time, both the national and

international parts of the organisation

were put to the test at the same time.

“Suddenly the whole organisation were

under huge pressure,” he says.

LONG RELATIONSHIP. Thorvald

Stoltenberg’s first acquaintance with the

Red Cross was during the Second World

War when his father was arrested and sent

to Germany. The only contact the family

had with him was through short letters

mediated through the Red Cross.

“The Red Cross logo was a shining

symbol for me,” he says.

When the war was over, he signed up as

a member of the organisation, for which he

has had strong feelings for most of his life.

Later, he has personally experienced

the organisation’s work in the field, both

as Norway’s Minister of Foreign Affairs,

and as UN High Commissioner for Re-

fugees, and as UN Chief negotiator on

Balkan in such countries as Nigeria, the

Middle East, Nicaragua and Vietnam.

In 1999, he was elected President of the

Norwegian Red Cross – a responsibility

he accepted with enthusiasm.

“I feel privileged to have the chance

to work with the Red Cross,” he says.

31

The difference between life and death The former Norwegian Minister of Foreign Affairs, UN High Commissioner for Refugees and UN Chief

negotiator on Balkan, now President of the Norwegian Red Cross Thorvald Stoltenberg thinks that

cooperation with industry is an important contribution to their future humanitarian work. “Imagine

what we can accomplish together!” he says. TEXT > EVA HALVORSEN PHOTO > SCANPIX

The Red Cross often means the differ-

ence between life and death. “I have

seen the relief in people’s eyes as the

Red Cross cars drove in,” says

THORVALD STOLTENBERG, the

President of the Norwegian Red Cross

and former Norwegian Minister of

Foreign Affairs, UN High Commissioner

for Refugees, and UN Chief negotiator

on Balkan.

“THE RED CROSS LOGO GOT A SHINING SYMBOL EFFECT ON ME”

DNV Forum #01 2005

A typical oil producing installation has per-

haps some 30 to 40 optimisation and effi-

ciency programmes that the management

has to carry out. This comes on top of

everything else in addition to the running

operations. Being able to filter out those

programmes that either don’t work or

overlap other measures would of course be

a good idea. Doing it right, through scien-

tific methods based on decades of experi-

ence from the oil and gas industry is what

Jardine specialises in.

PERFORMANCE IMPROVEMENT DATA IN A

BUSINESS PLAN CONTEXT. “Still, perform-

ance improvement data is just a tool. What

needs to be done is building well-founded

performance improvement data into the

business plan and the plans for the run-

ning operations. Providing the best possi-

ble foundation for decisions in a business

context is the goal for what we do. Just

coming up with another optimisation ini-

tiative and walk away does not create much

value for the companies we serve,” says

Hari Vamadevan.

THE BIG PICTURE. “It is crucial that the deci-

sion makers are enabled to see the big pic-

ture. There is an obvious link between

asset integrity and asset performance

improvement. However, this link has not

necessarily been duly reflected in the

many optimisation initiatives used in the

industry,” says Iain Light, Chief Operating

Officer of DNV Consulting.

He continues: “By itself, each initiative

or approach is reasonable, but without a

holistic view and proper coordination, the

result might even be counter productive.

Platform managers usually have enough

on their plate, so they are sometimes

forced to make ad-hoc priorities on which

initiatives to pursue.”

Providing operational managers with

solutions that have been designed to take

into account the business aspects as well

as the integrity and safety aspects simplifies

and improves these decisions.

OUTSIDE OIL AND GAS. It is not only in oil

and gas where these services are having a

major impact. Iain Light continues, “we

have recently secured a major contract with

Network Rail in the UK that simulates the

entire West Coast Mainline Train Routes

and this will be used as a key part of the UK

governments Trains on time project to

measure the effectiveness of the train

operating companies.” DNV Consulting is

actively promoting the Jardine service line

to other market sectors and expect some

exciting contracts outside the traditional

markets.

“The goal is to enable the management

to base their decisions on an overall

understanding of how this all plays togeth-

er with their long term business plans,”

concludes Iain Light.

Exactly how muchmore efficient?

Squeezing more oil and gas out of both green field developments as well as existing fields

has been a priority for international oil majors such as Shell, BP, ChevronTexaco and ConocoPhillips

for years. By working with these companies, Jardine has built a reputation for providing relevant

and quantifiable data in the myriad of optimisation initiatives thrown at every oil producing installation.

TEXT > KRISTIAN N. LINDØE

32

”Science, not stargazing is what the industry needs when it comes to optimisation and efficiency programmes.

Still, performance improvement data is just a tool for planning the business aspects of the operations,” says HARI

VAMADEVAN, director in DNV Consulting and previously the managing director of Jardine, now a DNV company.

DNV Forum #01 2005

”Combining asset performance improvement with asset integrity management is the practical way of safely and

responsibly improving business performance. With Jardine on our team, we have the best tools available to do

just that in other markets as well as oil and gas,” says Chief Operating Officer of DNV Consulting, IAIN LIGHT.

ABOUT DNV AND JARDINE & ASSOCIATES

DNV acquired Jardine in January 2005. Jardine has earned a strong position through the integration of advanced life-cycle simulation tech-

nology and specialist engineering resources. Jardine is currently working with Shell on the Sakhalin project and the Salym project. Further,

Jardine works with Chevron Texaco and ExxonMobil on the Kizomba projects off Angola. Since the 1980s Jardine has provided optimisa-

tion solutions for all of Shell’s installations in the Southern North Sea, and for several of ConocoPhillips installations. Jardine is a leading

international provider of innovative solutions to asset performance problems in the oil and gas, chemical, power and rail industries.

33DNV Forum #01 2005

Says Carlos dos Santos, “I believe in making Angola a better place to live for the new generation. We are working for ourselves

and for our children – this gives me energy and commitment.”

A better environment for the new generationNow that 40 years of civil war has come to an end, the Angolan government has decided to prioritise

the environment, as one of many important issues. TEXT > CHRISTINE CALVERT PHOTO > ANDERS ØVREBERG

Angola:

34 DNV Forum #01 2005

However, in a country that has seven

national languages in addition to the offi-

cial language Portuguese, it goes without

saying that communication is a major chal-

lenge. Says Carlos dos Santos, National

Director of Environment, “We have some

tasks that must be addressed right away:

Education about the environment, and

awareness of how the environmental issues

of our country affect the quality of life

of our people. All of us, as citizens, are

responsible to protect the environment.”

CLEAN WATER A KEY CHALLENGE. “The

access to clean water is high up on our

agenda. We have set up a strategy for the

next ten years through the Johannesburg

Summit, and established a commission to

discuss sustainability topics such as water

and fishery activities.”

The Johannesburg Summit 2002 – the

World Summit on Sustainable Develop-

ment – brought together tens of thousands

of participants in South Africa, including

heads of State and Government, national

delegates and leaders from non-govern-

mental organisations, businesses and other

major groups. The goals were to focus the

world’s attention on meeting difficult chal-

lenges, including improving people’s lives

and conserving natural resources.

“In Angola we have a concentration of

people on the coastal areas. Consider the

fact that in our country, there are four mil-

lion displaced people. In this era of devel-

opment, we still struggle with basic con-

cerns like the health sector and education.

At the same time, we have to conclude on

how we can embark on a development

process that is sustainable.”

ECO-TOURISM FOR THE FUTURE. Angola

and Namibia are cooperating to combine

the national parks to protect biodiversity,

and develop eco-tourism. North Angola

also has a common project with French

and Belgian Congo to protect the

Maiombe forests – both to protect biodi-

versity, and to develop sustainable timber

projects.

Adds dos Santos: “Another important

biodiversity project is to map flora and

fauna in our national parks. We have now

started an environmental assessment

process through a national action plan for

biodiversity, and believe that the work will

take about 18 months.”

COOPERATION ACROSS COUNTRIES. “In gen-

eral, the communication with our neigh-

bouring countries is quite good. Internally,

we have received positive signals from civil

society and pressure movements.

“Angola is proud to be part of the

African environmental network. In addi-

tion, the future for Angola will be better

through working with DNV and other

international companies – helping us

attain high quality in our environmental

work.”

about CARLOS DOS SANTOS:

National Director of Environment, Carlos dos Santos is project manager of “Support to

Capacity-building for Improved Environmental Planning and Conversation of Biological Diversity

in Angola”. He is also responsible for “National Biodiversity Strategy and Action Plan”.

DNV IN ANGOLADNV opened its office in Luanda, Angola,

in March 2004.

MAIN PRIORITY: To support the offshore

oil and gas development in Angola, and assist

the build-up of a local supplier industry.

EXPERTISE IN: Biodiversity, coastal zone

management, waste management, and

cleaner production.

CONTRACTS IN ANGOLA: BP, Schlumberger,

Sonangol, Chevron Texaco, Norsk Hydro,

Pride, and Fina/Total.

DNV has for the first time in history given

full marks, level 10, under the Internati-

onal Safety Rating System (ISRS) and

International Environmental Rating

System (IERS) to the Sizewell A nuclear

power station in UK.

Sizewell A is the first business in the world

to be given the highest possible safety and

environmental awards by DNV.

DNV first started examining the multi-

faceted, in-depth processes needed to run

Sizewell A in 1996 and awarded the power

station an ISRS level 4. In 2000, they found

themselves the recipients of the much-

coveted level 9 award.

“I believe the secret of our success has

been continuity and consistency,” says

Sizewell A site manager Mike Wilding.

The ISRS is a periodic systematic, compre-

hensive audit of a site’s performance. It

involves the investigation of 20 specific ele-

ments including leadership, communication,

accident and incident analysis, planned in-

spections and maintenance, and knowledge

and skill training.

Sizewell A’s achievement is a fantastic

piece of work. This has been managed

through years of dedicated activity,” says

DNV’s Eric Pape.

World’s first ISRS and IERS

Level 10

> > news

! facts:

35

Why aren’t pilots held responsible?

36

“If the master chooses to ignore the pilot, he risks causing a lot of problems. In the end, he's damned if he does and damned if he doesn't.”

In December, 2004, a huge quantity of crude oil was spilt in the Suez Canal after the north-bound very large crude carrier Al Samidoon

collided with a structure in the waterway while in transit. An inquiry into the cause of the incident to the Kuwait Oil Tanker Company

(KOTC) vessel, which had Suez Canal pilots embarked, has begun.

Speaking to DNV Forum, KOTC fleet engineering and project group manager Mahmoud Abdullah recently shared his views of the

cause of the December Suez oil spill.

Last word

Samidon was not. The vessel was transiting

through the canal with pilots onboard

guiding the ship throughout.

COMMON DENOMINATOR. While it is clear

that the Al-Samidoon oil spill in the Suez

Canal occurred under very different cir-

cumstances, the two cases share one com-

mon denominator: The master/owner of

the vessel was held responsible for all dam-

ages.

While KOTC acknowledges that the mas-

ter is responsible for the vessel regardless

of who is onboard, the presence of pilots

complicates this issue. For example, if the

master chooses to ignore the pilot, he risks

causing a lot of problems. In the end, he's

damned if he does and damned if he does-

n't. In practice, the pilot is in charge dur-

ing the transit.

It is well known that pilots are some-

times responsible for causing major acci-

dents, yet in no part of the world are they

held accountable. Surely, somebody as to

do something about that? In my view,

there should be a full investigation (on

pilot activities) by a third party and in the

event that they are to blame for accidents,

the authorities responsible for pilots should

be held accountable and made to share

the costs.

USD 10 MILLION COSTS. In the case of the

Al Samidoon, the damage was extensive.

The vessel is currently undergoing dam-

age-repair work in Dubai Drydocks, and

at this stage the initial estimate of the steel

renewal has doubled to 550 tonnes. The

total cost is expected to exceed USD 5

million, with no final figure in sight.

In addition, KOTC has to absorb addi-

tional costs, both tangible and intangible

in terms of damage to the company’s repu-

tation, the cleaning up of the Suez Canal,

claims for environmental damage, claims

from various shipowners regarding the

fouling of their vessels’ hulls with crude

oil while passing through the canal, repair

costs/chemical cleaning costs, costs of mit-

igating further damage to the environment,

loss of revenue due to the vessel being out

of business for four to five months, among

others.

In this day and age and considering the

complexity of the shipping industry, we

believe it is time for such traditional laws

to be updated to be more in tune with

reality.”

KOTC fleet engineering and project

group manager.

“On December 14, 2004, the Al-Samidoon,

whilst transiting through the Suez Canal

under the control of two pilots of the Suez

Canal Authorities and loaded with 198,000

tons of crude oil, struck the bank of the

canal in an effort to avoid collision with

a moored dredger.

The vessel was in very good condition

at the time of the accident. Recently dry-

docked, the Al Samidoon had obtained a

Condition Assessment Program (CAP) rat-

ing of ONE for the hull and was on her

first loaded passage after drydock when

the accident occurred.

PILOTS ONBOARD. Suez Canal pilots were

onboard and manoeuvring the vessel at

the time of the collision. However, under

traditional maritime law, it is the master/

company which is held responsible for any

accident, not the pilot - even though com-

mon sense dictates that the pilots should

be held responsible in the Al-Samidoon

case.

We all remember the Exxon Valdez and

Prestige, both vessels which spilled a huge

quantity of crude oil. These vessels were

at sea and under the direct command of

the master, who represents the owner. Al-

DNV Forum #01 2005

MAHMOUD

ABDULLAH

(NOTE: Mr. Abdullah’s views do not necessarily reflect the views of DNV.)

contact

CORPORATE HEADQUARTERSHøvik (Oslo)NO-1322 Høvik

Norway

Tel: +47 67 57 99 00

ABERDEENCromarty House

67-72 Regent Quay

Aberdeen AB115AR

United Kingdom

Tel: +44 (0) 1224 335000

COPENHAGENTuborg Parkvej 8,

3rd Floor

DK-2900 Hellerup

Denmark

Tel: +45 39 45 48 00

DUBAIPO Box 11539, Jumeirah

Dubai

United Arab Emirates

Tel: +971 4 3526626

ESSENBusinesspark Essen - Nord

Schnieringshof 14

45329 Essen

Germany

Tel: +49 201 7296 0

GOTHENBURGNeongatan 4B

43153 Mölndal

Gothenburg

Sweden

Tel: +46 31 727 6400

HELSINKINahkahousuntie 3

(Skinnbyxvägen 3)

00210 Helsinki

Finland

Tel: +358 9 681 691

HOUSTON16340 Park Ten Place

Suite 100

Houston, TX 77084

United States

Tel: +1 281 721 6600

KOBEKobe Port PO Box 77

Kobe 6510191

Japan

Tel: +81 78 291 1302

KUALA LUMPUR24th Floor, Menara Weld

Jalan Raja Chulan

50200 Kuala Lumpur

Malaysia

Tel: +603 2050 2888

LONDONPalace House,

3 Cathedral Street

London SE1 9DE

United Kingdom

Tel: +44 (0) 20 7357 6080

MADRIDC/Almansa

105- 1ª Pta.- Ofic. 2

28040 Madrid

Spain

Tel: +34 91 4561600

MILANCentro Direzionale Colleoni

Palazzo Sirio 2,

Viale Colleoni 9

20041 Agrate Brianza (MI)

Tel: +39 039 6899 905

MUMBAIEmgeen Chambers, 10, C.S.T.

Road,

Vidyanagari, Kalina

Santacruz East

Mumbai 400098

India

Tel: +91 22 26650909 / 26654606

NEW YORKCrossroads Corporate Center

Suite 1200

One International Boulevard

Mahwah, New Jersey 07495

USA

Tel: +1 201 512-8900

OSLON-1322 Høvik

Norway

Tel: +47 67 57 99 00

PIRAEUS26-28 Akti Kondyli

Piraeus 18545

Greece

Tel: +30 210 41 00 200

RIO DE JANEIRORua Sete de Setembro,

111/12th Floor

20050 006 Rio de Janeiro,

Brazil

Tel: +55 21 2517 7250

ROTTERDAMBox 9599

3007 AN Rotterdam

Netherlands

Tel: +31 (0) 10 2922600

SEOULRoom 2110, Kyobo Bldg.,

Jongro 1, 1-KA, Jongro-Ku

Seoul 110714

Republic of Korea

Tel: +82 2 734 7326/7

SHANGHAIHouse No. 9,

1591 Hong Qiao Road

Shanghai 200336

China

Tel: +86 21 6278 8076

SINGAPOREDNV Technology Centre

10 Science Park Drive

Singapore 118224

Singapore

Tel: +65 6779 1266

STOCKHOLMBox 30234

10425 Stockholm

Sweden

Tel: +46 8 587 940 00

SYDNEYLevel 19, Northpoint

100 Miller Street

North Sydney, NSW 2060

Australia

Tel: +61 2 9922 1966

DNV PETROLEUM SERVICES PTE LTD27 Changi South Street 1

Singapore 486071

Tel: +65 6779 2475

www.dnv.com

PUBLISHED BY

Corporate Communications

N-1322 Høvik, Norway

Tel: +47 67 57 99 00

Fax: +47 67 57 91 60

EDITOR

Eva Halvorsen

Tel: +47 67 57 97 19

Mobile: +47 906 80 956

eva.halvorsen@dnv.com

DESIGN

DNV Graphic Communication

PRINT

GAN Grafisk, Oslo

COVER PHOTO

Courtesy of Fednav

© Det Norske Veritas 2005

DNV is a global provider of

services for managing risk.

Established in 1864, DNV is an

independent foundation with

the objective of safeguarding

life, property and the environ-

ment. DNV comprises 300 offices

in 100 countries, with 6,400

employees.

WWW.DNV.COM

DNV Forumcorporate magazine