The Iraqi who saved Norway from oil(ft.com)
ft.com
The Iraqi who saved Norway from oil
http://www.ft.com/cms/s/2/99680a04-92a0-11de-b63b-00144feabdc0.html
7 comments
Great story, particularly in regard to the balance required to make the whole thing work, and to push the oil companies to innovate. It also brings to mind the essay "There are no Mom and Pop Oil Companies in Norway": http://groups.google.com/group/comp.lang.lisp/msg/b3b24fb751...
I love people who fearlessly operate like this:
"After the Ekofisk find, he had to train new recruits. “I, of course, accepted that I am teaching people so that they can make my existence unnecessary … What choice did I have? I had only one hope, and that is that through my contribution, I would become indispensable, which I did.”"
"After the Ekofisk find, he had to train new recruits. “I, of course, accepted that I am teaching people so that they can make my existence unnecessary … What choice did I have? I had only one hope, and that is that through my contribution, I would become indispensable, which I did.”"
“Not everything in life has been good – but things have mostly come in a fortunate order. It’s got nothing to do with skill, it’s simply luck. Like the idea to drop by the Department of Industry … it was just because I am the kind of person who hates waiting.”
Most successful people contribute their success to luck - maybe that's why they are so lucky.
Most successful people contribute their success to luck - maybe that's why they are so lucky.
Many successful people, when trying to be modest or polite will attribute much of their success to luck. How much of that is modesty? I don't know, but in this case, the guy is clearly being humble and letting the reporter talk him up.
It's a very, "for want of a nail," sort of story.
I wonder how many things in life end up being like this. Of course, I suppose you could take the anthropomorphic viewpoint, but I'm not fond of that.
I wonder how many things in life end up being like this. Of course, I suppose you could take the anthropomorphic viewpoint, but I'm not fond of that.
Immigrants. What a nefarious source of evil to be scorned.
I'm married to an immigrant (from China) and I and America are lucky to have her. Plenty of her fellow Chinese immigrant friends as well.
On the other hand, since we're on the subject of Middle Eastern immigrants to Norway, here's something from Bruce Bawer, a gay American who moved to Norway to marry his partner:
"Here in Oslo, a gay couple who were holding hands in the largely Muslim neighborhood of Grønland were physically assaulted by a man who told them: "This is a Muslim neighborhood." In a follow-up story, Dagbladet interviewed a local man, born in Pakistan but resident in Norway for ten years, who argues that "Grønland is a multicultural environment where there are many people who don't like homosexuals, so they shouldn't hold hands." He says such things are OK in west Oslo, where there are few Muslims, "but here in Grønland they shouldn't do it. Ideally, it should be forbidden to practice homosexuality in this area."
http://memo.brucebawer.com/
What matters is the value system of those immigrants, and it keeps mattering regardless of how desperate the politically correct are for an external source of self-worth. (I'm not saying that's you. I am saying that it is a great many such people.)
On the other hand, since we're on the subject of Middle Eastern immigrants to Norway, here's something from Bruce Bawer, a gay American who moved to Norway to marry his partner:
"Here in Oslo, a gay couple who were holding hands in the largely Muslim neighborhood of Grønland were physically assaulted by a man who told them: "This is a Muslim neighborhood." In a follow-up story, Dagbladet interviewed a local man, born in Pakistan but resident in Norway for ten years, who argues that "Grønland is a multicultural environment where there are many people who don't like homosexuals, so they shouldn't hold hands." He says such things are OK in west Oslo, where there are few Muslims, "but here in Grønland they shouldn't do it. Ideally, it should be forbidden to practice homosexuality in this area."
http://memo.brucebawer.com/
What matters is the value system of those immigrants, and it keeps mattering regardless of how desperate the politically correct are for an external source of self-worth. (I'm not saying that's you. I am saying that it is a great many such people.)
The problem you are describing is a result of ghetto-ization, both self-imposed (people like to live near their "fellows") and externally imposed (lack of a wide range of property values in an area leading naturally to income-segregation, with recent immigrants likely to end up stuck all together).
If you solve the problem of income-segregation by somehow generating a city where rich and poor live side by side, then I think you go a long way to tackling the source of ghetto-formation, both for immigrants and the local poor.
I have seen several cities where this has been achieved, though I have no idea why it occurs in one area and not another. I have a suspicion that it is tightly related to the density of development. A city with lots of skyscraper apartment blocks (both fancy and simple) can fit so many people in such a small area that even if the rich and poor live in different buildings, the buildings may be so close together that they share the same services (schools, hospitals, restaurants, etc).
As a concrete example, I live a short 5 minute bicycle ride from a friend of mine. My 8 story apartment building has about 24 units, all of them relatively modest. My friend lives in a million dollar condo in a building with probably 30-40 units as well. This is in the very heart of the city.
If you solve the problem of income-segregation by somehow generating a city where rich and poor live side by side, then I think you go a long way to tackling the source of ghetto-formation, both for immigrants and the local poor.
I have seen several cities where this has been achieved, though I have no idea why it occurs in one area and not another. I have a suspicion that it is tightly related to the density of development. A city with lots of skyscraper apartment blocks (both fancy and simple) can fit so many people in such a small area that even if the rich and poor live in different buildings, the buildings may be so close together that they share the same services (schools, hospitals, restaurants, etc).
As a concrete example, I live a short 5 minute bicycle ride from a friend of mine. My 8 story apartment building has about 24 units, all of them relatively modest. My friend lives in a million dollar condo in a building with probably 30-40 units as well. This is in the very heart of the city.
There's a massive difference between the emigration of a very smart, talented person who is eager to assimilate and contribute to society, and immigration involving large numbers of people who are unskilled and have no intention of becoming part of mainstream society in your country. (And I say this as an immigrant)
I'm also an immigrant (to Norway, actually), and I can tell you that it's quite difficult in practice to tell the difference-- it's not nearly as "massive" as you think.
I was in Oslo last week - there's large parts of town where it's quite easy to tell the difference. Anyway, this isn't the right forum for this discussion...
I read in a Norwegian newspaper that a part of Oslo "Grønland", there was a guy who thought that Norwegians should follow certain muslim norms because it's a muslim neighborhood. This was in response to some people that had been assaulted in the neighborhood.
In Norway anyway. In America the influx of hispanics is quite enormous. Most of them are hard workers and a net boon to our economy I think, but the demographic shift is quite astonishing.
Intention s irrelevant in the long rung. The only reason European politicians talk about it is because you can blame someone for intention.
They needed a geologist, he needed healthcare for his kids, it's a win/win situation. However Norway has a very low immigration rate.
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From the article: "It’s got nothing to do with skill, it’s simply luck. Like the idea to drop by the Department of Industry … it was just because I am the kind of person who hates waiting.”
IMHO people often attribute to luck what is in fact created by themselves.
On another note, Norway's oil production is now in sharp decline:
http://www.norway.org/NR/rdonlyres/3AE52C92-D215-419D-8131-9...
http://aleklett.wordpress.com/2008/07/30/a-decline-rate-stud...
IMHO people often attribute to luck what is in fact created by themselves.
On another note, Norway's oil production is now in sharp decline:
http://www.norway.org/NR/rdonlyres/3AE52C92-D215-419D-8131-9...
http://aleklett.wordpress.com/2008/07/30/a-decline-rate-stud...
Olsen gives al-Kasim much of the credit: he pushed the government to increase extraction rates; insisted that companies try new technologies, such as water injection in chalk reservoirs or horizontal drilling; and threatened to withdraw operating licences from companies that balked. “It is this culture, a culture of ‘squeezing the last drop out’, which he cultivated,” says Olsen.
As it stands, this makes no sense. If a cost-benefit analysis showed that investing in technology to increase extraction efficiencies would pay off (given the volatitlty of future prices, etc.), then it should have been done regardless of his urgings. If it didn't, he should never have pushed the idea. In the first case, StatOil would need new managers. In the second, the subject of the story would be wrong.
You'd think that the editors of The Financial Times would have pursued that issue in a bit more depth.
As it stands, this makes no sense. If a cost-benefit analysis showed that investing in technology to increase extraction efficiencies would pay off (given the volatitlty of future prices, etc.), then it should have been done regardless of his urgings. If it didn't, he should never have pushed the idea. In the first case, StatOil would need new managers. In the second, the subject of the story would be wrong.
You'd think that the editors of The Financial Times would have pursued that issue in a bit more depth.
Pay off now, or pay off later?
The incentive structure for a CEO or other executive at a large multi-national oil firm is likely such that he/she would much rather have a lot of oil drilled in the short-term, rather than a smaller ammount of oil in the short-term and a larger total ammount over the long-term. The same goes for the board members and investors.
"Long-term" here is decades, possibly generations, not next quarter. That means that a large chunk of the profits may be realized well after you're retired (or dead), which is not so great for your bonus structure, promotion schedule, or the ROI timeframes that most investors are concerned with (but fantastic for a nation-state). Furthermore contract structures over that kind of timeframe become a bit unpredictable, especially contracts with a sovreign nation, so better to get what you can now and get out.
This kind of long-term thinking is where corporations fall short. Even if it's the best interests of the 'corporation' to invest in the long term (which clearly ended up being the case here), it's not in the best interests of the individuals working there. Very few institutions are capable of that mode of operation (nations, monarchies/family dynasties).
The incentive structure for a CEO or other executive at a large multi-national oil firm is likely such that he/she would much rather have a lot of oil drilled in the short-term, rather than a smaller ammount of oil in the short-term and a larger total ammount over the long-term. The same goes for the board members and investors.
"Long-term" here is decades, possibly generations, not next quarter. That means that a large chunk of the profits may be realized well after you're retired (or dead), which is not so great for your bonus structure, promotion schedule, or the ROI timeframes that most investors are concerned with (but fantastic for a nation-state). Furthermore contract structures over that kind of timeframe become a bit unpredictable, especially contracts with a sovreign nation, so better to get what you can now and get out.
This kind of long-term thinking is where corporations fall short. Even if it's the best interests of the 'corporation' to invest in the long term (which clearly ended up being the case here), it's not in the best interests of the individuals working there. Very few institutions are capable of that mode of operation (nations, monarchies/family dynasties).
While I largely agree on most of your points, I think there's a porblem with this:
The incentive structure for a CEO or other executive at a large multi-national oil firm is likely such that he/she would much rather have a lot of oil drilled in the short-term, rather than a smaller ammount of oil in the short-term and a larger total ammount over the long-term.
That seems to me a bit of a strawman, though I confess I know little about how the oil business works. The issue here comes down to a present value calculation for proposed investments. You seem to be implying that the Iraqi engineer pushed for short-term maximization thru the use of new technologies. But those technologies cost money, now. That would reduce the company's profit and (if he's a shareholder) his (short-term) return.
The incentive structure for a CEO or other executive at a large multi-national oil firm is likely such that he/she would much rather have a lot of oil drilled in the short-term, rather than a smaller ammount of oil in the short-term and a larger total ammount over the long-term.
That seems to me a bit of a strawman, though I confess I know little about how the oil business works. The issue here comes down to a present value calculation for proposed investments. You seem to be implying that the Iraqi engineer pushed for short-term maximization thru the use of new technologies. But those technologies cost money, now. That would reduce the company's profit and (if he's a shareholder) his (short-term) return.
I confess I know little about how the oil business works
> So basically you're arguing from the axioms of free-market fundamentalism.
Since he was responding to an argument with even less basis, it's curious that only the response rated the above comment.
Since he was responding to an argument with even less basis, it's curious that only the response rated the above comment.
I'm curious, are you saying that you know a lot about the oil business.
And do you think that calling someone's position names (free-market fundamentalism) is a strong argument?
And do you think that calling someone's position names (free-market fundamentalism) is a strong argument?
The risks associated with introducing new technology need to be taken into account. An oil company may not think it's worth the risk to try untested technology (or rather, try standard techniques on untested reservoir conditions). But the Iraqi engineer / regulator, who isn't bearing the costs of failed forays into new technology, may think its a good idea. So their incentives are different.
The oil industry generally isn't very innovative, nor do they tend to test costly, untried technologies on their assets that already make billions of dollars.
Take water injection for instance, which is a standard method for maintaining reservoir pressure, ie. the pumping of water into the oil/gas reservoir to raise the pressure. In order to implement such a scheme, a well slot would be needed for the source water pump, and at least one other well slot for the injection well. Typically, these are done on separate water injection platforms. Add the cost of the workover drill rig to drill the wells and the increased cost of water/oil separation on the production platform, and it's a very expensive exercise... especially if it may not actually work (which is what is implied in the article with water injection in chalk reservoirs, which could potentially cause reservoir fracturing).
An oil company, especially a relatively new one like Statoil in the 70s/80s, would be justified to balk at costly experimentation with their fields, and would probably wait for others to prove the concept first. This is even more justifiable when the field is gigantic (like the Ekofisk field). Oftentimes, cutting edge technologies are used on smaller, marginal fields with relatively high lift prices, and where oil price volatility is the difference between profit and loss (I worked on a project in 2002/3 when oil was around $25 a barrel and this field was only profitable at a price of $30 per barrel... the field actually needed water injection right from first oil, which means that it was definitely marginal... so they were lucky when oil prices shot past $100). In any case, you don't see much innovation happening in the huge saudi fields that have very low lift prices.
Take water injection for instance, which is a standard method for maintaining reservoir pressure, ie. the pumping of water into the oil/gas reservoir to raise the pressure. In order to implement such a scheme, a well slot would be needed for the source water pump, and at least one other well slot for the injection well. Typically, these are done on separate water injection platforms. Add the cost of the workover drill rig to drill the wells and the increased cost of water/oil separation on the production platform, and it's a very expensive exercise... especially if it may not actually work (which is what is implied in the article with water injection in chalk reservoirs, which could potentially cause reservoir fracturing).
An oil company, especially a relatively new one like Statoil in the 70s/80s, would be justified to balk at costly experimentation with their fields, and would probably wait for others to prove the concept first. This is even more justifiable when the field is gigantic (like the Ekofisk field). Oftentimes, cutting edge technologies are used on smaller, marginal fields with relatively high lift prices, and where oil price volatility is the difference between profit and loss (I worked on a project in 2002/3 when oil was around $25 a barrel and this field was only profitable at a price of $30 per barrel... the field actually needed water injection right from first oil, which means that it was definitely marginal... so they were lucky when oil prices shot past $100). In any case, you don't see much innovation happening in the huge saudi fields that have very low lift prices.
What is good for Norway is not necessarily good for the oil companies, which have opportunities elsewhere.
Well, the term "pay off" may mean different things. It may mean "pay off" for Norway or "pay off" for the oil companies.
All I get from that link is a page not found error. Has the article been pulled, or have ft.com tried and failed to provide a mobile version of their site?
Or are they just filtering access to that page from norway where the servers serving opera mini seem to be located, judging from the mislocalized adsense stuff google tends to show me?
Or are they just filtering access to that page from norway where the servers serving opera mini seem to be located, judging from the mislocalized adsense stuff google tends to show me?