Who Owns Reality? Part 4

The autumn of 1986 marked a milestone for Statoil. After years of planning and development, production was finally set to begin on Gullfaks – the company’s great masterpiece and its first major field as operator. But just as optimism peaked, oil prices plummeted. What was meant to be a triumph quickly turned into a challenge.
The organization, painstakingly built to manage a large-scale operational unit, now faced a demanding restructuring. Staffing changes hit Gullfaks particularly hard. Such changes rarely come without resistance, and it didn’t take long before a crisis of trust emerged between employees and management – a crisis that would take years to heal.
A story in nine chapters.

Delta!

Under Harald Norvik’s leadership, the Delta Project—short for “Daily Efficiency Creates Secure Jobs” – became the first in a series of efficiency initiatives launched by Statoil. The project was introduced at a conference in Haugesund in December 1988 and was intended as a three-year consolidation program for the Exploration and Production (E&P) division.

The goal of Delta was to coordinate operations across the Norwegian continental shelf, optimize internal processes within the divisions, and review procurement of goods and services.[REMOVE]Fotnote: Eldegard, Tom m.fl. (1989). Lokale leveranser til petroleumsfelt i drift. Eksempelet Gullfaks. Næringsøkonomisk institutt. Nr. 112/1989. As with any consolidation, this involved a shift in power – local units lost some of their autonomy, and many employees felt an increasing distance from corporate leadership.

Nevertheless, the collected feedback showed that employees were generally positive toward the initiative. They actively participated in efforts to reduce costs and improve efficiency, and working groups and committees were established to support the process. The unions were also involved and felt that corporate management viewed them as a resource. A committed partnership was established, and the name “Delta” signalled that everyone was expected to contribute.

The goals were ambitious: a 10 percent cost reduction in 1989, and a further 25 percent by 1992. However, one issue had not been discussed with the unions—staffing. The Personnel Dimensioning Program (PDP) was introduced later, directed by corporate management. Its purpose was to adjust the workforce to the new market conditions, with each organizational unit responsible for implementing the cuts. The target was to reduce staffing by 30 percent compared to the original budget.[REMOVE]Fotnote: Status. (1989). nr. 3. Arbeidsstyrken skal passe til jobben.

PDP caused unrest, particularly among offshore employees.[REMOVE]Fotnote: Thomassen, E. (2022). Statoil og Equinor 1: Middel og mål: 1972-2001 (Vol. 1). Universitetsforlaget.. s. 247-250. Og Elvekrok, Ingunn. (2019). Et selskap i bevegelse. Strategi og struktur i Statoil 1972-2018. Masteroppgaver i historie. UiO. Gullfaks and Veslefrikk were hit hardest, and neither field received as many personnel as originally planned. At Gullfaks, employees felt that fewer and fewer people were expected to handle more and more tasks. According to the unions, this particularly affected maintenance, and concerns about safety grew—especially after a near-accident on July 29, 1989.

That day, the unthinkable happened: gas flowed freely on Gullfaks A for nearly two hours before production was shut down. Two valves had been left partially open.[REMOVE]Fotnote: Status. (1989). nr 9. Bremsene må settes på. The incident was caused by human error, which the unions believed could have been avoided with better staffing and more time. The Norwegian Petroleum Directorate (NPD) supported this assessment and issued an unusually strong response to Statoil.[REMOVE]Fotnote: Status. (1989). nr. 12. -På grensen til det forsvarlige og _ Minimumsbemanning må sikres. The company was ordered to review several areas, including recruitment, training, job safety analysis, and alarm system improvements. Many of these issues would resurface in later investigations.

The police also investigated the incident, and Statoil was fined one million kroner for negligence and poor management. The unions argued that management had moved too quickly with the staffing cuts.

Management acknowledged the criticism, and the Delta Project was officially concluded on October 12, 1989. Although the campaign was called off, the focus on efficiency was not abandoned. Deputy CEO Jakob Bleie, head of E&P, announced that efforts to reduce costs and improve efficiency would continue.[REMOVE]Fotnote: Status. (1989). nr. 17. Delta-kampanjen er innstilt, men effektiviseringene fortsetter. The initiative had already yielded results—one million kroner had been saved in administration and operations.[REMOVE]Fotnote: Elvekrok, Ingunn. (2019). Et selskap i bevegelse. Strategi og struktur i Statoil 1972-2018. Masteroppgaver i historie. UiO. s. 69.

In 1992, a new program was launched: Project 1995 (P95). It would have a major impact on the young Gullfaks organization, leading to mistrust, public debate, and ultimately—a new safety regime.