The Snorre Field and the Rise and Fall of Saga Petroleum

This paper presents a case study of the Snorre field development focusing on the market for oil-related services related to the development of the oil field. The Snorre field was the first field developed by Saga Petroleum and it was also a step into deeper waters using floating technology in Norway. The Norwegian supply industry became world leaders in the TLP floating technology applied for the Snorre field. We find that the market for oil-related services is highly concentrated, the Norwegian market share is extensive, and foreign companies service the Norwegian market mainly from their Norwegian subsidiaries. We also find a strong negative correlation between Norwegian market share and competition measured by the number of bidders per contract. Relational contracts between the oil company and the service suppliers are most common during the operation/production phase and in the non-maritime services sector. Turning to sources of technology, we find that producer services have played a crucial role in the transfer of technology from multinational oil and offshore industries to the Norwegian petroleum sector. The TLP technology was first developed in the US for floating airfields and came to Norway through cooperation with multinational oil companies and local R&D work. Other channels of technology diffusion appear to have been agreements of technical assistance, joint ventures, foreign direct investments and employment of foreign professional staff on a contractual basis. It is, however, more difficult to identify technology diffusion from the Snorre field to the economy at large