Tore Torvund: "An excellent result for Oil and Energy"

February 10, 2003, 00:00 CET

"This is one of our best quarterly results ever," says Tore Torvund, senior executive vice president for Hydro Oil and Energy. "The overall results for the year are also very positive on the whole."

"I am very pleased," says Tore Torvund, who is responsible for oil and energy operations in Hydro’s corporate management. He refers to record high results in the fourth quarter – "a splendid end to 2002" – and describes the year as "very positive on the whole".

While high oil prices contributed to the excellent results, the main factors were Hydro's own efforts, Torvund points out.

"Production has been very high, up to 540,000 barrels a day in the fourth quarter. This shows that progress in all operative units in the organization has been good, and that systematic follow-up gives results on the bottom line. The continual efforts to reduce costs have also given results.

But although Torvund describes the general picture as very positive, he is disappointed in the results of exploration on the Norwegian continental shelf and internationally. Despite an exploration budget of over NOK 2 billion, the results did not meet expectations.

Another area that needs improvement is safety.

"We made progress during the last quarter, but the tempo of the improvement process is not high enough. We have to be better here," says Torvund, who points out that the requirements for safety in the industry are considerably more stringent than they were just a few years ago.

Excellent results – and manning reductions?

Almost at the same time as Oil and Energy presents excellent results, the business area announces that around 300 jobs will be cut. This figure includes both employees and consultants. The explanation is that the organization has to be adjusted to future tasks, as Torvund explains. And the adjustment has to be made in good time, not once there is already too little work:

"There are far too many examples of businesses in Norway waiting too long to make necessary adjustments. If we take action in good time, the process will be easier."

Torvund is also concerned that employees should have meaningful work.

"Employees have to feel that their efforts are needed in order to stay motivated. The expertise and capacity of the organization must be adjusted continually to the challenges we have ahead of us."

Optimism with certain reservations

"The quarterly result suggests Oil and Energy has good prospects for meeting the targets it has set for 2003," says Torvund. But he also warns against using these results as the basis for future prognoses.

"Things don’t always go smoothly in this industry. We also have to be prepared for unfavorable conditions.

"One of the most important tasks and targets is to reach a daily production of 510,000 barrels oil equivalents. Two major development projects – the Grane field and Fram Vest – shall be completed, and the plan for development and operation for the gas field Ormen Lange shall be submitted to the authorities. Several important exploration wells will be drilled internationally, and efforts to improve safety will continue," says Torvund. He concludes:

"We shall develop an organization that gives us greater force in the long term."