Snøhvit strengthens local community

October 12, 2006, 09:00 CEST

A growing number of people want to move in, the supplies industry has been strengthened and optimism is up in business circles, according to a study of Snøhvit’s local impact.

Together with its Hammerfest LNG terminal, this field represents the first offshore development in the Norwegian sector of the Barents Sea and is due to come on stream next year.

The latest findings are presented a report published on 12 October by the Snøhvit impact research project, covering social effects from the start of work in 2002 until this summer.

“These results are positive in terms of both business life and population,” says Bjørn Fossan, government relations contact for the Tromsø Patch in Exploration & Production Norway.

“More than 60% of deliveries to the development have so far gone to Norwegian companies, which is a higher proportion than we had originally expected.”

Local suppliers in the Hammerfest area have won contracts worth NOK 2.2 billion to date, while the figure for northern Norway as a whole is NOK 3.1 billion.

“And that’s before the actual production period has even started,” Mr Fossan notes.

Statoil is also paying around NOK 100 million annually in property taxes to the Hammerfest local authority.

The Snøhvit development has led to population growth in Hammerfest. (Photo:Knud Helge Robberstad)

“Northern Norway previously had a problem with many people aged 20-30 moving away,” Mr Fossan adds. “We’re now seeing an increase in this age group, which is important for local population growth and stability." He was also reponsible for the impact analysis prior to the development.

However, one negative consequence of the development and the expanding population has been a rise in house prices. Mr Fossan says that these are now at levels otherwise only seen in Norway’s major cities.

Backed by Finnmark county council, Hammerfest local authority and Statoil, the study is the second major report from the impact research project.

Its analyses include oil and gas production in the far north, business development, population trends, socio-economic aspects, the housing market and the significance for young people.