In an interview with Energy Boardroom, Ambassador Jens Eikaas talks about UAE-Norway business relations, highlighting what the two nations have in common and what they can learn and adopt from each other, escpecially in the hydrocarbons sector.
The interview is featured in the November issue of Oil & Gas Report UAE.
Read the original article here.
Ambassador Eikaas, it has been a full year since our last interview with you. Last year you told us about the increasing significance of economic diplomacy. In this context, could you please share with us what has been accomplished since?
“[Companies] have to realize the importance of the three T’s in these parts of the world – Things Take Time.”
This comment reflected the increasing importance that the Norwegian government attaches to economic diplomacy overall; our foreign minister, for instance, has a business background as well and is not only a politician. Of course, assisting Norwegian businesses to establish themselves across the globe is an overriding goal for the entire foreign service. Not only do we support Norwegian businesses, but we seek to increase the economic cooperation between Norway and the countries that we serve in.
Today’s economic relationship between the UAE and Norway is splendid—not much has changed from a year ago, to be frank—on the other hand, developments in the hydrocarbons industry take some time as these are typically of a long-term nature. I am confident that there is leeway for increasing and improving the countries’ ties. The petroleum sector is, naturally, still of great interest, as both countries are heavily dependent on revenues from oil and gas, and therefore seek innovative solutions that can help cut costs and prolong the life of production fields. What’s more, there will be an offshore concession round coming up in 2018, which of course is highly interesting for Norwegian companies. Let’s face it, while Norway does have a lot of interesting technology also in the onshore segment, our global leadership and mass area of expertise is in the offshore oil and gas segment.
You say on your homepage that there are around 100 Norwegian companies established in the UAE, what would you say is the share of oil and gas related companies in that number?
I do not have an accurate split between the sectors that Norwegian companies are engaged in in the UAE. However, I am confident that the oil and gas sector is the strongest, followed by the maritime sector and the seafood sector. These three clusters represent the majority of Norwegian companies in the UAE.
What are the challenges of setting up a business here and how can the embassy support Norwegian business in their endeavors?
Setting up the business per se, is not very difficult in the UAE. Getting the results of setting up the business is the difficult part, as it may take much more time than the businesses expect. We have responded by establishing the position of a Senior Commercial Advisor within the embassy who assists Norwegian companies in the UAE as much has she can. Our clear strength in this aspect—unsurprisingly—is to set up meetings with the right people. Especially people in higher positions are often harder to reach for businesses, and as an embassy, scheduling meetings with these high caliber people is often much easier.
In October, the embassy in collaboration with INTSOK and the Norwegian Business Group organized a workshop at ADIPEC exchanging experiences on doing business in the region. Could you please highlight some of the main results?
The comments we received were highly positive. We were able to provide interesting and useful insights into how it is to work in the UAE and how the business environment genuinely is. The most important result was that a business must be careful when choosing a partner, agent or representative in the emirates. The potential pitfalls are immense. It may be a good idea not to take the first one, but rather take the time to talk to several prospective partners, and to seek advice of companies already fully established here.
Another common agreement was that companies should not expect quick results. Quite the contrary, they have to realize the importance of the three T’s in these parts of the world – Things Take Time. Companies also have to accept that it will be costly to set up a business here–this country really is everything but cheap—, hence you need a long-term plan and the right financial resources. Businesses should not be surprised if they need to operate for two or three years before they see tangible results. If a company has the stamina and understands the way business is done here, then there is great potential; there is still a lot of money available here for good projects and technologies!
So overall the assessment is that the UAE is an attractive market for Norwegian companies?
Yes definitely! Most of the Norwegians companies active in the UAE’s hydrocarbon realm are subcontractors to other companies or operate as consultants. As such, when you start your operations in the UAE, you will need to find your specific market first. That means that you will not necessarily engage directly with ADNOC or one of their companies for instance, but more likely with one of their partners who is a concession holder and chooses the technology and expertise Norwegian companies have to offer.
What do you think the UAE can learn and adopt from Norway and Norwegian companies?
I would argue that today both countries are on the same wavelength; both countries share the vision that there is immense potential to cut costs through technological advancement and innovation. However, in Norway we have always had to face the reality of operating in a high cost environment, hence we started seeking pathways to increase performance, efficiency and cut costs much earlier than was needed here.
I believe Norwegian companies can significantly contribute in the sense that we can help share the experience of changing to the ‘performance and efficiency’ mind set at an earlier stage than most other oil and gas countries. The UAE has been doing a tremendous job of cutting costs and increasing efficiency ever since the landslide in oil prices, however, this drive for efficiency was not as present before as it is now.
What about the UAE’s ambition to increase the sustainability of its energy matrix?
I am confident that this is another area of great potential for further collaboration and cooperation in between both countries; we have a lot of common denominators. Both countries have oil and gas as a backbone of their economy, both have visionary leaders who are highly committed to the paradigm shift to green energy and the Paris agreement. What’s more, both countries are trying to diversify their economy while being convinced that oil and gas will remain the backbone of their economy for decades to come. This, I believe, sums up the agenda of both Norway and the UAE. One example is Statoil and Masdar, interestingly their collaboration is strongest in green energy projects surrounding novel technology.
To what extent is Norway understood and recognized as the partner of choice, especially given that the country is officially striving for technology allowing a more sustainable energy matrix?
How important is it to you to drive the recognition of Norwegian companies as partner of choice?
I think the UAE authorities are looking for what they consider to be the best overall solutions. This includes reputation, experience and technology; however, it is also a matter of price. Therefore, it is not enough to just be technologically good; both sides have to share a common conviction in the sense that it is also economically beneficial. Although the initial price might be higher, the long term value is also higher thus making these products economically viable. In the past months, however, it was difficult for companies to think that way. If prices are depressed to the level they were, some companies are forced to cut spending and think short-term. Now, however, we are moving more and more back to a scenario in which long-term, strategic thinking is possible.
What can Norway learn from the UAE?
I mentioned earlier that both countries have highly visionary leaders. Having said that, the UAE leaders time and again demonstrate an impressive ability to put the visions into reality in a short time span. This is something Norwegian leaders can be inspired by. Processes, different assessments you have to do, ensuring you have political backing and so forth often slows down the process of making a vision a reality. Looking at the short time needed to implement new innovative ideas in the UAE can be very tempting.
What are the main goals to be accomplished by the time you are assigned to a different country?
There is a multitude of aspects I would like to see the collaboration of both countries advancing on. The environmental agenda is probably the most important of those aspects; I would quite enjoy seeing both countries demonstrate that continuing to depend on the oil and gas industry does not contradict being global leaders in promoting the global climate agenda. Moreover, I would also like to see more Norwegian oil and gas companies established in the UAE, bringing Norwegian prowess and innovation to the country. The same—of course—goes for Norway’s other sectors of excellence, such as maritime, seafood and renewables, of which companies are present here in the UAE.