The acquisition of the UK's Trafalgar House in April 1996 added another dimension to the global ambitions of Norway's Kvaerner Oil & Gas (KOG). Having earned its reputation in the oil and gas industry in the inhospitable waters of the North Sea, the Kvaerner Group has developed technologies that are sold worldwide. It now has another vehicle for projecting itself beyond its home region at a global market.

KOG's size has increased dramatically in recent years, and it now has annual turnover of $2,500 million and employs 15,000 people in 21 countries. With the greater scale and broader geographical coverage has come a leap in the company's capabilities for working internationally.

Its sights are set on the growing offshore hydrocarbons sector. Worldwide offshore expenditure is running at $80,000 million a year and is expected to rise to about $100,000 million by 2000.

KOG is acutely aware of the changing needs and conditions in the industry. Competition has been intensifying, while clients are placing ever greater demands on the engineering capabilities of their contractors. KOG president, Tore Bergersen, summed up the challenge in a recent mission statement to his staff: 'The market now wants total solutions, and this has been developing over the last few years. It is obvious that we have to answer the questions of that market, and be more proactive with our own solutions and products.'

This puts the company in a position where, as profits are squeezed, it must take on greater risks for lower rewards. Bergersen expects operators and contractors to experience difficulty striking the right balance: 'It takes time to change from one way of doing business to another - it does not happen overnight.'

KOG is expanding through organic growth and the careful acquisition of selected companies which complement its existing technologies. According to Bergersen: 'We are trying to develop the company with sustainable strategies. The acquisition of Trafalgar House has helped us in that respect, giving us a stronger position in the UK. Overall, we have a bigger resource base now than before, and it gives us a chance to take on projects outside Europe and generally take on much larger projects than before.'

Among the big schemes being pursued beyond Europe is an estimated $500- $600 million project in Angola for a production ship to process 200,000 barrels a day of oil and up to 6.5 million cubic metres of gas. The company's experience of subsea and process technologies means it can deliver complete systems for all kinds of oil and gas projects. Says Jan Tore Elverhaug, KOG senior vice-president for business development: 'Kvaerner technology produces oil and gas throughout the world, never fearing the toughest elements of nature. Large, complex offshore installations bear the Kvaerner name in the North Sea, the Arctic and the waters of the Gulf of Mexico, Asia Pacific, the Caspian, India and Africa.' That list will soon include the Middle East.

KOG won its first major Middle East contract earlier this year when it was awarded the front end engineering and design for the development of the Khuff gas reservoir in Abu Dhabi. Kvaerner Engineering is doing the work for Abu Dhabi National Oil Company (ADNOC), supported by other group companies including Kvaerner John Brown and Kvaerner Sofresid.

KOG is aware that the contract gives it an opportunity to confirm its credentials in the region.

Elverhaug says the Khuff project will be a base for further development and KOG, 'taking one step at a time,' will focus on both the offshore and onshore oil and gas business. 'Our next target markets in the region are Qatar and Kuwait. Once we have established a strong name, we will begin to spread our resources. For now we want to focus and concentrate on the job at hand.'

KOG recently won a smaller contract from Abu Dhabi Company for Onshore Oil Operations (Adco) for debottlenecking at Bu Hasa, where it will install new separators. New technology based on three phase separation instead of the traditional two phase process is being used to minimise the water cut.

Hans Petter Jacobsen, country manager for the UAE, is confident that Kvaerner is set for expansion in the region, not only because of the offshore experience but also due to its onshore skills. 'There are a number of new onshore developments coming up. We are also interested in the petrochemicals and polymer sectors.'

Local capacity should present no problem as the company office in Abu Dhabi, where detailed engineering work for the offshore side of the Khuff project is being done, boasts a team of over 100 engineers.

An underlying rationale for Kvaerner's interest in the Middle East is not hard to fathom. 'When the North Sea is empty we still will have oil in the Middle East for over 100 years,' says Jacobsen. 'To be a big international player you have to have a presence in the Middle East. We are here to stay. We have long-term plans for the region and that is why we have set up an office in Abu Dhabi with the best engineering facilities in the whole region.'