Hammerfest and West Finnmark in Northern Norway are far from Stavanger and Oslo where decisions relating to the  petroleum industry are made. The region has been one of the most crisis-stricken regions for the last 20-30 years, with little private investment, a major drop in employment and a decreasing population.

While gas resources were discovered offshore in the nearby Barents Sea as early as 1984, the technological difficulties of developing the resources, together with unfavourable cost and market conditions, meant that it took until 1997 before Snøhvit project planning began and until 2002 before site preparations were underway.

The Snøhvit project is Europe's first export facility for liquefied natural gas (LNG). A processing plant on Melkøya island outside Hammerfest receives and processes natural gas from the Snøhvit, Albatross and Askeladd fields in the Barents Sea, 140 kilometres north-west of the plant. LNG is then shipped from Melkøya by special carriers to markets in Europe and the USA.

Costing roughly NOK 58 billion, the Snøhvit project ranks as the largest-ever industrial development in Northern Norway. To document and measure the direct and indirect impact of the project on the nearby community and region, StatoilHydro - together with Hammerfest municipality and Finnmark county authority - initiated a trailing research and monitoring project. Led and managed by the Northern Research Institute (NORUT) at the University of Tromsø in Finnmark, the research project began in 2003 in the early construction phase and will continue to measure and monitor impacts until the operating phase is well underway. In 2008, the study entered the operations phase of the project.

Visible effects

The monitoring study has begun to unravel some of the complexities of the impacts and broader "footprint" of the Snøhvit operations. So far, it is mainly the impacts from the construction phase of the project that have been assessed. Even so, the effects so far have been highly visible and noticeable, both in the community of Hammerfest and the broader Finnmark region.

• Local content generation far exceeded expectations. In the 2001 impact assessment, the value of local procurement during the construction phase was estimated at NOK 600 million. By early 2008, supply contracts to enterprises in the Hammerfest area had exceeded NOK 1.9 billion, more than three times the amount originally estimated.
• Supplier development assistance in the pre-construction phase was essential. Our early investments in mobilisation and capacity-building of local enterprises - especially our support for the Snøhvit business association, PetroArctic - played an important role in ensuring high-quality local content during the Snøhvit construction phase. 
• The development has created many jobs locally and in the region. Lessons learned, however, also indicate that the highly specialised skills needed during the construction phase were not all met through local labour supply. In fact, about 20,000 workers from all parts of the world have passed through Melkøya Island during the construction phase. This is a large number in relation to the 9,000 people living in Hammerfest, and the local workforce of about 5,000.
• Prior to the Snøhvit development, people were leaving Hammerfest, whereas in the development period, more people have moved to than from the town. Young people, in particular, are more positive to a future in the north after the Snøhvit development started.
• House building in Hammerfest has gathered headway, and house prices have increased. There are of course two sides to this coin, as rising house prices have also made the recruitment of skilled workers more difficult. One lesson from this is that it is essential that municipal housing planning processes start early enough to keep pace with labour migration processes.
• Traffic density has also increased exponentially. Another lesson learned on the less positive side is not to underestimate the impact on traffic density of large-scale investment projects and resulting general upswings in the economy.
• Overall, the level of prosperity is increasing, and living conditions have improved compared with other Norwegian municipalities around the country.
• Finally, Snøhvit has almost doubled the local government tax base. The Snøhvit plant generates some NOK 150 million per year in property taxes for the local government, which is almost the same as Hammerfest receives in central government transfers each year.    

Since 2006, drawing on our experience from the Snøhvit trailing and monitoring study, we have participated, in collaboration with the World Business Council for Sustainable Development (WBCSD), the International Finance Corporation (IFC) and other partners, in developing a framework and tool for measuring our direct and indirect impact and improving our dialogue with host communities and other stakeholders. The tool, Measuring Impact, was finalised and launched in 2008. 

StatoilHydro is committed to understanding the impacts and consequences of our actions, both on our own business and on the societies around us. To this end, we are constantly working to improve our methods and systems for understanding the broader footprint of our business. We have therefore been an active participant in developing the WBCSD Measuring Impacts framework, and are expecting to pilot the framework in some of our operations in 2009.