A Russian fishing vessel is slowly being towed towards the repair yard at Kimek shipyard in Kirkenes. At the quay, a number of fishing boats are lined up. Some need repairs, others have come to deliver their catch, often consisting of red king crab.The Russians choose to buy their services here, in Finnmark's easternmost town, where there is less red tape and deliveries are more predictable than in their home country.
Moreover, the fjord is deep and ice-free. The boats along the quay are mainly fishing vessels, but the dream of larger vessels – such as rigs and tankers – is very real in Kirkenes.
«Our repair yard, which was built in 1995, was in fact been designed for platform modules,» says Greger Mannsverk, CEO of Kimek.
15 years have passed and we have not seen as much as a platform leg. The oil industry has made its foothold further west in Finnmark, but a 40-year-old territorial dispute between Norway and Russia meant that the oil companies had to keep their exploration rigs well away from the eastern part of the Barents Sea.
Now, however, the groundwork has been laid for a flourishing oil industry in the region, as this spring the two neighbouring countries reached an agreement on where the border should run.
Mannsverk of Kimek is now hoping the politicians and oil companies will leave Lofoten alone and direct their attention northeast. So does Trond Dahlberg of Sydvaranger Eiendom (real estate), owned by shipowner Felix Tschudi. Tschudi has been preparing for an oil boom for years.To be sure, not much oil has been discovered on the Norwegian side of the border, but the Russians have the Shtokman gas field.
«Kirkenes will become the main centre of transportation and logistics and the town will play an important supplementary role in the Russian oil activities,» Tschudi says, who started investing in Kirkenes and later on in Russia in the early 1990s.
Tschudi is also responsible for the reopening of the Kirkenes mines. The investment gave him access to large port areas.
«Kirkenes is as close to the Russian gas field Shtokman as Murmansk is.During the Cold War, the potential was not developed, but this is our chance,» says Trond Dahlberg,
Tschudi's man in Kirkenes, looking down over the Bøke Fjord to a Multiconsult vessel.
The seabed of the deep fjord is now being surveyed. In a few years' time, Tschudi hopes to see supply ships, tankers and rigs finding their way up the fjord to the Slambanken base area. The development plans for a large oil base are ready.
Kimek Offshore is also well prepared.
«We took part in the construction of the Gjøa platform and the rigs «Aker Barents» and «Aker Spitsbergen», and we commuted to and from Melkøya Island. Now we are ready to
embark on tasks in our home town,» says Rune Johansen, Administrative Manager of Kimek Offshore.
The company was established in 2000 with the expansion of the petroleum activities in the Barents region in mind, but for now the employees commute to Aker Stord.
About 70 of the company's 130 employees are Russian. In Kirkenes they have been cooperating with the Russians for a long time, even some of the street names are in Russian. Here, people will never forget who liberated them from the Germans in 1944, and the belief in a Norwegian-Russian oil collaboration is strong.
«We are familiar with the Russian way of doing business and Russian culture,» says Trond Haukanes, Business Developer of Kimek Offshore. His business card is in Russian.
«I know enough Russian to get me into trouble, but not out of it,» jokes Hakanes.
In the town hall, there is also much talk about Russia, and about oil. Since the mines were closed in 1997, the NOK 120 million readjustment package has helped the municipality prepare for the oil industry. Everyone hopes that the Shtokman development will have a trickle down effect on Sør-Varanger.
«With oil and gas in the neighbourhood, more skilled labour jobs will be created in the region and the population will increase,» says Mayor Linda Beate Randal of the Norwegian Labour Party.
Rune Rafaelsen, General Secretary of the Norwegian Barents Secretariat, says that the border agreement is the most important cross-border collaboration ever achieved by Norway.«Norway is uniquely positioned to take part in the economic growth in the east. Western companies will not invest in Russia until the border has been set. A speedy ratification of the agreement will get the seismic companies going,» he says.
Sydvaranger Eiendom is not waiting around. The company is in the process of bidding for the rights to become the main base for the Shtokman field. In future, the base will also supply oil or gas fields on the Norwegian side of the border. Basing the business activities on only one future Russian decision is not very forward-looking.
«This is why a border agreement is so important. A well-established relationship with our neighbours opens the way for a Norwegian oil project in the eastern part of the Barents Sea,» say Mayor Randal.
Arvid Ahlquist, General Manager of the Fishermen's Association for the North of Norway, is not quite as optimistic.
«We are worried that an increase in oil activities in the border area will have a negative effect on fishing activities. We are particularly concerned about the capelin fisheries. The capelin's life cycle is very short and vulnerable to external factors such as seismic shooting. ”We will, however, enter into a dialogue with the oil companies and the Norwegian Oil Directorate in due course,» he says.
In Kirkenes, they hope this will be sooner rather than later. The main road to Russia is now being upgraded for NOK 270 million. Good infrastructure is vital for the collaboration with the town's neighbour to the east. In Kirkenes, there is no doubt that oil and gas will be discovered in the eastern part of the Barents Sea.
The fact remains that no one has drilled in the long contested waters. The Barents Sea is far less explored than the rest of the Norwegian Shelf.
«We do not have sufficient data from the disputed area. But the conditions for oil and gas are there,» says NPD's Exploration Director Sissel Eriksen.
Eriksen does not want to speculate about what might be hidden below the seabed on the border with Russia, nor does Helge Lund, CEO of Statoil.
«But we are keen to explore the area,» Lund says.
«We will have to hurry with care. The agreement will first be discussed by the two parliaments, the Norwegian Storting and the Russian Duma,» said Minister of Foreign Affairs Jonas Gahr Støre after the agreement with the Russians had been signed.
The mayor of Kirkenes hopes that a Norwegian company will discover oil or gas.
«But regardless of who finds it, some business will trickle down to us,» she says.
«We cannot sit on the other side of the border and wait for the Russians to start exploring,» says port developer Dahlberg as he stands looking out over the Bøke fjord, still dreaming about exploration rigs and tankers.
In another Finnmark town further west, Mayor Alf E. Jacobsen (Norwegian Labour Party) is enjoying his own view from Salen Mountain. As opposed to Dahlberg in Kirkenes, Jacobsen can rest his eyes on a tanker with red spherical tanks waiting for gas from the Snøhvit field.
He has panoramic views over the LNG plant at Melkøya Island, and from the top of the mountain he sees new schools and kindergartens, and the pride of Hammerfest; the new culture centre.
Most of it has been financed by loans. With a debt of NOK 2 billion, the municipality is one of the most heavily indebted municipalities in Norway.
«We started borrowing long before the Snøhvit gas was brought onshore. We had to modernise to attract people to the town,» the Mayor says.
A poor fishing village has now become a modern industrial centre. The population is growing and becoming increasingly younger. The mayor is not concerned about the high debts. The annual property tax in Melkøya is NOK 154 million. Tax revenues will continue to pour in as long as the Snøhvit gas flows through the 140-kilometre long pipeline to Melkøya. Probably up to 2035. Timescale
It may take just as many years before Dahlberg in Kirkenes gets to see rigs and tankers in the Bøke fjord.
More than 20 years passed from the moment gas was proven at the Snøhvit field outside Hammerfest until the gas made it onshore.
For the time being, nobody knows for sure what is hidden below the seabed in the easternmost part of the Barents Sea, outside Kirkenes, the gateway to Russia.