Bloomberg News

Aker Solutions Wins 10-Year Deal to Develop Norway’s Sverdrup

December 20, 2013

Aker Solutions ASA (AKSO) won a framework contract for Statoil ASA (STL)’s Johan Sverdrup field, the biggest oil discovery off Norway in decades, including a 650 million-krone ($106 million) deal for engineering design.

The 10-year agreement will be for engineering services, procurement and management assistance, the Oslo-based company said today in a statement. It didn’t give an estimate for the total value of the framework deal.

“The contract will define Aker Solutions for years to come,” Executive Chairman Oeyvind Eriksen said in the statement. “The Johan Sverdrup field is one of Norway’s largest offshore oil discoveries and of huge importance to both our company and the country’s oil and gas industry.”

Aker Solutions this month toned down its focus on earnings targets amid rising costs and growing competition, as some of its oil industry clients trim spending to protect cash flows. The company, whose largest shareholder is billionaire Kjell Inge Roekke, has sold assets for 5.4 billion kroner over the past two months to boost profitability.

Discovered by Sweden’s Lundin Petroleum AB (LUPE) and Statoil in 2010 and 2011, Sverdrup renewed optimism in Norway’s oil industry after a decade of falling crude production from aging North Sea fields. The find may be Norway’s biggest since Statfjord in 1974 and will become the country’s largest crude-producing field when it reaches peak output in the next decade.

Value Creation

“The value creation from the Johan Sverdrup field will be significant for the partners and for Norwegian society,” Oeystein Michelsen, Statoil’s head of development and production in Norway, said in a separate statement. “In addition it will contribute substantial activity for the oil and gas industry — including the supplier industry.”

Aker Solutions gained (AKSO:US) 2.8 percent to 103.3 kroner in Oslo today.

Even so, Statoil, Norway’s biggest energy company and Sverdrup’s largest owner, also today delayed production start by a year to the end of 2019 and cut resource estimates to 1.8 billion barrels to 2.9 billion barrels of oil equivalent. That compares with a prior range of 1.8 billion to 3.6 billion barrels.

Investments in the first phase of the development could reach 130 billion kroner, according to Det Norske Oljeselskap ASA (DETNOR), another partner in the field.

To contact the reporter on this story: Mikael Holter in Oslo at mholter2@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net


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