Reuters logo
UPDATE 1-Kvaerner and KBR win $840 million Statoil rig construction deal
June 8, 2015 / 6:32 AM / 2 years ago

UPDATE 1-Kvaerner and KBR win $840 million Statoil rig construction deal

(Adds detail, quote)

OSLO, June 8 (Reuters) - Norway’s Kvaerner has won a key platform construction contract from Statoil, securing another deal for a Norwegian oil services sector that has struggled for years with high costs and cheaper competition from Asian rivals.

Statoil asked Kvaerner and KBR to design and build a 19,000 tonne top for one of its platforms at the Johan Sverdrup field in the North Sea in a deal worth 6.7 billion crown ($843 million), the companies said on Monday.

Kvaerner had previously said that winning the contract was vital because its orderbook was slowly dwindling after energy companies had stopped or cancelled many projects amid the oil price slump.

“So far the Norwegian supplier industry has won the main Johan Sverdrup contracts,” Margareth Oevrum, Statoil’s technology, projects and drilling chief said. “It is good to see that Statoil and the suppliers jointly are about to break the cost curve to ensure competitive force in a tough time for the whole industry.”

Worth nearly $30 billion, Sverdrup is the costliest North Sea project ever and holds up to 3 billion barrels of oil equivalents. Once it is fully running in the first half of the next decade, it could account for a quarter of Norway’s oil and gas output.

Statoil has struggled with rising costs and warned Norwegian businesses that they needed to cut prices or it would continue to give key contracts to foreign rivals.

But companies such as Kvaerner, Aker Solutions and Aibel have won the biggest Sverdrup contracts so far, suggesting that prices have been cut and Statoil remains keen to work with local suppliers.

Kvaerner and KBR will design and build the 560-bed living quarters and the utility module for Sverdrup at yards in Norway, Poland and Sweden. The modules with be assembled in Norway, with completion due in the first quarter of 2019 and the field due to start operations later that year. ($1 = 7.9495 Norwegian crowns) (Reporting by Balazs Koranyi; Editing by David Goodman)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below