Engineering services and construction group Kvaerner said Tuesday that strong underlying growth in the demand for energy is driving business from its upstream oil and gas customers.
The Norwegian firm said the development of the upstream engineering, procurement and construction (EPC) market was being fueled by this energy demand, which "requires and justifies an increased capital spending on the development of oil and gas fields".
Kvaerner said that new development projects this year are expected to be awarded in the North Sea and internationally. With the Norwegian Continental Shelf considered mature, with major fields developed in the 1970s in decline and smaller fields unable to offset this decline, the firm said there is "significant" exploration potential and drive in the region that has led to recent successful discoveries in the North Sea and the Barents Sea.
"Kvaerner is well positioned to take part in developing these new discoveries", said the firm in its fourth quarter results statement.
Kvaerner added that within its 'concrete solutions' business, there is demand due to more oil and gas developments in the Arctic areas and harsh environments. The firm expects to see many opportunities for jackets ahead with several prospects both in the North Sea and internationally.
During the fourth quarter, Kvaerner's operating revenues were down at $525 million (NOK 3 billion) compared with $687 million (NOK 3.9 billion) in 4Q 2010. This was a "reflection of a lower activity level within parts of the business during the quarter," said the firm.
However for the year as a whole, revenues increased slightly to $2.32 billion (NOK 13.3 billion) from $2.31 billion (NOK 13.2 billion) in 2010.
The firm's 4Q EBITDA increased to $44 million (NOK 249 million) from $25 million (NOK 145 million). EBITDA for 2011 came in at $192 million (NOK 1.1 billion) compared with 2010's $85 million (NOK 488 million).
Order intake for 4Q 2011 was (NOK 1,136 million) – a slight decrease over 4Q 2010's order intake of (NOK 1,282 million).
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