Oil Services Firm Kvaerner Finalizes $262M Statoil Contract


SANDEFJORD, Norway, Jan 20 (Reuters) – Norwegian oil services firm Kvaerner finalised a 2 billion crown ($262 million) platform contract with Statoil on Tuesday, part of a 3 billion crown framework deal agreed in June, in one of its biggest orders in years.

Kvaerner said it signed an order to build a jacket, or steel frame that stands on the sea bed and supports the platform deck, for Statoil's Johan Sverdrup field, the biggest North Sea development in decades.

Kvaerner, which specializes in big industrial structures, has lost several key contracts to Asian competitors in recent years as its costs have risen sharply, and the firm won the Sverdrup contract after a string of cost cutting measures.

The original framework was for two jackets and under Tuesday's deal, Kvaerner agreed to deliver the riser platform jacket in the summer of 2017.

"The overall amount of 3 billion crowns described in the letter of intent, still stands," Kvaerner CEO Jan Arve Haugan told Reuters.

Haugan said the firm had now finalised the design and could conclude the contract for the second jacket, for the drilling platform, in June.

Johan Sverdrup is expected to start up in late 2019.

The deal is also a boost for Kvaerner's Norwegian yard in Verdal, which was facing cutbacks as it was running out of work.

Kvaerner shares, which are down 24 percent over the past year, were up 1.5 percent on Tuesday, just ahead of the 1 percent rise on the European oil and gas index.

(Reporting by Joachim Dagenborg and Balazs Koranyi; Editing by Terje Solsvik and Mark Potter)

Copyright 2016 Thomson Reuters. Click for Restrictions.


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