Kvaerner Receives Extension for Australian FPSO Contract

Kvaerner announced that its Perth-based operations and maintenance specialist unit, Kvaerner Facilities Management (KFM), has been awarded an extension to its existing contract from Woodside Energy Limited. The integrated services contract covers the operation support, maintenance, integrity and engineering for the Northern Endeavour oil producing FPSO Facility, located in the Timor Sea, offshore North West Australia. The contract has been extended for a further two years until November 2004, with a continuance value of approximately AUD 40 million (US$20 million).

KFM, part of Aker Kvaerner, the oil and gas business area of Kvaerner, worked with Woodside to establish the maintenance and engineering systems during the design phase of the FPSO project and now manages and executes this program for Woodside. The contract is a performance based, out-sourced type, employing some 40 people in Western Australia and Darwin.

Operations Director, KFM Australia, Tony Ramshaw commented; "This is a unique contract for Woodside in that Kvaerner's incentive scheme is directly tied to Woodside’s own performance targets – not just the contractor’s element. It is a model contract demonstrating the value that a contractor can bring to an operator when services are out-sourced. It really focuses the Kvaerner team to strive for the best result for Woodside. The decision to extend our contract over six months before it was due for renewal is a clear recognition of our performance." Ramshaw concluded: "Another first for Woodside is that Kvaerner's Head of Engineering & Maintenance has deputized for the Woodside Asset Manager during the project. This and Woodside's own internal audits have confirmed the excellent working relationships and team spirit that exists between Kvaerner and Woodside."

Kvaerner's contribution has been significant in the level of results achieved for the Northern Endeavour since coming on stream in November 1999: First year availability was 96%, a new world benchmark for an FPSO. Almost 100m bbl of oil has been produced to date. Very high standards for Health, Safety and Environment have been set. KFM has won a number of engineering and maintenance 'excellence' and safety awards over the past two years due to the quality of service provided.


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