BP and Aker Kvaerner Seeking Solution for Valhall Dispute

Aker Kvaerner and BP have not yet reached a financial conclusion after the delivery of the Valhall offshore platform in 2003. The limitation period in the contract with respect to claims is now coming to an end. With reference to this formal deadline, Aker Kvaerner and BP have exchanged writs to an arbitration tribunal. In parallel, the parties will continue their direct dialogue aiming at reaching an agreement.

Aker Kvaerner upholds the already made claims on approximately NOK 650 million for compensation of extra work to BP under the contract, while BP is claiming approximately NOK 550 million as compensation for costs incurred as a result of the pile refusal and liquidated damages for the delay. Aker Kvaerner's assessment is that the dispute will have no financial effect on the accounts.

Aker Kvaerner has previously informed about the dispute in the annual reports for 2003 and 2004. Note 15 from the annual report for 2004, says:

A subsidiary entered into a contract with BP for the procurement and construction of the jacket for a water injection platform on the Valhall field in the North Sea. The installation was delayed due to pile refusal, and rectification work was necessary to complete the installation. The jacket was successfully installed in August 2003. BP has reserved the right to claim back the additional costs related to rectification work if it is determined that the pile refusal was caused by circumstances falling under the group's scope of liability. In addition, BP has reserved the right to claim penalty payments as a result of delayed delivery."

Although the parties have exchanged writs to the arbitration tribunal as the agreed next step in a formal process, the parties will continue the negotiations to find an amicable solution.