Kvaerner's comeback set in concrete

June 8, 2011

A decade after acquiring Kvaerner, Aker Solutions is preparing a demerger that will spin the company off as a separate, fully fledged EPC contractor – with concrete gravity base structures (GBS) very much on its agenda.

Legacy company Norwegian Contractors was the dominant player as North Sea operators populated Norwegian and UK waters with giant Condeep and other concrete platform design variants, starting with the Ekofisk Tank in 1973 and culminating in 1995 with the daddy of them all, the Troll A gas platform. Aker has continued since to make occasional forays into GBS territory, albeit on a smaller scale and with designs markedly different to the Condeeps, most notably putting concrete to work in the challenging Russian far east environment, first on the Sakhalin II Lun-A and PA-B platforms (OE January 2005, August 2006) and latterly on Sakhalin I A-D.

Interestingly, although his last job was running Qatar Aluminium, the engineer chosen to head up the ‘new and focused' Kvaerner is himself no stranger to concrete structures. Jan Arve Haugan, who will take the reins as president and CEO on 1 August if not sooner at a fixed annual salary of NKr4.5 million, began his professional career in the Norwegian construction company F Selmer, one of the founding fathers of Norwegian Contractors and now part of Sweden's Skanska group. In 1991 he joined operator Norsk Hydro as chief engineer for the Oseberg field development, which has a sizeable GBS at its field centre core. He later figured prominently in many of Hydro's oil and gas projects and operations before re-joining its aluminium business as head of technology and global smelter operations following the demerger of Hydro's oil and gas operations.

Aker Solutions executive chairman Øyvind Eriksen said of Haugan's appointment: ‘We have been searching for an executive with broad experience from EPC projects, a deep understanding of the North Sea market and a strong base among international clients. Haugan's background and experience correspond well with this profile.'

‘I have had the pleasure to work with both Aker and Kvaerner in past Hydro projects and I know well what they stand for,' Haugan declared.

The new Kvaerner will be looking to leverage its inherent experience and expertise for wide-ranging EPC opportunities, whether offshore or onshore, concrete or steel. In its mission statement, the company says it will ‘focus on executing some of the world's most demanding projects as the preferred partner for upstream and downstream oil and gas operators, industrial companies and other engineering and fabrication providers'.

The concrete track record is sure to be among its key selling points, however. At OTC last month, Stein Rasmussen, who becomes Kvaerner's chief technology officer in June having previously served as Aker Solutions' president of energy development & services in Houston, responded enthusiastically to the suggestion that the industry tide may be turning again to Condeeps and their ilk.

‘This is a part we see a lot of interest in, especially recently, and we are actively involved in such projects,' Rasmussen told OE. ‘In the Arctic environment and also for very large fields with lifespans requiring special maintenance considerations, concrete is a material that we expect to have a strong renewed presence in the marketplace.'

Final approval for the demerger came through at Aker's 6 May annual general meeting, and the plan now is to have Kvaerner separately listed on the Oslo stock exchange, most likely in July, and for Aker to remain a major investor.

Jim Miller, the current president and CEO of Aker Philadelphia Shipyard who this month assumes the role of Kvaerner executive vice president Americas, co-hosted an OTC press conference with Rasmussen to explain the company's new business concept.

Miller called the demerger ‘a natural evolution that's a reflection of the times,' with more complex global oil & gas projects requiring advanced EPC contracts.

‘We're an EPC contractor – we have very defined markets,' he added. With the divestment of Kvaerner and the sale of its primary processes and construction businesses to Jacobs Engineering Group earlier this year, Aker will be able to focus more on its core subsea capabilities, Miller said.

The Kvaerner spinoff creates ‘a focused EPC company' at a time when operators are taking on increasingly complex E&P projects, Rasmussen noted. ‘We all know that the new finds are increasingly made in deeper water and harsher environments and also with more complex reservoirs,' he said. ‘All this leads to the need for more technology and more complicated project [execution].' OE

FLASHBACK TO THE GOLDEN AGE OF OFFSHORE CONCRETE: How cartoonist Charles Griffin and OE's December 1983 cover saw the daunting challenge of building and installing the 678,500t, 472m high GBS of Norway's Troll gas platform – then still 12 years from commissioning (OE September 1995). For greater flexibility in topside and riser layout, the Norwegian Contractors Condeep T300-type design on which Griffin's cartoon depiction was loosely based would eventually give way to the SP variant (inset above) with very deep (35m) skirt.

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