Kvaerner bags North Sea decom work

Norwegian engineering and construction services company Kvaerner has been awarded a contract from the Italian oil & gas contractor Saipem to dismantle and recycle a North Sea platform.

Kvaerner informed on Wednesday that the decommissioning contract with Saipem has a value of approximately NOK 200 million ($23.9M).

The Italian company has the main contract for the removal and disposal of the platform and is responsible for lifting the platform and transporting it to Stord, Norway, where Kvaerner will dismantle it and recycle and dispose all materials.

Kvaerner added that the deconstruction and disposal work will start with the receipt of the first units in 2017 and continue throughout 2019. The name of the platform and its owner remained unrevealed.

It is worth noting that at the end of 2016 Saipem got a contract from BP to carry out decommissioning of the topsides and jacket of the company’s Miller Platform in the UK North Sea. Saipem will use the Saipem 7000 vessel, which has a 14,000-tonne lifting capacity.

Job cuts 

Kvaerner also said on Wednesday the company plans to further simplify the organization, reduce the amount of management positions, and downsize the workforce with 40-50 employees. The aim to further reduce costs and thus strengthen its competitiveness. As a result, the company’s organizational structure will be adjusted effective from March 1, 2017.

Loss in 4Q

Kvaerner on Wednesday reported a net loss of NOK 100 million for the 4Q 2016 period, compared to a profit of NOK 146 million in the same period of 2015.

During the quarter, Kvaerner’s operating revenues dropped to NOK 1.8 billion from NOK 2.6 billion in the 4Q 2015. The company explained that lower revenues were mainly due to lower activity within operational area Process Solutions.

Order intake in the fourth quarter totaled NOK 768 million, including Kvaerner’s scope of work of jointly controlled entities, compared to NOK 1.49 billion in the same quarter last year.

As of December 31, 2016, order backlog, including Kvaerner’s scope of work of jointly controlled entities, amounted to NOK 6.46 billion. Estimated scheduling of the order backlog is approximately 80 percent for execution in 2017, with remaining 20 percent for execution in 2018 and later.

Offshore Energy Today Staff