Norway: Statoil Signs Frame Agreements Worth $7.6 B

Statoil is entering into frame agreements involving maintenance and modification work valued at NOK 49 billion (USD 7,6 billion), options included.

The agreements, which have duration of four years with two two-year extension option, will occupy more than 5,000 people during the period.

Five companies have given their assent to the letters of intent sent by Statoil on behalf of the licence partners in question. These companies will carry out maintenance and modification work on all of Statoil’s installations on the Norwegian continental shelf in the coming years.

The agreements also apply to the land facilities on Sture and Melkøya, as well as Kårstø and Kollsnes where Statoil – in its capacity as technical service provider – is signing agreements on behalf of the operator, Gassco.

These five companies are:

* Aibel AS

* Aker Solutions AS

* Reinertsen AS

* Fabricom AS

* Apply Sørco AS

Norwegian Continental Shelf

More diversity

Statoil has increased the number of its maintenance and modification work suppliers from three to five.

“The award of the contracts shows that our strategy of increasing diversity, competition and flexibility in this market has been a success,” says Anders Opedal, senior vice president of procurement in Statoil.

The process leading up to the award of the contracts has placed particular emphasis on health, safety and the environment. In addition, it has been Statoil’s intention to ensure flexibility in order to utilise capacity on the supplier market.

“By means of increased competition and the introduction of new suppliers, we believe that we can improve delivery quality while managing to maintain the right cost level,” says Opedal.

It is the first time Statoil enters into this type of agreement following the merger with the oil and energy division of Hydro in 2008.

Although previously there were several different types of agreement, they have now been standardised. This will enable Statoil to follow up the contracts in a more streamlined manner.

”The maintenance and modification agreements are extremely important for Statoil’s operations. We expect these suppliers to give both our offshore and land-based plants good quality and regularity,” says Øystein Michelsen, Statoil’s executive vice president for Exploration and Production Norway.

Frame agreements:

Aibel AS

* Statfjord A/B/C

* Oseberg F/C/Ø/S

* Huldra/Veslefrikk

* Njord A/B

* Kristin

* Norne

* Snøhvit

Aker Solutions AS

* Snorre A/B

* Gullfaks A/B/C

* Visund

* Åsgard A/B

Reinertsen AS

* Troll A/B/C

* Heimdal

* Grane

* Heidrun

Fabricom AS

* Sleipner

Apply Sørco AS

* Kvitebjørn

* Brage

Aibel AS

* Kollsnes**

* Kårstø**

* Sture

Complete portfolio:

Estimated total value for 4-year contract period:*NOK 24 400 mill.

Estimated total value for 4-year contract period + 2 x 2 year options:* NOK 48 800 mill.

*) These are frame agreements and provide an estimate of how much Statoil will spend in buying services from these companies in the coming years. The amounts are not fixed.

**) Statoil fulfils the role of Technical Service Provider on behalf of Gassco, the operator.

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Source: Statoil, June 30, 2010: