Valuable Maintenance Contracts for Christmas

Statoil awards contracts worth NOK 8 billion this December. – I would like to congratulate the entire industry, and give an extra reward to small and medium-sized companies for their substantial contribution to turning the tide, says Owe Hagesæther, head of GCE Subsea.

In a press release Statoil states that it awards new framework agreements in subsea maintenance to Aker Solutions, TechnipFMC and OneSubsea. The contracts have a total estimated value of over NOK 8 billion and last until 2023. The contracts also include options for a total of 20 years. Their estimated total value will be in the order of NOK 40 billion if all options in the estimated scope of work are exercised.

– We have created a good starting point for safe and efficient collaboration on our subsea wells on the Norwegian continental shelf, says Chief Procurement Officer at Statoil, Pål Eitrheim. – We have entered into long-term agreements that last 25 years with all options included. This leads to increased predictability and stable conditions for both the suppliers and us.

A Highly Adaptable Industry

– This is a great acknowledgement, and we at GCE Subsea would like to give the entire industry credit, says Hagesæther. – It has truly shown the adaptability we have been talking about for years – but it has not been just talk, but hard work, which is now paying off. Many jobs are now secured, and starting the holidays with this message is good for everyone. The sum of these contracts means a lot, not only for the industry, but also for our society.

– We are happy that these contracts have been secured; this is most welcome in an industry that has seen some hard times. The adaptability shown by Norwegian industries has enabled these contracts; we see a rush of contracts because the businesses have increased their competitiveness. This would not have been possible without their ability to innovate and reduce costs. This is also due to smaller businesses. The truly innovative changes have often come from smaller enterprises that have been quick to adapt.

Aker Solutions Increases Volume and Activity

– This contract is important to Aker Solutions, to ensure long-term volume and activity, and to secure jobs at Ågotnes and our location in Hammerfest. As the Johan Castberg field in the Barents Sea is part of this, we need to expand our capacity in Hammerfest, and this is good news for us, says Silje Skarstein, Senior Vice President Head of Services Norway.

–The new contracts not only secure jobs for us, but also for our subcontractors. We have world-class subsea competence in Hordaland, and it is important to keep this expertise in the region.

Some of the projects now set to be realised, were not feasible a few years ago – they were too expensive. We have cut costs through simplification and standardisation and become much more efficient. The entire industry has made a major turnaround. After a tough couple of years, our efforts now seem to be paying off.

Aker Solutions has an improvement programme called #thejourney, where we focus on becoming more cost-effective, and we believe there is more to be gained here. We will also invest in apprentices in the future – the ones we have now are very talented and do a good job for us. Together with our subcontractors we have cut costs and increased efficiency to make it possible to realise these projects. Despite continuing low oil prices, customers now dare to invest.

We hope this means that the tide is about to turn for the industry. But we still have capacity for more work; our order books are not yet full.

Metas Applauds Long-term Agreements

– This is a positive signal to the industry that Statoil is planning for the long run. We applaud them, says Kenneth Olsvik, CEO at Metas. – These are maintenance contracts and not a direct gain for us as such, but in a long-term perspective they might matter. They will need new equipment, and to find simpler and cheaper ways of transporting/installing the equipment than today, and this might have an effect on us. And of course it means a lot to the companies that already deliver to these maintenance assignments.

– The fact that Statoil now awards long-term agreements with options for up to 20 years is great news for the major businesses – it allows them make more long-term plans than before. This will improve long-term planning for staff, facilities, investments and rental contracts.

Solid Vedlikehold Is Optimistic About the Future

– I hope this means more work for us. It has been a challenge when planned projects have not been realised, and we now hope that they will carry out the projects they have planned, says Anved Aarbakke Jr, CEO at Solid Vedlikehold. – We look forward to this. We get more work to do, and are now establishing a new PTFE Coating (Xylan) facility at CCB base to increase our capacity in this segment, and try to scale up to adjust to what is happening now.

Like many others, we expanded too much during the boom years. Costs increased, and when the assignments dwindled we were left with the expenses. We chose to be honest and open about the situation we were in, towards our employees, customers and suppliers, so that everyone understood that something had to be done. We believe this has paid off. This year is one of our best years so far, partly because we were quick to turn our business around, and because we keep fixed costs down and include expenses in the projects, where they belong.

We take an optimistic view of the future. The competition is tough, but we believe that quality deliveries made on time, and keeping up with new technology are the keys to success.