OSLO (Reuters) – Norway’s Aker Solutions and Kvaerner are teaming up with Samsung Heavy Industries to jointly build floating production, storage and offloading vessels (FPSOs) for the oil industry, Kvaerner said on Thursday.
Facing a sharp decline in revenue and earnings in 2020 as some major oilfield development projects end, engineering firm Kvaerner this year said it would seek to broaden its revenue streams and drive down the costs of building oil production vessels.
Kvaerner and Aker Solutions are both controlled by Norway’s Aker ASA.
FPSOs are typically deployed in smaller or medium sized oilfields, or in hard to reach locations, where platforms that are fixed to the seabed are less suitable.
The consortium plans to cut the cost of construction by having Samsung’s yards build hulls for FPSOs while Kvaerner and Aker Solutions will make topside production systems.
The two Norwegian firms have built six FPSOs together with various partners, and are currently involved in a seventh, which is due to begin oil production in 2022 at Equinor’s Castberg field in Norway’s Arctic region.
Kvaerner said in September that it wanted to standardize the manufacturing of FPSOs, creating a factory-like process to drive down costs, but did not announce any partners at the time.
“The partners have identified several prospects for FPSO field developments which may be started in the coming years, especially in the northern hemisphere,” Kvaerner said on Thursday while presenting its strategy for the next four years.
“The combined capabilities of three of the world’s leading contractors provide a competitive offering, which has been received positively by potential customers,” the company added in a statement.
Kvaerner said it expects revenue in its key field development segment to shrink by a third in 2020, to around 6 billion Norwegian crowns ($655 million), while reiterating its goal of revenue of more than 10 billion crowns in 2023.
Reporting by Terje Solsvik; editing by Jason Neely
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