Statoil Awards $590 Million Njord A Platform Project

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Statoil has awarded one of the largest engineering, procurement, construction (EPC) contracts in the European oil and gas sector worth in excess of 5 billion Norwegian Kroner (NOK) ($590 billion).

Kvaerner ASA (Oslo, Norway) has secured a contract worth roughly 5 billion NOK ($590 million) for the upgrade of the Njord A platform in the Norwegian Sea. The floating steel platform, with an integrated deck equipped with drilling and processing facilities as well as living quarters, is now in dry dock. Deployed in 1997 at the Njord A field, it was due to have an operational lifespan of 16 years, but remaining resources in the Njord area have led to the need for restructuring the facility to continue production until 2032.

Within the contract, Kvaerner has subcontracted Aker Solutions ASA (OSE:AKSO) (Fornebu, Norway), in a deal worth 1 billion NOK ($118 billion) to work with Kvaerner on the EPC work.

"The Njord partners have reached an important milestone in the process of upgrading the Njord A platform for further production," said Torger Rød, head of project development at Statoil. "I am very pleased that we today can sign this contract with Kværner here at Stord. The contract will create around 3,000 man-years of employment. The Njord A platform was towed to Kværner's yard at Stord in August 2016, and was moved into the dry dock in December last year. The work to be performed now is essential to successfully resuming safe and efficient operations from the field and being a hub for future tie-in of new fields."

The platform will stay in the dry dock until the autumn of 2017 for extension and reinforcement of the hull. It will then be moved to the quay-side for further reinforcement and upgrading work in the period up to the delivery in 2020.

"This is one of the most important contracts in the market this year," added Jan Arve Haugan, president and chief executive officer of Kvaerner. "Although we know the Njord platform well from the time when we constructed it, this is an untypical project, as it is an upgrade job involving removal of old equipment and materials in parallel with fabricating and installing new ones."

"This is the largest offshore platform in Norway to have been brought to shore for a total upgrade," said Luis Araujo, chief executive officer of Aker Solutions.

Total production from the Njord field is expected to be 450 million metric barrels of oil equivalent (mmboe), while its residual production is estimated to be 180 mmboe. The field's original total production estimates were 200 mmboe at the time of its development in 1996, but has more than doubled due to additional resources from the Hyme field and the Snilehorn discovery (66 mmboe).

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