Sverdrup fuels oil fortunes again

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Norway’s huge new Johan Sverdrup oil field has once again revived sagging spirits in the country’s oil and offshore industry. Just a day after release of the state budget, with its billions earmarked for new job creation, Sverdrup has secured as many as another 1,500 jobs on its own.

The third of four substructures for the Johan Sverdrup oil installation will also be produced here at Kværner Verdal, northeast of Trondheim. PHOTO: Kvæner

The third of four substructures for the Johan Sverdrup oil installation will also be produced here at Kværner Verdal, northeast of Trondheim. PHOTO: Kvæner

That became clear after Norwegian industrial firm Kværner won its third major contract Thursday tied to the Sverdrup oil field’s development. Kværner’s Verdal plant will now produce the steel substructure for three of the oil field’s four platforms, in addition to one of its topsides. The new contract is worth around NOK 1 billion and will secure hundreds of jobs within engineering, procurement and construction.

Norway's new Johan Sverdrup oil and gas field, located around 140 kilometers off Stavanger in the North Sea, represents a huge new source of wealth. Its environmental impact seems to be of secondary consideration. ILLUSTRATION: Statoil

Kværner will now be producing the steel substructures (shown in yellow in this illustration) of at least three of the Johan Sverdrup oil and gas field’s four platforms. The fourth contract hasn’t been awarded Statoil yet. ILLUSTRATION: Statoil

The engineering work will be carried out at Kværner’s offices in Oslo and is due to start immediately, according to the company. The project’s management will be based at Kværner’s plant in Verdal, northeast of Trondheim.

“There were lots of happy people arriving at work today,” Kværner’s information chief in Verdal, Tove Strand Trana, told Norwegian Broadcasting (NRK). “It’s a fantastic start to the day, when we could announce that we’d won this contract.” She planned to serve cake to all workers during lunchtime.

Here's Kværner's own drawing of the substructure. ILLUSTRATION: Kværner

Here’s Kværner’s own drawing of the substructure. ILLUSTRATION: Kværner

The contract means that all of Kværner Verdal’s employees will have work to do through the summer of 2018. The contract itself was said to secure around 500 jobs, with ripple effects expected to generate another 1,500 jobs related to the actual production, which involves engineering, purchasing and fabrication.

Oil Minister Tord Lien, who has long sung the praises of the Johan Sverdrup oil field project, was predictably delighted and proud that a Norwegian company outbid its international rivals to snare the new contract.

“It’s important for the company, its employees, the region and the country that a company like Kværner Veral is competitive and wins contracts that contribute to jobs for many,” Lien said.

The minister has promoted the Johan Sverdrup field development as a ray of light in the shadow of the dive in oil prices that sent Norway’s oil and oil supply businesses into downsizing mode last year. Many companies have since cut way back on investment and new projects, while oil revenues into state coffers have sharply declined. The Sverdrup field, discovered just a few years ago when it was still known as the Avaldsnes/Aldous field, has huge oil and gas reserves, however, and is relatively reasonable to develop because of its North Sea location not far off the coast of western Norway. Lien ranks Sverdrup, run by Statoil with several field partners, as the biggest industrial project in Norway in several decades, yielding great possibilities for many suppliers. Lien has also worked to settle disputes over ownership stakes in the field.

Kværner’s victory in snaring the important contract “shows that Norwegian suppliers have come to grips with cost challenges, and can prevail amidst sharp international competition,” Lien added. “That bodes well for the future.”

newsinenglish.no/Nina Berglund