Aker wins major Angola contract

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Norwegian engineering company Aker Solutions announced it had won a “landmark” contract in a message to the stock exchange on Tuesday. The contract to supply subsea systems to a project in Angola run by French oil and gas company Total is worth NOK 14 billion (USD 2.3 billion), but came just days after Norwegian politicians promised to cut oil and gas emissions after a damning UN climate change report.

An Aker Solutions subsea field layout, delivered to Statoil's Åsgard development on the Norwegian continental shelf. Under its NOK 14 billion contract with Total, Aker Solutions will provide 20 subsea manifolds and PHOTO: Aker Solutions

An Aker Solutions subsea field layout, delivered to Statoil’s Åsgard development on the Norwegian continental shelf. Under its NOK 14 billion contract with Total, Aker Solutions will provide 20 manifolds and 65 wellsets to the Kaombo development. PHOTO: Aker Solutions

“This is a landmark contract and further strengthens an important relationship with a key partner,” said Øyvind Eriksen, executive chairman of Aker Solutions in a press release. “It’s a significant commercial achievement for our subsea business as well as an important strategic development in our expansion in Angola and the broader region.”

The Kaombo Block 32 development, about 150 kilometres off the coast of Angola, is one of the largest underwater developments in the world. In its release, Aker said it would provide 20 subsea manifolds, 65 vertical subsea wellsets and associated systems and controls. The first deliveries are scheduled for the second quarter of 2015.

“It is among the largest contracts we have won,” said Bunny Nooryani, the company’s chief communications officer. She told newspaper Dagens Næringsliv (DN) it followed several years of subsea work with Total on the Moho field in the Republic of Congo. “It is a continuation of a good cooperation. This is a job that will take place over several years. It secures us work until at least 2018.”

The project management and engineering work will be done from Aker Solutions’ Norwegian headquarters at Fornebu, and production work will be done at Tranby, Stokke, Egersund and Ågotnes. Further work will be done in London and Aberdeen in the UK, and locally in Angola, where Norway’s Statoil is also active despite concerns over the potential for corruption. Aker Solutions has 130 employees in Angola and has operated in the southern African country since 1999. It has entered a joint partnership with local company Prodiaman Oil Services.

Multi-billion dollar project
Total announced its decision to develop the project on Monday, reported DN. The 16 billion dollar project will cover six of the 12 oil discoveries in Block 32, and production is expected to be underway by 2017. Total estimated the Kaombo reserves at 650 million barrels, and said the field will have a daily production capacity of 230,000 barrels of oil equivalent.

The whole project includes 59 subsea wells connected by 300 kilometres of underwater pipes, with two floating production and storage units based on the conversion of two supertankers. The associated gas will be exported to a liquid gas plant on land.

The announcement comes just days after the most damning report yet from the UN’s special panel on climate change and the rapid development of global warming. Environmentalists urged politicians and industry to leave oil reserves in the ground, and the new Conservative (Høyre) Environment Minister Tine Sundtoft promised to bring down all emissions in Norway, including in the oil and gas industry. The sheer size of the new Aker Solutions contract, however, shows how important Norway’s offshore industry can be for the local economy amidst calls for the country to reduce its involvement in and reliance on the energy sector.

newsinenglish.no/Emily Woodgate