Aker Solutions Secures Multiple Contracts with Aker BP – Record High Order Intake

December 16, 2022 – Following Aker BP and its partners’ submission of plan for development and operation (PDO), Aker Solutions and alliance partners today sign contracts for the field development projects Yggdrasil (formerly NOAKA), Valhall PWP-Fenris and Skarv Satellites. For Aker Solutions, these projects will combined represent close to NOK 50 billion of order intake in the fourth quarter of 2022, which will be the company’s highest ever quarterly order intake. For the company, these contracts are expected to generate about 50,000 work-years including ripple effects to subcontractors and others.

Photo: Aker BP

“This record-high order intake will ensure high activity-levels and predictability at all Aker Solutions’ locations throughout Norway, as well as many of our international locations involved in these projects for years to come, in accordance with the authorities’ temporary incentive program. It also demonstrates that we are delivering on our strategy and growth targets, and through these projects, we will have the opportunity to continue developing for a more sustainable future, investing in personnel, digitalization, yard facilities and project capabilities,” said Kjetel Digre, chief executive officer of Aker Solutions.

“These contracts combined is the largest value of contract awards in a single quarter in Aker Solutions history. It demonstrates our solid track-record, strong capabilities and our ability to deliver large and complex projects with solid project execution. It is also a testimony to the success of our well-proven alliance models. Through the alliance models, we ensure win-win solutions and the best possible collaboration and resource-utilization in the execution phase. In addition, there will be strong collaboration with deliveries from other key sub-suppliers, including Worley Rosenberg in Stavanger, Leirvik AS at Stord and AS Nymo in Arendal,” said Digre.

These projects will be executed through Aker BP’s successful alliance models; the Fixed Facilities Alliance, the Modification Alliance and the Subsea Alliance, where Aker Solutions work together with partners Aker BP, Subsea 7, Siemens Energy and ABB Norway. A key element of the alliance model is to secure a significant proportion of local deliveries in the projects. Creating activity for the Norwegian supplier industry was also an important prerequisite for the temporary stimulus program adopted by the Norwegian authorities. Today’s award is an unequivocal response to that expectation and will create very large ripple effects throughout the Norwegian industry, both directly at yards and engineering offices in several parts of Norway, but also at a multitude of subcontractors, suppliers and service providers.

To safeguard project execution, as well as preparing for increased activity on upcoming renewable projects, Aker Solutions will continue to invest in employees, digitalization, yard facilities and project capabilities. The majority of upcoming investments will be at the company’s yards in Norway, to upgrade the facilities and prepare for the future. At Aker Solutions’ yard in Verdal, the company will invest in a robotized and automated production line to safeguard execution and schedules for these important projects through significantly increased productivity and HSSE performance.

Aker Solutions will also continue to strengthen its digitalization efforts through these projects. As a part of the Yggdrasil project execution, the digital collaboration project between Aker BP, Aker Solutions, Cognite and Aize will continue. This digitalization program is developing solutions for the Yggdrasil-area to improve field developments and offshore operations, with the aim to create the next generation field development model.

Yggdrasil, incl. Hugin A, Hugin B, Munin and Fulla (formerly NOAKA – North of Alvheim, Krafla, Askja, Fulla)

Topsides and Jackets

• Scope: Engineering, Procurement, Construction (EPC) and offshore hook-up of the 28,000 tons Hugin A PdQ production platform (formerly called NOA PdQ, includes production, utility, wellbay and living quarters), and its 20,500 tons steel jacket substructure. The work will be executed in the Fixed Facilities Alliance consisting of Aker BP, Aker Solutions and Siemens Energy.
• EPC and offshore hook-up of the 2,100 tons Hugin B (formerly Frøy) normally unmanned wellhead platform and its 4,700 tons jacket substructure.
• Timelines: Fabrication of the Hugin A jacket will start in the third quarter of 2023 and fabrication of the Hugin A platform topside will start in the fourth quarter of 2023. Delivery of the jacket is scheduled for 2025 and the topsides in 2026.
• Fabrication of the Hugin B wellhead platform is planned to start in the first half of 2024, with delivery of the jacket planned for 2025 and the topsides in 2026.
• Fabrication: The Hugin A topside will be assembled at Aker Solutions’ Stord yard. The platform will be the largest topside ever assembled at the Stord yard. In addition, there will be deliveries from Egersund, Verdal and Sandnessjøen, as well as subcontractor Leirvik AS at Stord. 
• The Hugin B wellhead platform and its jacked substructure will be fabricated at Aker Solutions’ yard in Verdal.
• Value: Aker Solutions will book an order intake of around NOK 22 billion related to these contracts in the fourth quarter 2022, in the Renewables and Field Development segment.

Subsea

• Scope: the complete subsea production system for the Yggdrasil field development (formerly called NOAKA), including 40 standardized vertical subsea trees, Vectus™ 6.0 based control system modules, topside control systems, nine off six-slot templates and manifolds, wellheads and associated tie-in systems. It will also include eight static umbilicals with a total length of about 90 kilometers. The work will be executed in the Subsea Alliance consisting of Aker BP, Aker Solutions and Subsea 7.
• Fabrication: will mainly involve manufacturing in Norway and Brazil, with deliveries also from UK and Malaysia, as well as subcontracting of steel templates.
• Timeline: manufacturing is planned to start in the first half in 2023 with final deliveries planned in 2028.
• Value: Aker Solutions will book an order intake of close to NOK 7 billion related to this contract in the fourth quarter 2022, in the Subsea segment.
• The subsea scope to be delivered for the Yggdrasil (formerly NOAKA) and Skarv field developments is likely to also lead to significant future subsea lifecycle service work for the company.

Valhall PWP – Fenris (formerly King Lear)

Topsides and Jackets

• Scope: EPC and offshore hook-up of the 15,500 tons Valhall production- and wellhead platform (PWP) including its 9,500 tons steel jacket substructure as well as a 1,100 tons bridge.
• The work will be executed in the proven alliance model with Aker BP and ABB Norway.
• EPC and offshore hook-up of the 2,600 tons Fenris unmanned wellhead platform and its 2,900 tons steel jacket substructure.
• Timelines: Engineering to start in December 2022. Fabrication of the Valhall PWP topside and its jacket are planned to start in the fourth quarter of 2023, with the delivery of the jacket in 2025 and the topsides in 2026.
• Fabrication of the Fenris unmanned wellhead platform is planned to begin in the second quarter of 2023, with delivery of the jacket in 2024 and topsides in 2026.
• Fabrication: The Valhall PWP platform will be assembled at Aker Solutions’ Stord yard, with fabrication deliveries from Sandnessjøen and subcontractors Worley Rosenberg in Stavanger and AS Nymo in Arendal. 
• The Fenris unmanned wellhead platform, its jackets substructure, and the jacket substructure for Valhall PWP will be fabricated at Aker Solutions’ Verdal yard.
• Value: Aker Solutions will book an order intake of around NOK 15 billion related to these contracts in the fourth quarter 2022, in the Renewables and Field Development segment.

Subsea

• Scope: manufacturing and delivery of three umbilicals with a total length of about 50 kilometers.
• Fabrication: the umbilicals will be fabricated at Aker Solutions’ manufacturing site in Moss, Norway. 
• The work will be executed in the proven alliance model with Aker BP and Subsea 7.
• Value: Aker Solutions will book an order intake of around NOK 500 million in the fourth quarter 2022 related to this contract in the fourth quarter 2022, in the Subsea segment.

Modification

• Scope: modification work of the existing Valhall field center to enable the tie-in of the Valhall PWP- and Fenris platforms to the existing facilities such as process, power and utilities. The work will be executed in the Modification Alliance consisting of Aker Solutions and Aker BP. 
• Timeline: Prefabrication work is planned to start up at Aker Solutions’ yard in Egersund starting in the fourth quarter of 2023. This will be followed by a longer offshore phase including several Turnarounds in the coming years.
• Value: Aker Solutions estimates the contract value at around NOK 2 billion and has already included this order intake in today’s separately announced award of the extended frame agreement from Aker BP in the Electrification, Maintenance and Modifications (EMM) segment.

Skarv Satellite project

Subsea scope

• Scope: the complete subsea production system for the Skarv Satellites project including 7 standardized vertical subsea trees, Vectus™ 6.0 based control system modules, topside control systems, three off four slot template and manifolds, one cluster manifold, wellheads and a large number of tie-in and connection systems. It will also include one dynamic and five static umbilicals with a total length of about 60 kilometers. The work will be executed in the Subsea Alliance consisting of Aker BP, Aker Solutions and Subsea 7.
• Fabrication: will mainly involve manufacturing in Norway and Brazil, with deliveries also from UK and Malaysia and subcontracting of steel templates in Poland.
• Timeline: Final deliveries planned during the first half of 2025.
• Value: Aker Solutions will book an order intake of around NOK 3 billion in the fourth quarter 2022 related to this contract, in the Subsea segment.
• The subsea scope to be delivered for the Yggdrasil (formerly NOAKA) and Skarv field developments is likely to lead to significant future subsea lifecycle service work for the company

Modification scope

• Scope: modification work of the existing Skarv FPSO to enable the tie-back and integration of the Skarv Satellites project, to be connected to the existing infrastructure. Aker Solutions has signed a letter of intent (LOI) with Aker BP to initiate engineering and procurement related to long-lead items for this topside modification scope, with the intention to convert to a full EPCI contract to be awarded during 2023. The scope will be executed in the Modification Alliance consisting of Aker Solutions and Aker BP.
• Timeline: The initial interim phase is planned from December 2022 until the second quarter of 2023.
• Value: Aker Solutions estimate the contract value at around NOK 100 million related to this interim phase and has already included this order intake in today’s separately announced award of the extended frame agreement from Aker BP in the EMM segment. Further to this, Aker Solutions estimates that a contract award of the full EPCI scope could be worth around NOK 2 billion, which could potentially be awarded during mid-2023.

The contracts will be formally signed in a ceremony at Aker BP’s head office today, Friday December 16, 2022. As per normal, they are subject to regulatory approvals by relevant Norwegian petroleum and energy authorities.

ENDS