Aker Kværner business plan targets international markets

April 1, 2003
The new business model rolled out late last year by Aker Kværner provides clear proof of the company's commitment to the international market.

The new business model rolled out late last year by Aker Kværner provides clear proof of the company's commitment to the international market. The group is now divided into six business areas, three of which are based in Houston.

"The future is very much linked to international opportunities – we need to further increase our focus on global markets," says President and CEO Helge Lund. "At the same time, we want our products to be more visible, and to have hands-on involvement of the top management, so we have eliminated some management layers."

Aker Kværner offers experience in offshore and onshore projects, extensive engineering capability, a range of development solutions, particularly in floating production technology, and subsea technology and products.

Houston is becoming one of the group's major hubs for international operations. The business areas based in Houston include Oil, Gas, and Process International; Subsea and Oilfield Products; and Engineering and Construction Americas. The establishment of a heavy presence in Houston has been well accepted by clients, Lund says.

Aker Kværner is already an internationally diversified operation. About 35% of its total revenues of $3 billion come from North America, 25% from the EU region, and a further 25% from Norway. Looking at its main hubs, it has some 1,500 staff in Houston, 1,000 in Singapore and 1,300 in Oslo. And in Lund's view, Norway is not where future growth is likely to take place either.

"We anticipate that our revenues in Norway will decrease proportionately as there will be fewer big field development projects," he says.

A model for the company's international oper- ations is Husky's White Rose project off Canada,
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Implementation of the new business model will, it is hoped, mark an end to the turbulent times that saw Kværner saved from bankruptcy by merging with Aker Maritime last year to form Norway's largest contracting group. During the period of upheaval, a big effort was made to keep clients informed and involved. The process seems to have worked. In Norway, for example, the group continued to win important contracts, including EPC assignments for the Kristin production platform and subsea facilities, and two regional maintenance and modifications contracts, all for Statoil.

For the global market, Aker Kværner sees its role mainly as offering advanced products and technologies, solutions/engineering and project execution – the company is proud of its well-tested project execution model. It is also in favor of partnering, whether with local companies or other contracting groups offering complementary skills and services.

A model for the company's international operations is Husky's White Rose project off Canada, where in partnership with Pieter Kiewit it has the EPC contract for the FPSO. Aker Kværner is responsible for engineering the unit and providing project management.

Like other contractors, Aker Kværner has been concerned at the level of risk which some clients expect their contractors to take on. Assessing risk and reward is a key focus for the company, according to Lund.

"We'll continue to take lump-sum, turnkey contracts," he says, "as long as we know the client, know the solutions, know the technology, and are in a position to assess the risk."