Equinor ties up long-term maintenance, modifications needs offshore Norway
Last week Equinor confirmed 12 new framework agreements with seven companies to provide maintenance and modifications for offshore installations and onshore facilities in Norway.
The initial five-year deals, all of which take effect in the first half of this year, include options to extend by up to five more years. Total value to the suppliers is about NOK10 billion (US$994 million) annually.
“Our ambition is to maintain a high production level and predictable energy deliveries to Europe towards 2035. At the same time, the shelf is entering a mature phase that will require new solutions. To succeed, we must, together with the supplier industry, find new ways of working that strengthen our competitiveness.”
—Kjetil Hove, EVP for the Norwegian Continental Shelf, Equinor
Equinor expects the long-term collaborations to support its goal of sustaining its Norwegian production at about 1.2 MMboe/d through 2035. This will involve annual investments of NOK 60 billion to NOK 70 billion annually (US$5.96 billion to US$6.95 billion).
Along the way, the company plans to drill about 250 exploration wells and 600 wells for improved recovery; conduct 300 well interventions/year; implement about 2,500 modification projects; and sanction more than 75 subsea developments for tie-ins to existing offshore infrastructure.
Another goal is to cut greenhouse-gas emissions by close to 50% by 2030 (compared to 2015 figures).
Companies awarded maintenance and modifications contracts for installations on fields on the Norwegian Continental Shelf (NCS) are as follows:
- Aibel: Sleipner, Gudrun, Draupner, Gullfaks, Visund, Oseberg, Martin Linge, Aasta Hansteen, Norne, Johan Castberg and Snøhvit;
- Aker Solutions: Johan Sverdrup, Grane, Troll, Kvitebjørn, Valemon, Kristin, Åsgard, Heidrun and Njord; and
- Wood: Snorre A&B (which the company has supported since 2016).
For maintenance and “simple” projects for selected installations on the NCS, the designated contractors are:
- Rosenberg Worley: Sleipner and Johan Sverdrup;
- Head Energy AS: Gullfaks, Oseberg and Troll; and
- IKM Gruppen: Åsgard and Heidrun.
DeepOcean secures IMR contracts from Equinor, Var Energi
Last month, Equinor also granted DeepOcean an extension to an existing frame agreement covering the provision of subsea inspection, maintenance and repair (IMR) services in Norway.
Under the new workscope, DeepOcean said it would deploy specialist IMR vessels (including the newbuild REM Ocean, due to be delivered next year); perform a wide range of subsea services into 2027; and provide onshore engineering and project management services for various subsea operations, managed from its offices in Haugesund and supported by its remote operations center at Killingøy.
The new agreement should extend the IMR collaboration, which began in 2005, to 2035.
Another Norwegian offshore major, Vår Energi, has awarded DeepOcean a new five-year IMR frame agreement that runs until the end of October 2030, with options to extend by up to four further years.
It includes subsea IMR for all Vår Energi’s operated assets on the NCS; project support for offshore modifications, installation, commissioning and drilling operations; and provision of associated project management and engineering services.
The two companies have collaborated for more than a decade. The work plan going forward includes the use of uncrewed remote vessels and onshore remote operation centers to support future IMR operations.
Wood to maintain Equinor's Snorre offshore Norway assets
Earlier this week, Wood secured two five-year framework agreements with Equinor to provide maintenance and modifications services and large modifications projects for installations on the NCS and the associated onshore plants.
The work scope will include maintenance and modifications services on Snorre A and B offshore Norway, which Wood has supported with maintenance, repair and modifications since 2016.
Equinor has the ability to extend the contracts for a further three and two years to a total of 10 years.
Aker Solutions inks maintenance agreements with Equinor
Aker Solutions has been awarded multiple five-year frame agreements with Equinor. The service company will provide maintenance and modifications services for a range of assets on the Norwegian Continental Shelf and onshore Norway.
The new agreements apply to the company’s sites in Trondheim, Bergen and Stavanger, with fabrication to take place at its yard in Egersund.
“Under the current frame agreement, we are boosting productivity, cutting costs and shortening project lead times by fundamentally changing how we work.“
—Kjetel Digre, CEO, Aker Solutions
In addition, Aker Solutions will provide maintenance and modification services on various onshore sites for Equinor, including maintenance for the Northern Lights carbon capture and storage facilities.
Aker Solutions to reduce capacity and headcount
Despite the new award from Equinor, Aker Solutions plans to reduce its service capacity and headcount in response to an expected downturn in offshore work in 2026.
The company is considering cutting its current 12,000 full-time staff by just over 500, with about 300 likely let go from its yard in Verdal. Other job losses will be spread across Aker Solutions’ production facilities and engineering/support in Norway and internationally. However, the actual level of redundancies could change if the company wins contracts for oil and gas and renewable energy.
“We still see many opportunities both in Norway and internationally, but the anticipated activity level means we must take action now to ensure the company’s robustness and sound financial management."
—Kjetil Digre, CEO, Aker Solutions
He said the market transition to renewable energy is 'taking longer than anticipated,' and the company is 'now feeling the effects.'
“We are already seeing results from several improvement programs where new technology and smarter ways of working are reducing costs for our customers and thereby strengthening our competitiveness," he added. "At the same time, we are developing our offerings in new areas, creating more opportunities to win additional work."
Subsea7 awarded contract offshore Norway
Moreover, last month, Subsea7 was awarded an extension of an existing frame agreement by Equinor for subsea IMR services for the Seven Viking vessel.
This is the latest extension to the frame agreement, first signed in 2018. Under the terms of the extension, to year-end 2027, Seven Viking will perform IMR services for subsea operations at Equinor’s oil and gas wells across the Norwegian Continental Shelf.
Project management and engineering work will continue to be managed from Subsea7’s office in Stavanger.
The contract is valued between $50 million and $150 million.
About the Author
Jeremy Beckman
Editor, Europe
Jeremy Beckman has been Editor Europe, Offshore since 1992. Prior to joining Offshore he was a freelance journalist for eight years, working for a variety of electronics, computing and scientific journals in the UK. He regularly writes news columns on trends and events both in the NW Europe offshore region and globally. He also writes features on developments and technology in exploration and production.