Aker lands vital contract

Ailing Anglo-Norwegian engineering group Kværner won a boost on Friday when its merger partner Aker Maritime clinched a NOK five billion (USD 560 million) gas production platform contract off Norway.

State-controlled oil and gas company Statoil said it was awarding the main contract for construction of the topsides of the Kristin gas and condensate production platform in the Norwegian Sea to oil and gas services group Aker.

Aker, merging with Kværner in a deal that will give Aker about 50 percent control of its loss-making rival, would start construction on Kristin at the Aker Stord yard in January 2003.

Production from Kristin is due to start on October 1, 2005 after investments in development totaling NOK 17 billion. The field is due to deliver about 35 billion cubic metres of natural gas until 2016.

Kværner shares closed at a month high of NOK 9.20 on the Oslo bourse on Thursday on mounting expectations that it or Aker would win the key contract. Aker is controlled by Norwegian billionaire Kjell Inge Røkke.

Kværner's new Chief Executive Helge Lund was quoted as saying on Thursday that winning the five billion crown deal would be a "flying start" for Kværner and Aker after they agreed to merge in December.

Kristin's floating platform will have daily production capacity of 125,000 barrels of condensate and 13 million cubic meters of gas.

Partners in the Kristin license are Statoil with 46.6 percent, Norwegian state oil firm Petoro 18.9 percent, Norsk Hydro 12 percent, Exxon Mobil 10.5 percent, Agip nine and TotalFinaElf three percent.

Kværner has issued NOK 3.5 billion in new shares and is merging with Aker under a plan to avert bankruptcy for the company, which has about 35,000 employees in 35 nations. Aker ends up with 50 percent control.

It was not clear which other companies competed for the Kristin contract. One Norwegian daily said that ABB had been among contenders.