Equinor, a Norwegian company, awards ten-billion-dollar five-year contracts to suppliers

Equinor announced on Thursday that it had signed framework agreements with a group of suppliers worth 100 billion Norwegian crowns (9.93 billion dollars) for the maintenance and modification of its offshore?and onshore?installations.

Aibel Group, Wood Group and IKM Group as well as Head Energy, Rosenberg Worley and Aker Solutions signed new five-year deals with the option to extend them by another three and two years.

These deals replace those signed in 2016 with Aibel and Apply, Wood Group, Aker Solution, and Reinertsen, which expire in the month of March. Aker Solutions bought Reinertsen’s offshore business in 2017.

Suppliers can benefit from the core business.

Aker Solutions announced in a separate statement that it will book its portion of the five year contracts, excluding the options, as major orders in the first quarter 2026.

A major contract is defined as a deal between 8 billion and 12 billion crowns.

Subcontractors in the Norwegian oil industry are increasingly focusing on maintenance and modification contracts, as there is less demand for new oil and gas discoveries as major projects are winding down and smaller ones are being completed.

Aibel, a privately-owned company, estimated that the value of its five-year contract was around 20 billion crowns. About 30-40% its business is maintenance and modifications in Norway.

The Norwegian continental shelf is a place where a lot of work will be done to upgrade and maintain existing infrastructure. Also, subsea fields are being connected. These contracts today are all about that," Aibel CEO Mads Anderson told.

Kjetil Digre, CEO of Aker 'Solutions, said that the company still expects the oil companies to approve new large-scale developments, such as Equinor’s Wisting discovery, which was put on hold in 2022 due to rising costs.

Aker Solutions announced on Wednesday that it was laying off workers at its Norwegian shipyard, which is specialized in building steel constructions for offshore oil and gas fields. Reporting by Nerijus Adomiaitis; editing by Terje Sollvik and Alexander Smith

(source: Reuters)