Aker Solutions and Statoil cancel Cat B contract

6/24/2013

Aker Solutions and Statoil cancel Cat B contract

OSLO -- Aker Solutions and Statoil have cancelled a contract for the delivery of a semi-submersible rig capable of year-round well-intervention services on the Norwegian Continental Shelf.

In April 2012, the companies agreed that Aker Solutions would build the Category B (Cat B) rig, and use it to provide Statoil with a range of well-intervention and drilling services for an initial eight years, starting in 2015. The technology development needed to build the rig has since proven to be considerably more demanding than initially anticipated, and, on June 24, the parties mutually agreed to terminate the contract with immediate effect.

"Aker Solutions and Statoil have together concluded that the project can't be realized within the framework of the contract," said Per Harald Kongelf, regional president for Norway at Aker Solutions. "Unfortunately, the technological issues weren't solved in the initial system definition phase of the project. We still believe in the concept of Cat B, but the technology needs more time to be developed."

"We made significant progress in developing Cat B," Kongelf said. "We will seek to use the experience we've gained to explore future possibilities for maturing and realizing this type of technology."

Each party will be accountable for its own project-related costs. Aker Solutions will in the second quarter book a one-off cost of roughly $62 million, of which roughly $58 million shall be recognized as an impairment of the investments in the Cat B project, while the remaining are operating costs.

The Cat B project was within the company's oilfield services business unit, which Aker Solutions has previously said it intends to spin off. The clarification surrounding the Cat B contract is expected to aid this process.

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