OPINION: Every cloud has a silver lining, and Norwegian industrial tycoon Kjell Inge Rokke is set to capitalise richly by pivoting his majority owned Aker ASA group towards the green energy transition on the back of state support in the wake of the Covid-19 pandemic.
The move to re-merge Aker Solutions with Kvaerner — after the latter was spun off in 2011 — and spin out offshore wind and carbon capture into separate listed entities would not have been possible without a recent tax relief package from Norway's government to support the ailing oil and gas sector. This has triggered new field investments to secure employment in the key sector “so that we can make bold decisions that can position us for the future energy transition”, according to Aker ASA chief executive Oyvind Eriksen.
Aker has, in the process, poured cold water on those who claimed fiscal relief for the oil and gas sector would slow the energy transition.
The strategic restructuring is a far-sighted move by Rokke that puts the merged contractor in pole position to capture rising value creation in the renewables and low-carbon sector, in particular in deep-water floating wind where it aims to become a global market leader.
The rapidly expanding renewables sector is forecast to grow by 50% within 2025 when Aker Solutions aims to generate about one-third of its revenue from this sector.
Offshore wind investments are expected to overtake those for oil and gas in Europe already by 2022, according to Rystad Energy.
The newly merged Aker Solutions will become the third-largest non-Asian supplier of oil and gas engineering, procurement and construction services in revenue terms behind TechnipFMC and Saipem.
There are questionable elements to Rokke’s grand design, including Aker’s proposed acquisition of loss-making onshore wind player NBT, while analysts have questioned whether the renewables revenue goal is overly ambitious.
However, the overwhelmingly positive stock market response to the revamp is indicative that Aker is heading in the right direction — and blazing a trail for others to follow.
(This is an Upstream opinion article.)