A strong position in Norway has helped Aker Solutions recover from the past few years’ downturn more quickly than many of its international rivals, but in the future the engineering group admits it may have to look elsewhere for its biggest awards.

“Norway was really the first market to recover, so to be here was quite good and we took more than our usual share of the action. We are very busy now”, particulary when it comes to project delivery, Aker Solutions chief executive Luis Araujo told Upstream on the sidelines of the ONS 2018 conference in Stavanger.

Since taking the helm of the Oslo-based player in 2014, just as the oil price started to plummet, Araujo has worked to broaden the company’s international reach.

During the depth of the crisis, the company’s order backlog was about two-thirds international and one-third Norwegian, but with Norway recovering faster than the rest, the geographical spread of the backlog is now the other way round.

“We expect in the future it will be about 50-50 for the next four to five years, so it will be a balanced portfolio”, said Araujo.

“Globally we see more activity now. We see some projects move in Africa, and we see China is coming back with some big awards, and quite a lot of gas projects are starting to move again, in Australia and elsewhere. There is also more activity in the Gulf of Mexico, which was very quiet, and Petrobras is coming back to the market with subsea awards.”

Aker Solutions’ belief in Brazil points to success

Upcoming Brazilian projects include Equinor-operated Carcara, where Aker Solutions aims to capitalise on the strong position the company has with the Norwegian operator. Equinor has started to talk to suppliers, but is still at an early stage for the 2 billion-barrel development area.

“We have done some studies before, and we hope to be involved” in Carcara, which is “a good opportunity”, said Araujo, adding that Brazil is Aker Solutions’ third-largest country in terms of employees with more than 3000 people.

Back in Norway, a flurry of new investment plans submitted in the past year have left operators with few large, stand-alone projects left to pursue for the coming years.

Of the non-sanctioned developments, the north of Alvheim/Krafla/Askja area, known as Noaka, is probably the largest greenfield development on the horizon at the moment, Araujo said.

“In addition to Noaka, there will be a lot of tiebacks and modifications, and we are very strong on that,” he said. “If you do not have large finds, the market might change to smaller projects, more tiebacks, as there are quite a lot of small pockets that will be developed. I think the industry has to start to adapt to that kind of activity rather than just focusing on large projects.”

Aker Solutions also sees offshore opportunities outside of oil and gas as the wind power market is expanding in the North Sea and elsewhere.

“I have never seen as many windmills in my life as I have at this conference,” said Araujo. “Everybody seems to be thinking about that, and we do have a lot of competence for floating offshore. They will need cables, moorings and subsea controls and we have the capabilities for that.”

The company is also developing new technologies in other areas that will be important as the global energy mix shifts towards lower-carbon solutions, including for natural gas and for carbon capture, Araujo said.

Aker to cut up to 150 jobs

Although markets are now recovering from the downturn, some challenges persist. High capacity in the subsea services market means competition is tougher than suppliers would like, and is keeping prices down.

“There is too much capacity and prices are very depressed, and somehow we will have to improve that. I do not foresee a large-scale price increase, otherwise projects will stop, but certainly we need more balance and more collaboration between us and the clients,” said Araujo.

Embed: Luis Araujo ONS TV