Statoil awards Njord contract

March 17, 2017

Statoil, on behalf of the partners in the Njord licence, today awards an EPC contract to Kværner for the upgrade of the Njord A platform in the Norwegian Sea.

The EPC (engineering, procurement, construction) contract is call-off under a framework agreement signed on 1 April 2016. The contract is worth some NOK 5 billion. Earlier call-offs under the contract were made in connection with pre-engineering and preparatory work, including platform assistance at the quay, towing into the dry dock and inspection.  

“The Njord partners have reached an important milestone in the process of upgrading the Njord A platform for further production. I am very pleased that we today can sign this contract with Kværner here at Stord. The contract will create around 3,000 man-years of employment,” says Torger Rød, head of project development in Statoil.

“The Njord A platform was towed to Kværner’s yard at Stord in August 2016, and was moved into the dry dock in December last year. The work to be performed now is essential to successfully resuming safe and efficient operations from the field and being a hub for future tie-in of new fields,” Rød says.  

The platform will stay in the dry dock until the autumn of 2017 for extension and reinforcement of the hull. It will subsequently lie alongside the quay for further reinforcement and upgrading work in the period up to the delivery in 2020.

“This contract is another example of new local activity and jobs resulting from the transition that the whole Norwegian oil industry has undergone in the past few years. A competitive Norwegian supply industry is an enabler for delivering on the goals we have set for future production and value creation on the Norwegian continental shelf. These types of upgrading projects are complex. A high focus on health, safety and environmental performance is key to successful implementation,” says Pål Eitrheim, Statoil’s chief procurement officer.   

The contract award is conditional pending approval of the Plan for Development and Operation (PDO) for Njord from the authorities. The Njord partners recently made an investment decision and are planning to submit PDO shortly.

According to plan the Njord A platform will be towed out on the field and ready to resume production at the end of 2020. 

Invitation to contract signing and press event today at 11:30

  • Media is invited to the signing ceremony and press conference at Kværner at Stord today at 11:30 with participation by Terje Søviknes, the Minister of Petroleum and Energy, Jan Arve Haugan, President & CEO of Kværner and Torger Rød, Senior Vice President for Project Development in Statoil. The press conference will be held in Norwegian.
  • Journalists attending the event should register with Kværner’s communication manager, Odd Naustdal, mobile phone 905 76 079 / email odd.naustdal@kvaerner.com 
  • Statoil’s media contact: Morten Eek, mobile phone 416 89 515, email meek@statoil.com

Facts

  • The PDO for the Njord field being approved in 1995, the field has been on stream since 1997. Njord A was originally delivered by the current Kværner in 1997.
  • The topside structure was fabricated and assembled at Stord, whereas Verdal delivered the hull.  In 2014 the hull was temporarily reinforced, allowing production to continue for a period, but it was still not sufficiently robust for drilling from the platform to be resumed. In the summer of 2016 the Njord and Hyme fields were temporarily shut down.
  • Njord A was towed ashore and put at the Stord yard, and the storage vessel Njord Bravo was towed ashore and put quayside in Kristiansund. Both installations will now be upgraded for recovery of the remaining resources in the fields, in addition to preparing for the tie-in of new discoveries in the area.
  • The partners in the Bauge licence have decided to tie back the field to Njord.  In 2016 the Pil & Bue partners picked subsea development with tie-back to Njord A as a development concept and the partners are now progressing work towards an investment decision for this concept.

Partners in the licence are

Statoil (operator) 20%, Engie E&P Norge AS 40%, DEA Norge AS 30%, Faroe Petroleum 7,5% and VNG 2.5

*DEA Norge AS has entered into a sale and purchase agreement with Engie E&P Norge AS, under which DEA will be assigned a 20% additional interest in the Njord Unit. DEA Norge AS will then have 50% interest and Engie E&P Norge 20%. The agreement is subject to Governmental approval.