Norway: Statoil Signs ISS Frame Agreements Worth $1.9 Billion


Statoil is entering into frame agreements for insulation, scaffolding and surface treatment worth a total of NOK 12 billion, options included.

The agreements relate to platforms, production vessels and land-based plants in Norway, as well as the Kalundborg refinery in Denmark. The agreements also apply to Kollsnes where Statoil, in its capacity as technical service provider, signs agreements on behalf of the operator, Gassco. The agreements now being entered into have a duration of four years, with the option of two two-year extensions. The tasks will ensure work for roughly 1,700 persons in the period. Four suppliers have accepted letters of intent issued by Statoil on behalf of the licence partners in question.

Kaefer Energy and BIS Industrier have been awarded the largest assignments, with contracts worth around an annual NOK 610 and 550 million respectively. Beerenberg Corp. and Linjebygg Offshore have been awarded contracts with an annual value of around NOK 200 and 140 million respectively.

Tough competition

The frame agreements for insulation, scaffolding and surface treatment have previously been part of a more extensive frame agreement for maintenance and modification. As the company wishes to secure greater diversity and boost the competitive element, Statoil has now chosen to enter into these contracts separately.

“The competition has been tough, we received some good bids and are happy to be able to award frame agreements to these four companies,” says Anders Opedal, senior vice president of procurement in Statoil.

This is the first time this type of frame agreement has been entered into since the merger between Statoil and Hydro’s oil and gas division in 2008. Though there previously were several different types of contract, the contracts are now standardised.

“This will enable Statoil to follow up the contracts in a more streamlined manner. We want a more hands-on approach with respect to ISS deliveries. As well as boosting competitiveness, we expect that this approach will also bring about increased quality while maintaining costs at the right level,” says Opedal.

Frame agreements:

Kaefer Energy AS

* Statfjord A/B/C

* Troll A/B/C

* Kristin

* Åsgard A/B

* Mongstad

BIS Industrier AS

* Snorre A/B

* Sleipner

* Oseberg F/C/Ø/S

* Heimdal

* Huldra

* Veslefrikk

* Brage

* Sture

* Kollsnes**

* Kalundborg

Beerenberg Corp. AS

* Grane

* Kvitebjørn

* Visund

* Gullfaks A/B/C

Linjebygg AS

* Njord A/B

* Heidrun

* Njorne

Entire portfolio:

Estimated total value 4-year contract period:* NOK 6 000 million

Estimated total value 4-year contract period + 2 x 2-year options:* NOK 12 000 million ($1.9 Billion)

Source: Statoil, July 2, 2010;

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