Looks like we will be reading the following words more and more - West Africa, Brazil, the Gulf of Mexico.
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Bloomberg Energy
Fri, 12 Nov 1999, 1:16pm EST
11/12 5:35 Kvaerner Will Shift Oil Equipment Focus Away From N. Sea to Boost Earnings
By Beate Schjolberg
Kvaerner to Shift Oil Equipment Focus Away From North Sea
London, Nov. 12 (Bloomberg) -- Kvaerner ASA, an Anglo-
Norwegian engineering and construction company, said it will
expand its oil and gas equipment and services business outside
its main market of the North Sea to boost earnings.
The company, which is in the process of laying off 3,000
employees in its Norwegian and U.K. oil and gas units, also wants
to reduce its role in large-scale development projects and focus
on the more profitable service and maintenance market instead.
Kvaerner, Aker Maritime ASA and other oil equipment
companies have closed units and laid off staff in the North Sea
area in recent months as fewer new oil and gas discoveries in the
region mean there will be fewer construction contracts in the
years ahead. Instead, companies are focusing on international
regions such as West Africa, Brazil and the Gulf of Mexico.
``While we are creating a smaller, more focused business, we
intend to remain among the leaders in our industry,' said Jan T.
Joergensen, who was named head of the oil and gas division in
August. The changes ``are the most effective response to a
declining capital projects market in the North Sea.'
Kvaerner's oil and gas unit was its biggest measured by
sales last year with 21 billion kroner ($2.7 billion) in revenue,
or one-quarter of the group total. Still, the unit posted an
operating loss of 101 million kroner last year, as Kvaerner took
charges for cost overruns on development projects.
Combining Units
The changes in the oil and gas division will include
combining the current Norwegian and U.K. oil and gas units. The
division will instead be organized into one unit for field
development projects, which will be based in Oslo, and an
Aberdeen-based unit for maintenance, modifications and
operational services.
About 80 percent of the oil division's sales currently comes
from the North Sea. The company said it aims to reduce this share
to 50 percent.
A reorganization of the oil and gas unit was expected after
Kvaerner announced plans to revamp all its activities in April.
The company's in the process of exiting shipbuilding, an industry
in which it's Europe's largest, and selling other businesses to
concentrate on oil and gas equipment, construction and
engineering.
Separately, Kvaerner said it won an order worth $100 million
from Teco Energy Services of Florida to deliver a gas turbine to
a power plant in Virginia. In September, Kvaerner agreed to sell
its gas turbine unit to General Electric Co. of the U.S. for an
undisclosed sum.
Kvaerner's shares fell 0.5 krone, or 0.4 percent, to 141.5.
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