Kvaerner Wins $1.5 Billion EPC Contract for ExxonMobil’s Hebron Project

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March 12, 2013

Hibernia, the world’s largest offshore platfom, one that is able to withstand the impact of a one million ton iceberg. The field is located in the Grand Banks, 315 kilometers east-southeast of St. John’s, Newfoundland and Labrador. Image: ExxonMobil

(Bloomberg) — Kvaerner ASA, a Norwegian builder of oil platforms, climbed the most in more than four months in Oslo trading after winning a $1.5 billion contract from Exxon Mobil Corp. in Canada.

Kvaerner rose as much as 8.1 percent, the biggest intraday gain since Oct. 31, and traded up 5.7 percent at 13.1 kroner as of 11:13 a.m. local time. Trading volumes today have already surpassed the three-month daily average.

Exxon awarded Kvaerner an engineering, procurement and construction-services contract for the Hebron heavy-oil project off Canada’s eastern coast, according to a statement today. That may ease investor concern that rivals of the Fornebu-based company were beating it to new orders.

“This is a strategically important project for us,” Kvaerner’s executive vice president responsible for concrete solutions, Bjoern Gundersen, said in the statement.

Kvaerner has slumped more than 20 percent in two months, dropping as much as 6.6 percent on Jan. 21 after losing out on a $1.1 billion contract for the Aasta Hansteen gas project to Hyundai Heavy Industries Co. Competitors Daewoo Shipbuilding & Marine Engineering Co. and SembCorp Marine Ltd. have also won so-called topside contracts this year.

The total value of the Hebron project to Kvaerner is about 8.5 billion kroner ($1.5 billion), including about $240 million of work already conducted, Pareto Securities ASA said in an e- mailed note. “New work is thus 7.1 billion kroner, below our 9 billion-kroner estimate but largely in line with consensus.”

Kvaerner was spun off from Aker Solutions ASA in July 2011.

-Alastair Reed, Copyright 2013 Bloomberg.


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