Energy firm Aker Solutions yesterday revealed plans to split in two in a bid to reduce costs and bolster its subsea and engineering services division.
The firm, controlled by Norwegian billionaire Kjell Inge Roekke, confirmed its subsea, umbilicals, engineering and maintenance, modifications and operations (MMO) units will remain under the Aker Solutions name.
Its drilling technologies, Aker Oilfield Services and process systems, will be developed independently as part of a new oil-services investment company, named Akastor.
The slimmed-down Aker Solutions will keep 20,000 workers, two-thirds of the revenue and about 60% of the group’s core earnings.
This part of the business will also forge ahead with a recently signed a co-operation deal with oil services giant Baker Hughes.
“The new Aker Solutions will be a leaner and more focused company,” executive chairman Oeyvind Eriksen said. “The company will, through a commitment to operational excellence and organic growth, be better placed to build on its leading position in the fastest growing areas of the global energy markets.”
David Currie, UK regional president, said the announcement “represents an exciting opportunity for Aker Solutions globally and for our business in the UK”. “The new structure will enable us to continue our journey of growth in the region, based on a more focused portfolio of products and services,” he said.
Aker’s Aberdeen-based business has 2,600 employees working in MMO and subsea, while drilling technologies will likely be rolled into Akastor.
The splintered parts of the business are those that face a difficult future due to shrinking margins, cooling drilling activity and slowdowns in new rig orders.
Its MMO business is also struggling with a poor market as energy firms sharply reduce their spending in the North Sea, but this will be kept in the new, core business.
“We see opportunities for our MMO business from ageing facilities in the North Sea and other markets, even as more restrained capital spending from exploration and production companies is expected to weigh on revenue this year and next,” the company said.
The split is scheduled to occur around the end of September. Both companies will be listed on the Oslo stock exchange.
Luis Araujo, the regional president for Aker Solutions in Brazil, will be chief executive of the new Aker Solutions.
Frank Ove Reite, managing partner at Aker’s ownership and advisory company Converto, will become Akastor’s boss.
Mr Eriksen will remain chairman of the board of Aker Solutions.