Det norske, Aker Solutions, and Subsea 7 team up to drive costs down

Oil company Det norske oljeselskap has entered into a “one for all, all for one” collaboration model with oilfield services providers Aker Solutions and Subsea 7.

The companies claim this will be a major shift in how an operator and its suppliers can work together on oil and gas developments offshore Norway.

The alliance combines Det norske’s exploration and production know-how with Aker Solutions’ expertise in front end engineering, brownfield modifications and subsea systems and Subsea 7’s capabilities in the engineering, procurement, installation and commissioning of subsea umbilicals, risers and flowlines (SURF), reads a statement on Tuesday.

“We see this as a new and exciting way of working together as operator and suppliers with many potential benefits, not only for us individually as companies but also for the entire industry as we find more effective collaboration methods,” said Luis Araujo, chief executive officer of Aker Solutions.

The team members will work as one integrated team to find the most cost-effective solutions for developing Det norske’s Norwegian subsea field portfolio.

Before now, they say, field developments have typically been managed on a project-by-project basis that curtails reuse of technology and solutions.

“Our industry needs to find new, more sustainable ways of working on oil and gas developments,” said Karl Johnny Hersvik, chief executive officer of Det norske. “This alliance enables a holistic approach to our subsea developments that will promote an effective reuse of solutions and best practices across the portfolio to significantly save time and reduce costs.”

“This is an innovative way of collaborating with an operator and another supplier,” said Chief Executive Officer Jean Cahuzac of Subsea 7. “Working together as one integrated team across developments will promote greater sharing of knowledge and best practices.”

The alliance agreement comes after Det norske in June announced a four-year framework agreement with Aker Solutions to provide subsea production systems and services for the operator’s oil and gas developments in Norway and with Subsea 7 for SURF services.

The scope of these framework contracts has a total potential value of about NOK 2.8 billion, of which approximately NOK 800 million is Aker Solutions’ share and NOK 2 billion is Subsea 7’s portion. These values may change depending on how much work the operator calls for under the contracts.

Overall management of the alliance will be through a steering committee comprised of senior management from each company. The project management team will be led by a manager from Det norske.