UPDATE 1-Norway's Kvaerner signs long-term platform deal with Statoil

Thu Jun 26, 2014 2:57am EDT

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OSLO, June 26 (Reuters) - Norwegian heavy equipment maker Kvaerner has struck a deal with oil firm Statoil to deliver platform jackets for North Sea oilfields until 2020, a coup for the company, which has faced stiff competition from Asian suppliers.

As part of the deal, Kvaerner will build two jackets - the steel frame that supports the deck of the platform - for 3 billion crowns ($488 million) for Statoil's Johan Sverdrup oilfield, the biggest industrial project in Norway in decades.

Statoil said the agreement would help it cut costs by standardising the construction of some of its platforms.

"It is highly pleasing that Kvaerner has managed to come up with a competitive and forward-looking delivery model," Statoil CEO Helge Lund said in a joint statement on Thursday.

"By so doing, Kvaerner has demonstrated that cost-reduction measures and increased efficiency do bear fruit."

In recent months, Norwegian suppliers to the oil industry have lost big contracts to South Korean or Chinese yards, with oil firms citing higher costs as a concern.

The jackets for the Johan Sverdrup field will be built at the Verdal yard in Norway, which is specialised in the construction of such structures.

The first one will be delivered in 2017 while the second one will be delivered in the spring of 2018.

"It is of course very positive," said Haakon Amundsen, an analyst at ABG Sundal Collier.

"The talk in Verdal was that they would either need to scale down significantly or have some visibility about getting a deal linked with the Johan Sverdrup field. Now they have that."

The implications were threefold, he said.

"Verdal will survive, the second is that the estimates will go up and the third is that Kvaerner is competitive on certain projects."

The analyst expected Kvaerner's shares to go up between 50 oere and one crown. "It will rise significantly," he said.

Kvaerner shares closed at 12 Norwegian crowns on Wednesday.

($1 = 6.1470 Norwegian Kroner) (Reporting by Gwladys Fouche, Editing by Terje Solsvik and Mark Potter)

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