The removal of installations from the Frigg field in the North Sea is, as previously underlined, complicated and demanding work, both with regards to the environment and saftey issues. The scope of work has increased beyond the fixed price contract signed in 2004.

"We had previously based our estimates on the client covering a substantial part of these additional costs. After long and complex negotiations we have achieved partial compensation, though we are still disappointed in the outcome. A learning point from this project is that fixed price contracts are a less attractive model for this type of project, where the scope of work is not fully clarified in advance," says President  & CEO of Aker Solutions, Simen Lieungh.

He also emphasised that, in today's financial climate, it is positive to have put these discussions about financial settlements for the project into the past. Uncertainty has been removed and all the involved parties can focus on the execution of the remaining work. The most critical phases of the project have now been completed, and the project is scheduled to be concluded by summer 2010.

As previously communicated, the construction of the two H-6e drilling rigs, Aker Spitsbergen and Aker Barents, is in the completion phase. By the current schedule, Aker Drilling will take delivery in February and second quarter 2009 respectively.

The sea trials for Aker Spitsbergen were completed in January with good results. However, some damage to the drilling equipment's heave compensators has been discovered. This damage has resulted in some components needing to be replaced. The repairs will lead to some additional costs for Aker Solutions.

"We strongly regret the complications this involves for our client and we are grateful for their patience. We will continue to work closely with Aker Drilling to minimise the consequences of the necessary repairs," says Lieungh.

The final settlement on the Frigg project and the cost overruns on the H-6e drilling rig project negatively affect Aker Solutions' financial results for fourth quarter 2008. Aker Solutions expects its EBITDA results for 2008 to be approximately NOK 3.1 billion. The outlook for 2009 will not be affected by the losses.

"I'm very disappointed in the outcomes of the Frigg project and the unforeseen incidents on the H-6e project, but I see that both our employees and organisation are delivering above expectations on other projects. Despite the losses, the company will deliver its second best EBITDA results ever in 2008. We also have a solid balance sheet, strong liquidity and no financing needs," says Lieungh.

"As we have already communicated, we expect that our EBITDA will grow in 2009 compared to earlier estimates for 2008, and will be in excess of NOK 4.5 billion. We have increased predictability for our future results with this agreement on Frigg, and we will continue to secure important contracts," Lieungh concludes.

President & CEO Simen Lieungh, CFO Leif Borge and SVP Investor Relations Lasse Torkildsen will also host a conference call today at 10.00 am CET and 15.00 pm CET (9.00 am EST).

Dial in numbers are:

Norway Toll Free :     800 19 640

UK Toll Free:             0800 028 1299        

USA Toll Free:           1888 935 4575        

International Toll:      +44 (0)20 7806 1968

ID:                             5924695

                       

Attendees may want to call 5-10 minutes before the call starts to ensure registration and access. The Q&A session will follow after a short introduction by Simen Lieungh. To ask a question during the call, please press *1 on your telephone.

ENDS

 

 

Lasse Torkildsen, SVP Investor Relations, Aker Solutions. Tel: +47 67 51 30 39, Mob: +47 911 37 194

 

Jannik Lindbæk, SVP Corporate Communications, Aker Solutions. Tel: +47 67 51 30 36, Mob: +47 977 55 622

Suppliers:
For further information about sourcing and potential subcontracts for this project, please contact BA Global Sourcing Champion, telephone number found here: http://www.akersolutions.com/Internet/SuppliersCentre/Contacts/SupplyManagementContacts.htm  

Career opportunities:
Visit http://www.akersolutions.com/Internet/CareerCentre

Aker Solutions ASA, through its subsidiaries and affiliates ("Aker Solutions"), is a leading global provider of engineering and construction services, technology products and integrated solutions. Aker Solutions' business serves several industries, including oil & gas, refining & chemicals, mining & metals and power generation. The Aker Solutions group is organised in a number of separate legal entities. Aker Solutions is used as the common brand/trademark for most of these entities. 

Aker Solutions' parent company is Aker Solutions ASA. Aker Solutions has aggregated annual revenues of approximately NOK 58 billion and employs approximately 26 000 people in about 30 countries.

Aker Solutions is part of Aker (www.akerasa.com), a group of premier companies with a focus on energy, maritime and marine resource industries. The Aker companies share a common set of values and a long tradition of industrial innovation. As an industrial owner controlling 40.27 percent of the shares in Aker Solutions through Aker Holding AS, Aker ASA takes an active role in the development of Aker Solutions.  

This press release may include forward-looking information or statements and is subject to our disclaimer, see www.akersolutions.com.