Aker Solutions ASA, Schlumberger and Subsea 7 have entered into agreements to form a joint venture to deliver a step change in subsea production economics by helping deliver a step change in subsea production economics by helping customers unlock reserves, reduce time to first oil and lower development costs while simultaneously delivering on their decarbonisation objectives.
Aker Solutions and Schlumberger will contribute their subsea businesses into the JV which following the transactions will be owned by Schlumberger (70 percent), Aker Solutions (20 percent) and Subsea 7 (10 percent).
This combination brings together deep reservoir domain and engineering design expertise, an extensive field-proven subsea production and processing technology portfolio, world-class manufacturing scale and capabilities, and a comprehensive suite of life-of-field solutions to customers all over the world.
The transactions are interdependent and subject to regulatory approvals, as well as other customary closing conditions, and are expected to close during the second half 2023.
The transaction structure and terms – Aker Solutions will receive USD 700 million in consideration for the sale of a 20 percent ownership in the JV and retain a 20 percent ownership in the JV.
Each party will operate their businesses independently and in the normal course until closing. Based on a scenario where closing takes place in the fourth quarter of 2023, Aker Solutions will in addition to the value of the transactions retain an estimated $300 million of cash generation from its subsea business, for the seven quarters from second quarter of 2022 until end 2023.
“This joint venture will bring together world-class businesses that are uniquely positioned to provide subsea technologies to help our customers improve recovery and reduce overall subsea development costs,” said Schlumberger chief executive officer Olivier Le Peuch. “Customers will benefit from enhanced services that leverage digital and technology innovation to drive improved performance while increasing energy efficiency and reducing CO2 emissions.”
“By combining our strong and complementary competence and technologies, this compelling combination will deliver an industry step change that will benefit our customers, employees and significantly increase shareholder value. The offshore market activity is increasing, and this joint venture will drive enhanced offerings both in terms of subsea production economics and low-carbon solutions,” said Kjetel Digre, chief executive officer of Aker Solutions.
Subsea Integration Alliance, a nonincorporated alliance between Schlumberger and Subsea 7, will be merged into the new entity with an extended renewal period of 10 years from closing of the transaction. “We are excited to build on our highly successful alliance with Schlumberger and partnership with Aker Solutions. This new joint venture is a critical step as we collaborate on the integrated subsea projects that drive maximum value for our customers,” commented John Evans, Subsea 7 chief executive officer.
Following the transactions, Aker Solutions will be better placed to deliver on its strategy to accelerate its transformation to meet global energy needs both within oil and gas and renewables. Enabled by Cognite’s data platform and Aize’s software applications, Aker Solutions will continue to grow as a digitally empowered engineering and project execution company servicing the energy market.
Aker Solutions continues to expect 2022 revenues at around NOK 38 billion, of which Subsea is expected at around NOK 13 billion. Following the transactions Aker Solutions will hold 20 percent ownership in the subsea JV and a large and significant business comprising the EMM- and Renewables & Field Development segments. This business alone is expected to deliver revenues of around NOK 25 billion in 2022.
Aker Solutions expects to recognise a gain of around $1 billion following the transactions, at closing.
For more information visit www.akersolutions.com
