AF Gruppen signs interim agreement for offshore decommissioning contract in the British sector of the North Sea

Tuesday, Sep 09, 2008

AF Gruppen has today signed an interim agreement with Shell U.K. Limited (Shell) regarding the decommissioning of 6 platforms from the Indefatigable gas field. This field is located in the British sector of the North Sea.

The commitment under this interim agreement is limited to preparatory work. Negotiations on the final contract are ongoing and execution of the final contract is subject to Project Final Investment Decision by Shell. The value of the full contract scope is expected to be around 230 MNOK. AF Decom Offshore, part of AF Gruppen’s environmental business, will carry out the offshore lift preparations and onshore dismantling activities for the Inde Decommissioning project.

Preparatory work is underway for the offshore platform decommissioning activity due to start in early 2009. The project is scheduled for 3 years.

As part of the work, AF Decom Offshore is set to recycle around 13,000 tonnes of steel and equipment from the Inde structures.

The location of the onshore dismantling activities will be the subject of a separate announcement.

- This is the fifth decommissioning project AF Gruppen has undertaken offshore, and the second in the British sector of the North Sea. The agreement strengthens our strategic target of delivering environmental services, and is recognition of our competence in dismantling and recycling offshore steel structures internationally. The contract forms the basis for further growth in our environmental business in the North Sea, says Pål Egil Rønn, CEO of AF Gruppen.

Facts

AF Gruppen’s largest contract regarding decommissioning of oil and gas installations was signed in June this year, with Heerema Marine Contractors. This contract involves decommissioning 9 platforms, with an option for a further 4 from the Ekofisk-field in a period between 2008-2014. 
Since 2002, AF Gruppen has built a broad competence when it comes to environmentally friendly removal of offshore constructions.

AF Gruppen was prequalified for offshore work in 2002 based on the methods the company uses for onshore demolition of industrial facilities.

AF Gruppen entered into a contract with ConocoPhilips in 2004 regarding the dismantling of the steel structures on Ekofisk 2/4T. This work was completed in May 2007, six months ahead of schedule and on budget. The recycling rate was 98 per cent.

Shell U.K. Limited (Shell), acts on behalf of itself and its co-venturer in the Indefatigable Field, Esso Exploration and Production U.K. Limited (Esso).

For more AF Gruppen press releases go to www.youroilandgasnews.com

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