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Aker Solutions repositions MMO business in Norway

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Oilfield Technology,

The proposed streamlining of the Norwegian MMO business to one regional unit from previously four, will affect management and staff from Tromsø to Stavanger.

Under the new plans, up to 900 permanent positions may be impacted at facilities in Stavanger, Bergen, Kristiansund, Trondheim, Tromsø and Sandnessjøen as well as offshore. The workforce reductions will be made through regular employee turnover, redployments to other parts of the company and redundancies.

Efforts to introduce around half of the reductions are to commence immediately. Remaining adjustments will depend on work levels throughout the year. In the past the company has reduced capacity in its Norwegian MMO business by about 1300 permanent and temporary positions since to adjust to a marketdownturn.

"These measures are painful but necessary to strengthen the competitiveness and longer term potential of our Norwegian MMO business, which has suffered from a sharp drop in activity in Norway's offshore services market," said Luis Araujo, chief executive officer of Aker Solutions.

Hopes are that the more streamlined business will lead to leaner processes and bolster overall operations. It will also build on the company's core strengths in the MMO area, particularly within more complex modifications projects.

"We see significant opportunities ahead in the Norwegian modifications segment, where our experience and know-how are second to none," said Per Harald Kongelf, head of Aker Solutions' Norwegian operations.

There has been a substantial downturn in investments in the Norwegian oil and gas market since 2014, with predictions that the MMO market in Norway will continue to be challenging in 2016. The expiration of the long-term maintenance and modifications framework agreement with Statoil which is due to happen in the first half of 2016 will also affect work volumes.

Consequently, the company's prefabrication workshop in Sandnessjøen will be temporarily shut down for about three years. MMO operations in Tromsø will also be terminated, though some employees in this northern location of strategic importance will likely be kept on as part of the company's Arctic Hub. These employees will join Aker Solutions' Engineering and Front End Spectrum teams.

"Market conditions are challenging, but I am confident that the steps we are taking now to streamline operations, reduce costs and focus on our key strengths will enhance our position in MMO, also internationally, where we have been winning business and expanding in countries including Canada, the UK and Brunei," said Araujo.

Aker Solutions has about 16 000 permanent employees in some 20 countries. About 5 000 employees are in the MMO area, of which approximately 3600 are in Norway.

Adapted from a press release by Louise Mulhall

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