InterviewLookingBy Rolf E. Gooderhamto theFutureInge Hansen, <strong>Aker</strong> KvaernerGroup President and CEO.“We need to be more strongly identified by ourcustomers as a value creator – a partner on theincome side – rather than a pure cost item.”Inge Hansen, <strong>Aker</strong> Kvaerner’sGroup President and CEO,acknowledges that formulatinga comprehensive vision for<strong>Aker</strong> Kvaerner will take morethan a few months. But healready has a clear idea ofwhere he wants the companyto be in six-years’ time andof the attitudes that needto be shaped in order toreach that goal.Listing <strong>Aker</strong> Kvaerner ASA – with its focusedOil & Gas and Engineering & Constructionactivities – on the Norwegian stock marketApril 2 is seen by Inge Hansen as a key development,not least because it has allowed thecompany to start thinking ahead.“It’s also gratifying that the concept behindthe latest restructuring, which converted us froma division of a company into an independentorganization, seems to be working in practice.”Taking a longer view, Hansen says his aimfor 2010 is that <strong>Aker</strong> Kvaerner will be a successful,international, industrial company with its rootsstill located in Norway. And the first thoughts onhow to achieve this are already emerging.But the immediate focus is on the period upto 2006, where one of the main challenges is continuingto build up confidence in the market where<strong>Aker</strong> Kvaerner has its core business activities.“In many respects, we’ve already secured thattrust through the restructuring,” he observes. “Wenow have to show that we can live up to it in the longrun. That requires us to be reliable and predictable,demonstrating that we can manage our business.”Reinforcing Corporate Culture“Culture” and “attitude,” two words frequentlyused by Hansen when he talks about the wayforward, represent two sides of the same coin.He discusses the need to reinforce <strong>Aker</strong>Kvaerner’s corporate culture as an internationalgroup, and the importance of nurturing a “riskculture” in relation to its projects.At the same time, Hansen wants to seechanges in mentality in both the work done bythe group and in the crucial issue of health,safety and the environment (HSE).“We need to be more strongly identified byour customers as a value creator – a partner onthe income side – rather than a pure cost item,”he says. “I think we should also perhaps be moreconscious about the way we market ourselves.Norway’s <strong>Kristin</strong> platform is a fantastic incomegenerator, for instance, but we’re focusing onlyon the cost-efficiency aspects of this project.”Taking on RiskHansen is gratified that the group has created arisk management structure, which he sees asvital. <strong>The</strong> biggest strides have been made beforethe contract signature stage, with all orders above$100 million now subject to formal review.“In the coming months we will extend thisprocess to contract execution. Our aim is to createand maintain a culture which focuses onidentifying how much risk we can accept –without seeking to avoid all risk, because that’salways a relative term. What we have to do isunderstand the risks we’re accepting and keepthem under control.”Acknowledging that <strong>Aker</strong> Kvaerner as agroup has come further in the internationalizationprocess than its Norway-based management,Hansen emphasizes that the organizationmust work every day on developing its corporateculture as a competitive parameter. Thatruns parallel to another essential requirement inthis context – the need to start putting tomorrow’s<strong>Aker</strong> Kvaerner leaders into place.Leap Forward for HSEAnd Hansen is fully committed to a quantumleap in HSE – again by encouraging eachemployee’s attitude. Backed by a sense thatformal rules and procedures have reached theirnatural limit, the emphasis will be on everyemployee taking personal responsibility foravoiding unfortunate incidents.“To achieve this, HSE must be embedded inour hearts – around the clock, seven days a week,”says Hansen. “You can’t turn it on at 7:00 am andoff at 5:00 pm. I think a lot of good work hasalready been done here, with some entities – notleast in the USA – reporting outstanding results.”He adds that <strong>Aker</strong> Kvaerner’s whole managementteam has lined up behind the goal of aquantum leap and signed a declaration committingit to this policy. <strong>The</strong> shift in attitude mustoccur out at the individual sites, but the leadershipalso has to demonstrate in practice that nocompromises are acceptable here.Not by Price AloneHansen notes that technology is interesting for<strong>Aker</strong> Kvaerner to the extent that the group getspaid for it, and adds that the bulk of the group’sresources are concentrated in high-cost countries.“So, for us to compete on price alone isuninteresting. No matter how cheap you get,somebody can always be cheaper. That meanswe have to focus even more strongly on achievingthe best possible, overall outcome, whereunique know-how and technology can play animportant part.”This provides another example ofHansen’s emphasis on attitudes and awareness.He emphasizes that <strong>Aker</strong> Kvaerner’s challengeup to 2010 is to identify what its key expertiseshould be and how it will be exploited, whiletaking advantage of global delivery opportunitiesto ensure competitiveness.“We’re perceived as technology driven,but not everything needs to be ours – technologyis also being licensed,” he comments. “Weare involved in market segments where technologyis an important parameter, where it isimportant to be among the leaders – in otherwords, not just a low-cost bidder. I do not seethe group ever becoming a general contractorthat does everything for everyone.”Expertise Makes the DifferenceTaking a broader perspective, Hansen says that<strong>Aker</strong> Kvaerner’s approach will be to competeover solutions with high expertise (know-howand technology) content. <strong>The</strong> group’s strongposition on the Norwegian and UK continentalshelves provides a basis for this because theyare demanding areas.Hansen believes the Norwegian continentalshelf will remain one of the key markets for thegroup over the coming decades, offering a varietyof opportunities in areas such as mature fields,deepwater projects and the Barents Sea. Lookingfurther ahead, he sees activities in Russia as a naturalextension of this involvement.<strong>The</strong> Gulf of Mexico represents anothercentral region, he notes. “This is the world’sbest developed offshore sector. Being competitivethere provides a dimension which shouldn’tbe underestimated.”Brazil and West Africa are also incrediblyinteresting areas, but illustrate the way <strong>Aker</strong>Kvaerner will seek to draw on existing customerrelations to penetrate new markets.“Being a front-runner isn’t always appropriatefor us – here we prefer to piggy-back,”says Hansen. “But we must absolutely discusswith customers where our expertise can be ofhelp to them.”A key component in his vision for thecompany’s future is the way its various components– both national and industrial – can bejoined to create crucial benefits. He acknowledgesthat capital markets prefer focused companiesbecause they are easier to evaluate.“But we must educate them about theadvantages of having engineering and constructionoperations – which account for a third of ourbusiness – and secure valuable synergies withthe oil and gas side in such areas as common systems,shared customers and procurement.”That makes an interesting reflection froma man who has himself moved from the financialsector to leading Norway’s most internationalcompany on its march into the future."“To achieve this, HSEmust be embedded inour hearts – aroundthe clock, seven daysa week. You can’tturn it on at 7:00 amand off at 5:00 pm.”89
Project ExecutionTamingthe High-TemperedMistressBy John Bradbury<strong>Kristin</strong> is a demanding development which breaks newground offshore Norway as the first high-pressure andhigh-temperature gas field to be tapped subsea andexported via a semi-submersible platform.Discovered in 1996, the <strong>Kristin</strong> reservoir ranksas the highest pressure and highest temperaturefield to be tapped on the Norwegian continentalshelf so far – at 13,195 psi (910 bar) and338˚F (170˚C).Difficulty“<strong>The</strong> main challenge on <strong>Kristin</strong> relates to theunderground properties,” says Bård Heimset,Statoil’s Project Director for <strong>Kristin</strong>. “It is avery difficult reservoir. It is partly due to theproduction capability of the reservoir and thefact that we have a high-pressure and high-temperaturereservoir. It is a big, technical challengefor the people on the project, particularlyfor the subsea components.”Kvaerner Oilfield Products (KOP) is supplying<strong>Kristin</strong>’s subsea components and isresponsible for qualifying equipment for the subseaproduction stations on time for the well completiondrilling program, although at present,pre-production drilling is underway – withSaipem’s Scarabeo 5 rig and Smedvig’s WestAlpha. “<strong>The</strong> subsea equipment delivered is on thecritical line for the project,” observes Heimset.DifferencesSo what are the differences between <strong>Kristin</strong> andany other floater-based project? <strong>Kristin</strong> is ahighly customized production facility which isbeing built by <strong>Aker</strong> Kvaerner on a tight scheduleto hit a production date in 2005. Closeproject control has been possible throughutilization of a highly developed managementsystem – <strong>Aker</strong> Kvaerner’s project executionmodel – and construction methodology,Bård Heimset,Statoil Project Director for <strong>Kristin</strong>.together with a very stringent change controland interface system to ensure <strong>Kristin</strong> stays onschedule, has the right quality and can accommodateany increase of Scope of Work.“<strong>Kristin</strong> is the first subsea development ofan <strong>HPHT</strong> reservoir with recovery to the floaterand offtake to the Karstø gas terminal – whichis being expanded to cope with the anticipatedoutput,” says Jan Tore Elverhaug, <strong>Aker</strong> Kvaerner’sProject Director for <strong>Kristin</strong> EPCH Contract.<strong>The</strong> biggest driver on the project is a commercialone – the time to first gas – and that createspressure to complete surface and subsea facilitiesfor July 2005 when first gas is due.“Because this is the first <strong>HPHT</strong> gasfloater, the challenge is the control and safetyJan Tore Elverhaug, <strong>Aker</strong> Kvaerner ProjectDirector for <strong>Kristin</strong> EPCH Contract (right)pictured with Finn Reierth, Statoil ProjectDirector for <strong>Kristin</strong> EPCH Contract (left).systems,” says Elverhaug. “<strong>The</strong> reservoir pressurewill be choked subsea down to about 3,770psi (260 bar).” Flexible risers to take productionfrom the seabed to surface are designed for4,786 psi (330 bar).Elverhaug states, “Statoil’s and our ownHSE goals are very ambitious and have beendifficult to fulfill. Neither Statoil nor ourselvesare pleased with the results so far. However, weare working on a six-month and long-termaction plan to address these issues, and haveconfidence that we will deliver.” At the sametime he is urging the entire project organizationto follow up these plans even harder as the<strong>Kristin</strong> semi project enters the inshore phase inSeptember 2004.<strong>Aker</strong> Kvaerner is the main engineering contractor on the project,responsible for building a semi-submersible gas productionplatform under an EPCH (engineering, procurement, constructionand hook-up) contract encompassing:• project engineering and procurement• fabrication of topsides process and utility modules• integration of living quarters, flare, and riser balcony modules• deck and hull mating inshore• supplying all subsea equipment through Kvaerner OilfieldProducts (KOP)• offshore installation by <strong>Aker</strong> Marine Contractors1011