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Local time: 20:31 CET
Aker Solutions, SLB and Subsea7 announce today the final closing of their previously announced subsea joint venture. The new business, which will adopt the OneSubsea name, will drive innovation and efficiency in subsea production by helping customers unlock reserves and reduce cycle time.
OneSubsea now comprises Aker Solutions’ and SLB’s subsea businesses, which include an extensive complementary subsea production and processing technology portfolio, world-class manufacturing scale and capacity, access to industry-leading reservoir and digital domain expertise, unique pore-to-process integration capabilities and strengthened R&D capabilities.
OneSubsea’s field-proven subsea processing capabilities are seen by its customers as unparalleled in enhancing reservoir recovery and enabling long tie backs. Its unique compression technology portfolio has proven its potential to reduce the structure and capital cost of developing new energy reserves, while subsea projects have shown to be inherently more carbon efficient than topside solutions.
“By combining our strong and complementary competencies and technologies, we will deliver an industry step change that will benefit our customers and employees while significantly increasing shareholder value. For Aker Solutions, today also marks a defining moment in our strategy. We have transitioned from having a stand-alone subsea business to becoming a proud co-owner of a world-leading subsea company,” said Kjetel Digre, Chief Executive Officer of Aker Solutions.
Mads Hjelmeland, a Norwegian national previously SLB’s Director of Subsea Production Systems, has been appointed Chief Executive Officer of OneSubsea.
“OneSubsea’s extensive technology portfolio and engineering expertise enable us to address future market trends and needs at a unique scale. In doing so, we aim to fulfil our purpose of expanding the frontiers of subsea to drive a sustainable energy future,” said Hjelmeland. “We will accelerate innovation and contribute to the ambition of our customers to optimize their production and reduce emissions in their subsea operations.”
OneSubsea will be headquartered in Oslo, Norway, and Houston, Texas, with 11,000 people working in all key operating regions around the world.
Aker Solutions is a 20 percent owner in the joint venture, with SLB holding 70 percent and Subsea7 holding 10 percent. In addition, Aker Solutions receives a total consideration of USD 700 million for the sale of a 20 percent ownership in the joint venture, with settlement as follows:
Aker Solutions will recognize an accounting gain of about USD 1 billion from the transaction in the fourth quarter 2023.
Aker Solutions has retained about USD 300 million in operational cash flow from the subsea business from the second quarter 2022 to date. The subsea joint venture will be an important contributor to Aker Solutions profits moving forward through the 20 percent ownership in a larger and stronger subsea company. The estimated synergy potential in the new joint venture is more than USD 100 million per annum in the medium term and the joint venture will have an attractive dividend policy.
Aker Solutions estimates 2023 revenues, excluding Subsea, to be about NOK 34 billion. This business has a solid order backlog of more than NOK 73 billion, providing strong visibility moving forward, and is well positioned to seize opportunities in rapidly changing energy markets.
In the third quarter, Aker Solutions will report on its three current reporting segments. Starting from the fourth quarter 2023, Aker Solutions will report on its two segments; Renewables and Field Development, and Life Cycle. In addition, Aker Solutions will, in accordance with IFRS, report its 20 percent ownership in the subsea joint venture according to the equity accounting method. Aker Solutions will hence recognize 20 percent of the joint venture’s net income on a separate line in its Profit & Loss Statement. Future dividends from the joint venture will be recognized in Aker Solutions’ Cash Flow Statement under cash flow from investing activities, and the 20 percent ownership will be booked as an asset on Aker Solutions’ Balance Sheet.
SLB (NYSE: SLB) is a global technology company that drives energy innovation for a balanced planet. With a global footprint in more than 100 countries and employees representing almost twice as many nationalities, we work each day on innovating oil and gas, delivering digital at scale, decarbonizing industries, and developing and scaling new energy systems that accelerate the energy transition. Find out more at www.slb.com.
Subsea7 is a global leader in the delivery of offshore projects and services for the energy industry. Subsea7 makes offshore energy transition possible through the continuous evolution of lower-carbon oil and gas and by enabling the growth of renewables and emerging energy. Find out more at www.subsea7.com.
Moira Duff – Director of External Communications
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James R. McDonald, VP Investor Relations
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