Aker Solutions: Current renewables industry framework not sustainable

Norwegian engineering and construction giant Aker Solutions is tendering for Nkr105 billion (US$10.2 billion) worth of new work and, even though its outlook for oil and gas is positive, it believes the current frameworks around the renewables energy industry are not sustainable.

"Renewables is currently a young and developing industry with some first-of-a-kind projects," the company said today in its half-year results.

"Aker Solutions experiences that the current frameworks the industry operates under are not sustainable for the longer term."

"The company sees a clear need for change in the way authorities, operators and suppliers work together. To secure a sustainable future for the industry, authorities have a key role to play in order to develop a sustainable framework to increase predictability and improve risk-reward balance in the industry."

Of the Nkr105 billion of tendering, about 15% is related to the energy transition.

In general, the Oslo-based company is seeing increased market activity moving forward, especially in the oil and gas segment boosted by the tax incentives in Norway to support the supplier industry.

“The market outlook overall remains positive, despite some supply chain constraints and inflation brought on by the recent and unfortunate geopolitical events. Aker Solutions is well-positioned to capitalise on both near-term recovery and for the longer-term structural change in the energy markets,” said chief executive Kjetel Digre.

Staff recruitment

During the first half of 2022, the company has recruited more than 1000 new skilled employees globally.

This means the company is on track with its target of hiring 2000 new colleagues in 2022.

During the second quarter, the company completed the acquisition of Frontica Engineering, a Norwegian engineering company with 50 skilled engineers.

Oil and gas dynamics

The company believes the oil and gas price outlook is favourable, but the operating environment is dynamic and the company is monitoring the supply chain situation.

Global oil and gas supply is projected to remain constrained in the coming years and energy security will remain a priority, supporting the company's view of "multiple years of spending growth" by its global customers.

In the second quarter, the company's financial highlights excluding special items included: