Industrial Holdings

Aker is a driver and strategic force in the long-term development of Aker Solutions, Aker Drilling, Det norske oljeselskap, Aker Clean Carbon, and Aker BioMarine. Our achievements are made through close cooperation with the boards and management of individual companies.

Each of the five operating companies comprising Aker’s Industrial holdings segment is monitored by an investment team headed by a designated investment director. Aker’s management/key personnel and/or Chairman is a member of the board of directors of each company.


Read more about the companies 
 
 
 Active ownership 
Aker exercises active ownership. A strong ownership position in Aker Solutions, Aker Drilling, Det norske, Aker Clean Carbon, and Aker BioMarine is important to implementing improvements and value-creating plans.

Ownership is exercised in the board room of individual companies. Aker also functions as a center of competence. Our staff possesses valuable industrial, strategic, and financial expertise. These resources are available to the five investment managers in their continuous follow-up of Aker’s ownership interests — and to each of the operating companies.

Aker ASA’s overarching objective is to ensure long-term value creation for all shareholders, customers, employees, and for society at large. While Aker continues to develop and strengthen its companies as though ownership will be perpetual, this approach does not prevent Aker from selling companies in its portfolio of industrial holdings when these businesses can be better advanced under new owners.

Industrial strategy 
Aker is a significant shareholder with strategic influence in companies that are or have the potential for becoming leading in their fields. Industrial targeting is directed at the energy market, and sustainable fisheries management and processing of valuable ingredients derived from Antarctic krill. Aker has long traditions of value-creation and profitable innovation in these industries.

Through exercising active ownership, Aker also preserves the independence and robustness of each of the companies in its industrial holdings portfolio. In terms of financing, Aker invests in shares in the underlying company, which in turn obtains loan capital from external sources.

As of 31 December 2009, Aker has lent NOK 5.4 billion to operating companies in its industrial holdings portfolio. These investments are in the form of interest-bearing receivables and bonds issued by portfolio companies. Such in-house financing will gradually be repaid and replaced by external financing or converted into equity.

Going forward, Aker will continue to streamline its ownership role through share investments, and in this manner, generate long-term, attractive returns. Aker has the financial clout and industrial expertise to carry out major acquisitions. One example is the strategic acquisition of a major stake in Det norske. Here, Aker was instrumental in securing a valuable industrial solution by merging Det norske and Aker Exploration, thus becoming the leading shareholder in the second-largest exploration and production company on the Norwegian continental shelf.

As an active owner of industrial companies with attractive value potential, Aker’s agenda is to contribute to long-term solid returns for shareholders. Focus is on profitable operations and growth, capital structure, and industrial measures. Acquisitions, mergers, and transactions typically are made by the industrial companies, themselves.

Aker contributes equity and expertise. People build successful companies.


THE COMPANIES:
 
 
 
 
 (22% of Aker‘s total assets) 


Aker Solutions is a globally leading supplier of technologies, products, and solutions for the energy and process industry. The energy market generates more than 80 percent of revenues. The Group holds a unique position in growth markets such as oil and gas production at deepwater fields, in Arctic zones, and in other regions with challenging climates.

Board Chairman: Øyvind Eriksen
President and CEO: Simen Lieungh
Aker investment director: Øistein Widding

Aker’s engagement 
Indirectly owns 24 percent; the shareholding’s value was NOK 4.1 billion as of 31 December 2009. Øyvind Eriksen and Kjell Inge Røkke represent Aker on the Board of Directors. Ownership in Aker Solutions is exercised through Aker Holding, which is owned by Aker (60%), the Norwegian government (30%), SAAB (7.5%), and Investor AB (2.5%). Aker Holding owns 41 percent of Aker Solutions shares

Aker’s view of Aker Solutions 
Well positioned as to long-term growth trends in offshore markets for deepwater or harsh-weather oil and gas fields. These are regions oil companies will seek to develop to replace declining production elsewhere. Over the short term, investment levels in the energy sector reflect global economic uncertainty.

Aker Solutions value drivers: Build on current positions and achievements. Develop organically and structurally. Enhance quality and profitability. Strengthen product and technology segments such as subsea and drilling systems. A strategic adjustment to deliver greater service content in all business areas will improve overall predictability and reduce the Group’s exposure to oil and gas industry investment cycles.

Aker will actively pursue improvements in quality, business operations and good costumer relations. Aker Solutions will demonstrate performance that meets and exceeds the best in the industry.

Aker Solutions’ business activities span a wide range of products and services. Aker will work to simplify that structure and act as a driver in identifying and acting on structural opportunities for Aker Solutions business areas and units.



 
 

 (28% of Aker‘s total assets) 



Aker Drilling owns and operates two of the world’s largest and most advanced offshore drilling units. The rigs – Aker Barents and Aker Spitsbergen – will set new standards as to secure, efficient, and environment-friendly deepwater drilling operations under harsh weather conditions. Demand for advanced deepwater drilling rigs is expected to remain high over the next few years.

Board Chairman: Bjarne Borgersen
President and CEO: Geir Sjøberg
Aker investment director: Per-Ola Baalerud

Aker’s engagement 
Wholly owned subsidiary and Aker’s largest industrial engagement, in terms of invested capital. Total exposure is NOK 6.5 billion, of which NOK 3.5 billion is equity. Liv Dingsør and Olav Revhaug represent Aker on the Board of Directors.

Aker’s view of Aker Drilling 
First-rate rig company, although start-up has proven demanding due to issues beyond Aker Drilling’s control. Contract start-up for Aker Barents was 26 July 2009. The rig is operating under long-term contract with Det norske; the oil company can extend the agreement. Aker Spitsbergen began its contract with Statoil on 27 August 2009. Statoil has the option to extend the long-term drilling contract.

The two semi-submersible Aker H-6e platforms are designed for deepwater drilling operations worldwide especially under harsh conditions — year-round. The rigs are constructed for drilling 10 000-meter-long wells at water depths of up to 3 000 meters.

Once fully operational, the two rigs will generate combined revenues of about USD 1 million per day. The most important value driver is that the rigs operate safely, efficiently, and with excellent uptime, which benefits Aker Drilling’s customers while generating a stable cash flow.

At the top of Aker’s agenda as an industrial owner is making sure both rigs have predictable operations, implementing agreed-upon upgrades during the summer 2010, and maintaining an optimal capital structure for Aker Drilling.






 
 
 (7% of Aker‘s total assets) 


Det norske oljeselskap is the second largest oil company on the Norwegian continental shelf — in terms of operatorship, licenses, and exploration activities. The merger of Aker Exploration and Det norske in 2009 forged a dynamic Norwegian continental shelf exploration and production company that is well positioned for growth via innovation, independence, and a willingness to tackle challenges.

Board Chairman: Kjell Inge Røkke
President and CEO: Erik Haugane
Aker investment director: Maria Moræus Hanssen

Akers engagement 
Largest owner, holding 40.4 percent of shares. The value of the shareholding as of 31 December 2009 was NOK 1.5 billion. Kjell Inge Røkke and Maria Moræus Hanssen represent Aker on the Board of the post-merger company.

Aker’s view of Det norske oljeselskap 
Exploration will be the main activity in 2010, so that valuable discoveries can be brought into production quickly. Det norske was awarded ownership interests in 10 offshore licenses, six of which were operatorships, in the Awards in Predefined Areas (APA) licensing round announced in January 2010. Det norske’s goal-oriented methods achieve greater production at new and existing reservoirs.

Over the next three years, an aggressive exploration strategy will be a priority. Adequate rig capacity is decisive in this phase, and the company is well equipped with two available rigs. Det norske is planning to drill some ten exploration wells in 2010.

As majority owner, Aker will promote Det norske growth — organically and through continued restructuring on the Norwegian continental shelf. Opportunities are assessed on an ongoing basis. Aker’s goal is that Det norske shall achieve a significant upstream position on the Norwegian continental shelf.

Det norske’s exploration drilling during the next three years is fully financed. However, additional capital will be needed to launch field development projects, the first of which is scheduled to get underway in 2011. On-stream, it will raise the company’s output from the current level of just under 2 000 barrels a day, to the targeted 15 000 to 20 000 bpd within five years, and an additional 50 000 bpd by 2020.




 
 
 
 (0,5 % of Aker‘s total assets) 


Aker Clean Carbon develops technology and delivers turnkey facilities that remove the climate gas CO2 from the emissions of gas and coal-fired power plants and industrial facilities. The company owns and operates a mobile carbon-capture technology demonstration facility that provides valuable process-improvement and cost-structure data. Worldwide interest in CO2 capture is growing.

Board Chairman in 2009: Liv Monica B. Stubholt
CEO: Jan Roger Bjerkestrand
Aker investment director: Liv Monica B. Stubholt


Aker’s engagement  
Initial shareholding reduced from 70% to a 50/50 partnership with Aker Solutions following a private share placement in 2009. The value of Aker’s 50% stake is NOK 75 million, which corresponds to cost price. Liv Monica B. Stubholt and Øyvind Eriksen represent Aker on the Board of Directors.

Aker’s view of Aker Clean Carbon 
Focus is on completing the Mongstad facility and bidding on mature potential projects outside Norway. Aker Clean Carbon and Aker Solutions are participating in a ScottishPower-led consortium with Shell and National Grid to build a full-scale CO2-capture, transport, and storage facility for Europe’s third-largest coal-fired power plant at Longannet, Scotland. A final tender round is underway; the project owner is the UK government.

Publicly funded projects dominate the market. Interest in such projects has become keener, yet some anticipated projects have been cut back or postponed. The carbon capture market is far from mature. Investments in carbon capture at power plants and industrial facilities are not currently feasible without public funding. Costs associated with climate gas emissions remain low.

Nevertheless, the worldwide market is growing due to public funding for carbon-capture research, development, and technology demonstration projects. Aker Clean Carbon’s ability to secure contracts will require a keen understanding of public-policy processes affecting the market for carbon-capture solutions. Securing Europe as its home market ranks among current priorities.




 
 
 (7% of Aker‘s total assets) 



Aker BioMarine combines expertise in deepwater fishing and harvesting with marine biotechnology. The company controls the entire value chain — from krill harvesting in Antarctic waters through sale of nutritious products. Operations are focused on the Superba™ Krill dietary supplement brand and high-value Qrill™ aquaculture feed ingredient.

Board Chairman: Kjell Inge Røkke
President and CEO: Hallvard Muri
Aker investment director: Ola Snøve


Aker’s engagement 
83.3% shareholding in the listed biotechnology company. Value of the shareholding was NOK 778 million as of 31 December 2009. Aker is represented on the Board of Directors by Kjell Inge Røkke.

Aker’s view of Aker BioMarine 
The start-up phase — marked by major investments — is now over. Aker BioMarine has established solid customer relations with leading international suppliers of dietary supplements. This ensures distribution and sales clout for Superba™ in growth markets. Turning to aquaculture, scientific documentation shows that adding Qrill™ to the feed of fish and shrimp promotes growth and generates significant value for fish farmers.

Shareholders have experienced a challenging journey. Commercializing products and commencing normal operations took longer than planned. But the period of major investments is over. A refinancing of the company will be carried out to establish a solid foundation for the company’s future growth and development.

Aker will develop Aker BioMarine through efficient operations and organic growth. The company’s foremost value driver is Superba™ Krill sales to the dietary supplement market. Growth in the omega-3 market is fast-paced. The US market is growing at more than 20 percent annually. The krill-derived omega-3 market segment is small, and uncertainty remains as to its future size. Projected sales of krill oil for 2010 are 120 metric tons (MT). Aker BioMarine has sufficient raw materials and harvesting capacity to produce up to 2 000 MT annually of superior Antarctic krill oil.