Aker Solutions' and AF Gruppen's proposed offshore decommissioning businesses merger has been given a green light by the Norwegian Competition Authority.
The Norwegian Competition Authority on Monday informed the two firms it had no objections to the merger.
As previously reported Aker Solutions and AF Gruppen in July agreed to merge the offshore decommissioning operations into a 50/50 owned company "with the goal of creating a leading global player for environmentally friendly recycling of offshore assets." Read more
They at the time said that the joint company - a global offshore recycling powerhouse - would have an order backlog of approximately NOK 2.5 billion (~$290 million at the time of the announcement).
"The transaction is subject to due diligence and final board approvals, expected to be completed during the fourth quarter of 2021," Aker Solutions said Monday.
According to the companies, the business concept of the joint decom firm is based on solving a significant societal challenge by removing and recycling decommissioned oil platforms.
"The unit aims to recycle as much of the materials from the decommissioned offshore platforms as possible. In recent years, AF Offshore Decom has achieved a source separation rate of 94 percent for the structures for recycling, where the main component is metal.
"Reusing steel results in 70 percent less CO2 emissions than ore-based production, which corresponds to an emission reduction of 1 kg CO2 per kilo of recycled steel. In 2020, AF Offshore Decom demolished and facilitated the recycling of approximately 22,000 metric tons of steel, corresponding to a reduction of alternative CO2 emissions of 22,000 metric tons," Aker Solutions said in July.
The company said in July that the offshore decommissioning market has a vast untapped potential globally, with approximately 10,000 operational platforms.
"The North Sea alone holds a significant potential with expectancy of more than 900,000 metric tons of top deck to be removed during the period from 2020 to 2029. This applies to the British, Norwegian, Danish and Dutch sectors. Based on today’s current annual decommissioning spend, it implies that it will take operators approximately 100 years to deplete liabilities for current assets. Thus, a further ramp up of pace is necessary, leading to a positive contribution to the demand for this type of services," Aker Solutions said.