Norwegian firms Aker Solutions and AF Gruppen intend to merge their offshore decommissioning operations into a 50:50 joint venture.
The duo said they were creating a leading player for the environmentally friendly recycling of offshore assets, “unleashing global decom potential” in the process.
Aker and AF said their two units boasted extensive capabilities in running large-scale offshore projects, lifecycle and value chain competence and a broad global portfolio of customers and projects.
The joint company will have an order backlog of about £210 million.
The transaction is expected to be completed during the second half of 2021, subject to due diligence and regulatory approvals by the Norwegian Competition Authorities.
Kjetel Digre, chief executive officer of Aker Solutions, said: “By combining Aker Solutions’ offshore, engineering and project execution capabilities with AF Gruppen’s decommissioning and construction capabilities, we aim to increase customer efficiency throughout the decommissioning process and maximise the total recycling potential.
“The company will be uniquely positioned to offer integrated end-to-end services from well plug and abandonment to planning, removal, dismantling and recycling at its own environmental base.
“Sustainability and circular economy ambitions will be key focus areas for the new entity, and we see increased activity in the market for decommissioning and recycling moving forward.”
In 2020, AF Offshore Decom recycled about 22,000 metric tonnes of steel, corresponding to a reduction of alternative CO2 emissions of 22,000 metric tonnes.
Amund Tøftum, CEO of AF Gruppen, said: “Our ambition is to establish a unique recycling player, positioned to offer a total decommissioning solution for the global offshore recycling market.
“The two parties have complementary strengths and capabilities, with potential to build a global offshore recycling powerhouse. Furthermore, the new entity will deliver on the green, circular ambitions outlined in the UN’s sustainable development goals.”