AKER Solutions said yesterday its fourth-quarter results would be hit by an accounting loss.
The Norwegian company said it had agreed a deal with Total for additional work on the Frigg decommissioning project which would have a positive cash effect of about £95million but would still result in a loss for the quarter.
It estimated that its earnings before taxes, depreciation and amortisation for 2008 would be about £295million. Results for 2009 would not be affected by the agreement, the company added.
Aker Solutions said the removal of installations from the Frigg field in the North Sea was complicated and demanding work, both concerning environment and safety issues.
It added that the scope of work had increased beyond the fixed-price contract signed in 2004. Aker said: “We had previously based our estimates on the client covering a substantial part of these additional costs.
“After long and complex negotiations we have achieved partial compensation, though we are still disappointed in the outcome.”
Oil prices fell by more than $2 towards $34 a barrel in America yesterday on signs of an end to a gas supply row between Russia and Ukraine and after a ceasefire between Israel and Hamas in Gaza eased supply concerns.
Markets also remained under pressure from the weakening global economy.
US crude oil for February delivery fell to a low of $33.89, down $2.62, before recovering to trade at $34.53.
In London, Brent crude for March delivery hit a low of $43.80, down $2.77, before edging up to $44.50, maintaining its unusual premium over US crude.