Kvaerner Slides as $46 Billion Browse Plan Scrapped: Oslo MoverStephen Treloar
Kvaerner ASA dropped to a fifteen-month low in Oslo after Woodside Petroleum Ltd. scrapped the development plan for a $46 billion project in Australia that the Norwegian builder of oil platforms was bidding for contracts on.
Shares in the Fornebu-based company fell as much as 4.1 percent to 10.6 kroner, the lowest intraday level since Jan. 18, 2012, and were down 2.7 percent as of 12:05 p.m. in the Norwegian capital. About 1 million shares have been traded so far today, in line with the three-month daily average volume.
Woodside, Australia’s second-largest oil producer, abandoned a plan to build an onshore liquefied natural gas project at the Browse project in favor of studying cheaper options amid rising costs, the Perth-based company said today. The Browse partners will instead consider a floating LNG plant offshore, Woodside said.
Kvaerner had indicated that it had a 50 percent chance of being awarded a contract worth at least 10 billion kroner ($1.7 billion) for the rejected development plan, Pareto Securities AS wrote in an e-mailed note to clients today.
“This adds to the negative news-flow for Kvaerner,” the investment bank said. While the company has a “good backlog” through next year, it only has firm orders valued at about 4 billion kroner for 2015, said Pareto, which has a hold rating on the stock.
Kvaerner has slumped 34 percent so far this year, dropping as much as 6.6 percent on Jan. 21 after losing out on contracts including a $1.1 billion deal for the Aasta Hansteen gas project off the coast of Norway.