The recent drama involving Kvaerner AS, at 148 one of Norway's oldest and proudest companies, and OAO Yukos, Russia's second largest oil company and an aggressive and acquisitive newcomer, unfolded like a play by the greatest Norwegian dramatist, Henrik Ibsen.
The main players were sober, straight-faced bankers examining the books of a company that was facing a financial crisis. The supporting cast was the 138,000 Kvaerner employees, anguishing over their future but in a nonspeaking role.
The script indicated that a marriage would take place-a marriage of convenience, as Yukos was a suitor because it needed Kvaerner's expertise and had the money necessary to enter Norwegian society.
The Russian company's main interest was always focused on Kvaerner Hydrocarbons, the London-based subsidiary of the company. Yukos accounts for 38% of all orders handled by this subsidiary, which is participating in the development of Yukos's part of Priobskoye oil field in Western Siberia.
Yukos formed an alliance with Kvaerner last year to support it in developing Priobskoye, a potentially lucrative oil field with proven reserves of 4.1 billion boe. Yukos officials estimate that Priobskoye will provide 34% of their company's oil production in 2005. The field now accounts for 10% of Yukos production.
When it was purely a business arrangement, the Norwegian financial establishment was happy. But when Yukos emerged with its rescue plan, which would have led to the Russian company eventually taking control, old passions were stirred.
Enter, stage left
Aker Maritime AS, a long-time competitor of Kvaerner's and a company also active in the oil and gas services sector, rekindled its interest in its rival. It had been rejected as a partner by Kvaerner several times over the years and had become its largest shareholder. The interest of Yukos led to a new urgency in the relationship, and the day before Yukos was to make its definitive proposals and go to the shareholding family to seek the hand of Kvaerner, Aker Maritime announced its own rescue plan. It proved more acceptable to the Norwegian financial and political community.
Left at the altar
A marriage was arranged, and Yukos was left at the altar. It will have the satisfaction of seeing the shareholding it had built up in Kvaerner during the process secured and probably becoming a growing asset on its books. Its business relationship with Kvaerner is now more secure, and it will still have Kvaerner's expertise from its hydrocarbons subsidiary working for it. And it has alerted the international financial community that it is prepared to become an active player in the market to protect its interests.
Kvaerner's skilled oil and gas industry staff now has improved job security, but on the face of it nothing has really changed in the Norwegian business community. It remains a community open to overseas investors but in effect an insular family. The status quo has been maintained, and what passion was stirred was quickly stifled. Just like an Ibsen play.
