Statoil has defended the award of the riser balcony and flare boom contracts for its Kristin platform to Spain's Dragados yard.

"This represents the best solution for the partners in the project," says Henrik Carlsen, executive vice president for Exploration & Production Norway.

He maintains that Petoro, which manages the state's direct financial interest in petroleum operations and is a Kristin licensee, has been wrong to claim that the benefit of awarding the job to the Spanish yard is being eaten up.

"Our decision to transfer 15 per cent of the work to Aker Stord means that we must pay Norwegian rates for the hours required to complete the job," Mr Carlsen notes.

"This extra expense will not come anywhere near eliminating the benefit of doing the rest of the fabrication in Spain."

Norwegian industry accounts for 80 per cent of deliveries to the Kristin project in the Norwegian Sea and more than 90 per cent of Statoil's Kvitebjørn project, which is close to completion in the North Sea.

Statoil has also awarded major contracts to domestic suppliers for its Kårstø expansion project (KEP2005) north of Stavanger and Snøhvit development in the Barents Sea.

"It's gratifying to see that fabricators in Norway have strengthened their competitiveness," says Mr Carlsen.

"That partly reflects a weakening of the Norwegian krone and moderate pay rises. The Norwegian supplies industry is a viable business."