Norwegian engineering firm Kvaerner will initiate further cost cuts after losing a key Statoil contract to rival Aibel, it said on Tuesday.

"We take this as a signal to not only step up the cost reduction measures in Kvaerner but we will also evaluate if we have to change our execution model and increase the use of subcontractors," Kvaerner Chief Executive Jan Arve Haugan said in a statement.

"The scope of remaining contract opportunities in 2015 is not large enough to fill the capacity we have in the Topsides business area," Kvaerner added. "We are now going to discuss how we can handle this in the best possible way together with the employees and employee representatives."

Reporting by Balazs Koranyi