Under the five year deal – which has options for two 12-month contract extensions – Wood Group will deliver engineering, procurement and construction services to six North Sea oil platforms and the Forties Pipeline System (FPS) onshore midstream facilities in Grangemouth.
Starting from next month the contract will create 150 new jobs and secure more than 700 existing positions.
Wood Group already provides engineering, procurement and construction services for six BP offshore assets – Clair, Magnus, ETAP, Andrew, Bruce, and its new Glen Lyon FPSO – which is currently being constructed and is due to come online in 2016.
This is the first time Wood Group’s PSN division has secured a contract for the FPS onshore facilities and adds to the company’s current contract to support BP’s Sullom Voe Terminal in Shetland.
Dave Stewart, UK Managing Director, WGPSN, said: “Wood Group has more than 40 years of experience working with BP globally and this new contract is testament to the partnership and understanding we have developed.”
In a busy day for Wood Group, it also announced the acquisition in the USA of Swaggart Brothers, an Oregon-based shale-gas miner and provider of civil construction and fabrication services to the US oil and gas sector for $36 million.
Swaggart’s oil and gas activities cover multiple states and shale basins, including the Permian, Eagle Ford, Niobrara, Bakken, Marcellus and Utica.
Meanwhile, in its pre-close trading update for the year to 31 December 2014, John Wood Group plc said it expected performance this year to be ‘in line with expectations – and up on 2013” even though it said that the ‘recent reduction in the price of oil is leading operators to re-consider their spending plans for 2015 with a consequential impact on service company activity’.
“Wood Group are a solid company and their message today is encouraging,” commented Mark Ward, head of execution trading at Sanlam Securities.
- Oil analysts are forecasting that BP may cut its investment/ capital spending on new oil fields by up to $2 billion in 2015 amid industry fears that it is planning major job cuts as crude oil prices remain stuck around a five year low price of $65-barrel. The more crude oil prices fall, the harder it becomes for oil exploration companies to fund investment in new fields – particularly in high-cost, hostile-environment mature fields in the North Sea.