Wood Group PSN to cut contractor pay rates by 10%

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Aberdeen-based Wood Group PSN has today confirmed its plans to reduce the rates paid to its UK-based onshore limited company contract workers by 10%.

The brownfield production services business is introducing the cut with effect from 1 June in UK onshore contract workers’ rates in response to cost and resourcing challenges affecting the UK North Sea oil & gas sector.

Wood Group  PSN employs approximately 12,000 people onshore and offshore in the UK and has offices in Aberdeen, Glasgow, Runcorn and Hull

Dave Stewart, UK Managing Director, Wood Group PSN, said: “Over the last five years, contractors’ rates have risen three times more than staff rates. We need to control costs for our clients and focus on increasing our staff ratio.

“Escalating contractors’ rates are driving industry costs up, which inhibits investment, growth and long term sustainability. The UK oil & gas sector’s operating costs rose 15.5% last year to a record $14.8 billion, with the number of fields with opex costs of more than $50 boe doubling during 2013.

“We don’t believe this is sustainable, and we need to control costs to help maximise economic recovery and to safeguard the future of the North Sea.

“The Wood Review has been a catalyst for many of these discussions. Companies have an increasing focus on capital efficiency, and we must seek opportunities to work more innovatively to assist our clients with this.

“The North Sea is a relatively mature sector and we believe this kind of decision isn’t optional, it’s necessary – we have to better manage costs and focus on developing employees, in order to create job security for future generations.”

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