Contract row forces SLP into administration

Published on Friday 27 November 2009 19:45

OIL platform engineering firm SLP has called in administrators after suffering amid a lengthy contract row over a previous major construction project.

The group employs 876 staff across its sites based at Lowestoft in Suffolk, Tyneside, Blackpool and New Malden, Surrey.

Administrator PricewaterhouseCoopers yesterday said it had made 45 staff redundant in Lowestoft, but would retain a "significant proportion" to work on an ongoing project with BP that will continue through to completion in spring 2010. SLP was put under "significant financial strain" after being embroiled in a customer dispute which is still unresolved, according to PwC.

The disagreement revolves around work on the Al Shaheen development project in Qatar for the shipping and oil giant Maersk, which alleges that SLP failed to honour its contractual obligations – a claim rejected by SLP.

The row has hit the group financially in terms of legal costs and by dealing a blow to its reputation with customers, PwC added.

Stephen Oldfield, joint administrator, said: "With SLP's prospective customer base being aware of its significant contractual dispute, the level of new work at SLP in recent months has been significantly reducing."