Petrofac wins £100m deal as BP reviews contracts

Published on Monday 16 November 2009 20:20

PETROFAC has announced it has won a £100 million North Sea oil services contract with BP, work previously held by Wood Group and PSN.

London-based Petrofac provides maintenance services at all of BP's offshore assets in the UK region of the North Sea, as well as its Dimlington gas terminal in Yorkshire.

Worth "in excess" of 100m over five years, chief operating officer Marous Semaan said the deal was "significant" for the firm's offshore engineering and operations business.

It is the first time the contract, specifically covering maintenance, has been awarded in this way, and is part of a major cost-cutting drive by BP, one of the world's largest oil companies.

BP chief executive Tony Hayward has said he wants to strip billions from the company's supply chain to boost margins, prompting a review of the way it awards contracts.

Most of the work covered by the contract is currently undertaken by Wood Group and PSN, Scotland's two largest oil services companies. Both of the Aberdeen-based firms are believed to have made bids for the contract.

A spokesman for BP said Wood and PSN still carried out work for the company, with PSN awarded an engineering and construction contract last week.

A spokeswoman for Wood said BP remained "an important customer", for which it has contracts both in the North Sea and internationally.