Wood Group lands £40m North Sea deal with Premier

Wood said the Premier deal will retain more than 150 jobs. Picture: Contributed

Wood said the Premier deal will retain more than 150 jobs. Picture: Contributed

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Oil and gas services giant Wood Group has secured a $50 million (£40m) contract to deliver operations and maintenance for two North Sea platforms.

The Aberdeen-based group, which earlier this month agreed a £2.2 billion deal to buy rival engineer Amec Foster Wheeler, said the contract with Premier Oil covers the Balmoral floating production vessel (FPV) in the central North Sea and the Solan installation west of Shetland.

• READ MORE: Wood tight-lipped on job losses under £2.2bn Amec deal

The two-year deal, which has the potential to be extended for up to a further three years, retains more than 150 jobs and builds on a separate contract from 2014 to deliver fabric maintenance services to the Balmoral FPV.

Dave Stewart, chief executive of Wood Group’s Asset Life Cycle Solutions business in the eastern region, said: “This contract clearly demonstrates the strong partnership we have developed with Premier Oil in the North Sea; renewing our support of the Balmoral FPV and broadening our delivery to include the Solan field, which came on stream in April 2016.

“We have consistently and successfully assured the management of safety and integrity and applied our innovation and technical expertise to maximise uptime and production, whilst also reducing field lift costs.”

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Wood’s tie-up with Amec will see the latter’s shareholders owning about 44 per cent of the combined group, which will be worth about £5bn. It is eyeing annual savings of “at least” £110 million a year, although these moves could trigger costs of about £190m in the first three years.

While Wood Group chief executive Robin Watson, who will continue as boss of the enlarged entity, has acknowledged that there would be job cuts as a result of the deal, he told The Scotsman that it would be “inappropriate” to put a figure on the potential losses at this stage.

Wood Group has about 29,000 employees, while Amec employs about 36,000 people.

First oil has been confirmed from the Maersk Oil-operated Flyndre field, located near the central North Sea Clyde field, about 180 miles south-east of Aberdeen.

Flyndre, which straddles the UK and Norwegian North Sea boundary and was discovered in 1974, has been developed as a tieback to Repsol Sinopec Resources UK’s existing Clyde platform with a single production well.

Maersk Oil chief executive Gretchen Watkins said: “Flyndre first oil represents new production for both the UK and Norway and we’re pleased to have worked with partners on both sides of the border to deliver this development. By combining experience and strong technical capabilities, Maersk Oil is helping engineer a bright future across the North Sea, and bringing new developments on stream is always a strong signifier of that.”

Production from the Flyndre field is forecast to peak at about 10,000 barrels a day, with the field expected to produce until at least 2023.

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