Energy services giant Wood Group has delivered a boost for Scotland’s oil and gas sector by announcing plans to create 150 jobs after winning a deal with BP worth almost £500 million.
The Aberdeen-based firm said the contract, which covers six offshore installations as well as onshore facilities at Grangemouth, would also secure more than 700 existing roles.
The $750m (£478m) deal is the biggest won by Wood’s PSN division this year and includes the option for two extensions of one year apiece.
In a separate trading update yesterday, the group – which has more than 10,000 staff around the UK – also said its results for the year to the end of December would be in line with management hopes and ahead of last year, despite steep falls in the price of oil.
Growth at its PSN unit will offset a reduction at Wood Group Engineering, although the firm noted the fall in earnings at the latter division will not be as steep as the 15 per cent decline it predicted a year ago.
“Downstream, process and industrial has benefited from the impact of lower gas prices on refining and chemicals work,” added Wood, which is led by chief executive Bob Keiller.
Wood also announced that it has bought Swaggart, an Oregon-based provider of construction and fabrication services to the US oil and gas, industrial and agricultural sectors for an up-front $36.3m, with a further payment due in 2017 based on performance.
PSN already provides engineering, procurement and construction services for six BP offshore assets – Andrew, Bruce, Clair, Eastern Trough Area Project, Magnus and its new Glen Lyon floating production, storage and offloading (FPSO) vessel, which is under construction and due to come online in 2016.
Yesterday’s deal with BP marked the first time that PSN has secured work for the Forties pipeline system onshore facilities at Grangemouth, and adds to its current contract to support the Sullom Voe terminal in Shetland.
Dave Stewart, UK managing director of PSN, 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.
“Providing this combined service across upstream and midstream operations for the first time positions us well for continued excellence in delivering safe, collaborative and innovative services directed at maximizing productivity and efficiency across BP’s UK assets.”
The firm’s job creation plans come hot on the heels of an industry study earlier this week that warned up to 35,000 roles in the oil and gas sector could be lost in the next five years.
With oil prices close to five-year lows, BP said on Wednesday that it would spend $1 billion on a restructuring programme that will see thousands of jobs cut across its global oil and gas business by the end of next year.
• Chairman Jeff Thrall said that, despite the current volatility in prices, “what must not be forgotten is that the medium- to long-term demand prospects for oil and gas are undiminished and will of course increase with population growth and increasing industrialisation around the world”.
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