Australian contract provides boost for Wood

WOOD has won more work on a giant gas development off Australia from a US major in a deal that provides a vote of confidence in the firm which will likely be worth millions of dollars.

Aberdeen-based Wood has signed a two-year extension of a framework agreement covering the provision of services ranging from design to construction management for Chevron on the Gorgon project off Western Australia.

The value of the agreement was not disclosed.

However, Chevron describes Gorgon as one of the biggest natural gas projects in the world. The field is expected to be in production for more than 40 years.

Wood won a two-year framework contract to work on Gorgon from Chevron in 2015.

Contract wins in overseas markets helped reduce the impact of the downturn in the North Sea amid the sharp fall in the crude price from 2014.

Led by chief executive Robin Watson, Wood acquired Amec Foster Wheeler for £2.2 billion last year partly to help reduce its reliance on the North Sea.

The rise in the crude price since late 2016 appears to have triggered a recovery in the oil services market.

Wood noted last week that North Sea activity was increasing from a low base but growth was strongest in the Asia Pacific region.