Wood Group lands £40m North Sea deal with Premier

L More than 150 jobs to be retained as Aberdeen-based Wood Group hails ‘strong partnership’ with Premier Oil

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.

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.”

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 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 has about 29,000 employees, while Amec employs about 36,000 people. l 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 that production from Flyndre is forecast to peak at about 10,000 barrels a day, with the field expected to produce until at least 2023. Chris van der Kuyl, the chair of Entrepreneurial Scotland, has scaled new heights at Avertical World climbing centre in Dundee to reveal the theme of “scaling up” for this year’s Entrepre neurial Scotland Summit, which takes place on 4 May at Gleneagles Hotel. The entrepreneurial membership network said yesterday it had assembled a world-class line-up of speakers who will “share their knowledge, experience and insights with Scotland’s entrepreneurial leaders”.