Aberdeen firm's 'biggest' contract of year
Wood wins $750m BP deal and buys US shale services firm
Oil services company Wood Group has secured a $750 million contract with BP, its biggest of the year, and acquired a US civil construction and fabrication business for $36.3 million in a move that strengthens its foothold in the shale gas industry.
The five-year deal with BP is to provide engineering work at six North Sea upstream sites and at onshore facilities in Grangemouth. It will create 150 jobs and secure 700 existing roles. There is an option for two and one-year extensions.
Wood has also unveiled the acquisition of Swaggart Brothers, based in Oregon. It is a 200-employee company with activities across a number of states and shale basins.
It will operate within the Wood Group PSN division and continue to be led by the existing management team under chief executive Lincoln Swaggart. Robin Watson, Wood Group PSN chief executive said it would “align with his company’s core values”.
Lincoln Swaggart said: “We have room for growth in the US shale sector.”
In a trading update today, Wood says its long term order book and spread of businesses should allow it to withstand the fall in oil prices.
It said it anticipates 2014 performance to be in line with expectations and up on last year. Growth in Wood Group PSN production services offsetting a reduction in the engineering and turbine activities.
The company acknowledges that leading operators are re-assessing their spending plans for next year and that this will have an impact on oil services companies.
“We expect our largely reimbursable order book and prospects, balance of opex and capex activities, range of longer term contracts, and spread of business to provide relative resilience in 2015 and we will see the full year benefit from completed acquisitions.”