Wood Group PSN (WGPSN) has been awarded a five year contract worth about $750million by BP for engineering, procurement and construction services on six UK continental shelf (UKCS) offshore upstream assets and the Forties Pipeline System (FPS) onshore midstream facilities in Grangemouth.
The contract, WGPSN's largest contract award in 2014, includes an option for two, one-year extensions.
WGPSN already provide engineering, procurement and construction services for six BP offshore assets - Clair, Magnus, ETAP, Andrew, Bruce, and its new Glen Lyon FPSO which is currently being constructed and is due to come online in 2016.
Strong performance in WGPSN has helped maintain Wood Group's 2014 performance in line with expectations - and up on 2013 - despite a reduction in Wood Group Engineering and Turbine Activities and a downturn in operator spending.
In a statement, Wood Group said: "Operator focus on efficiency and the recent reduction in the price of oil is leading operators to re-consider their spending plans for 2015, with a consequential impact on service company activity." However, the firm said its largely reimbursable order book and prospects, balance of opex and capex activities, range of longer term contracts, and spread of business, was expected to provide relative resilience in 2015.
Wood Group PSN's strong performance is due to work in the Americas, led by US shale-related activity, including the benefit of Elkhorn, acquired in 2013, said Wood Group. The firm also announced today it is buying Swaggart, a provider of civil construction and fabrication services to the US oil and gas and industrial sectors.
Wood Group Engineering is working on projects including Det Norske's Ivar Aasen, Hess' Stampede and Husky's White Rose, which, with onshore work in the US, has lessened the impact of the slower pace of award of significant detailed engineering work, said the firm.
In Subsea & Pipelines, the firm has been working with BP on Shah Deniz and Tullow in Ghana.
