WOOD Group has won contract to provide support services on a giant Canadian oil field which will provide a valuable boost amid the downturn triggered by the crude price slump.
The Aberdeen-based company has been appointed to work on the Hibernia platform off Newfoundland for a group of oil and heavyweights which includes ExxonMobil.
The value of the five year deal was not disclosed but it looks likely to be worth tens of millions of dollars.
The contract renews an existing deal and also includes additional maintenance work. Wood expects to recruit more staff to service the contract, which has 200 people working on it.
The award comes as Wood Group grapples with the challenges posed by the fall in activity in the North Sea, where oil and gas firms have been cuttings spending under most cost headings besides essential maintenance.
Since taking charge in January, chief executive Robin Watson has been focused on getting the group in shape to cope with what may be a long period of low oil prices.
He believes the industry is “bobbing along the bottom” of the market.
A slow recovery is in prospect. But Wood Group is not planning on the assumption that there will be a return to the kind of boom conditions seen in the North Sea during the long period of high oil prices which ended in 2014.
The group has laid off more than 2,000 people in the UK following the fall in crude prices, from $115 per barrel in 2014 to less than $30 in the first quarter.
Mr Watson sees scope to win work in the Americas, where plenty of money is being invested in areas such as the Gulf of Mexico.
Crude has recovered some ground in recent months amid hopes that major producers such as Saudi Arabia would curb output to boost prices
However, Brent crude fell around $1 to $50.7 per barrel yesterday afternoon.
Market watchers have noted the difficulties that would be involved in agreeing a deal that all the major players would buy into.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here