Wood Group 'saves 500 jobs' with Shell North Sea contract extension

John Wood Group has won a three-year contract extension with Shell to support the oil giant's North Sea offshore operations, which it said would save 500 at-risk jobs in Scotland.

The FTSE 250 group said the contract, which would retain more than 500 jobs, had options for two one-year extensions.

This comes after Wood Group said on Wednesday that it would cut 300 onshore jobs as it opened a period of consultation with 1,000 onshore staff due to “cost and efficiency challenges” in the industry that saw it cut 8,000 jobs last year.

The company is facing potential strikes from union members who are predicted to reject tougher contract terms that include longer hours and lower pay, with strikes possibly hitting projects across the North Sea including decommissioning work on Shell's giant Brent oilfield.

As part of the new Shell contract Wood's PSN arm (WGPSN) will provide support for Shell’s eight UKCS offshore assets, with maintenance and construction services for the Shearwater, Gannet, Nelson, Curlew, Brent Delta, Brent Alpha, Brent Bravo and Brent Charlie installations, plus engineering modifications for the latter three platforms.

“This contract safeguards long-term employment opportunities for our employees on these assets, and builds on Wood Group’s 40 year history working in partnership with Shell in the North Sea," said James Crawford, WGPSN’s managing director for the UK and Africa.

"Extending our long-term service provision across this broad portfolio of UKCS offshore assets reflects Shell’s assurance in our continued high standard of delivery and commitment to working collaboratively."

In March, WGPSN won a new three-year contract to deliver industrial services to the St Fergus gas processing plant and the Mossmorran gas processing plant and Braefoot Bay marine terminal.

In January, the company's Kenny arm began a three-year contract providing specialist consultancy services for flexible riser integrity management prior to and during operation of Shell Australia’s Prelude Floating Liquefied Natural Gas project.

In February, the company revealed it as it battled to slash costs amid the global slump in commodity prices.

The 20% reduction in Wood's workforce in 2015 included around 2,000 jobs in the UK as well as losses in the US and the Middle East as part of £100m savings eked out of the business.