John Wood Group wins $250m Brunei contract extension

John Wood Group has won a two-year contract extension worth about $250million (£197million) to provide services to Brunei’s largest energy producer.

The Scottish engineering and consulting company said the new deal would focus on upgrading Brunei Shell Petroleum’s offshore energy assets to improve production capacity while lowering emissions.

Among the services its operations business division intends to deliver range from construction to procurement, brownfield engineering and management of the offshore marine fleet.

Wood said services would be supplied to BSP’s 20 biggest offshore installations, which are responsible for approximately 80 per cent of the firm’s total oil and gas production.

BSP is a joint venture between the Government of Brunei Darussalam and oil giant Shell, employing about 4,000 people and 20,000 contractors, according to its website.

Shell’s presence in Brunei dates back to at least 1929 when the British Malayan Petroleum Company discovered oil in the Seria field in northwest Borneo.

Ken Gilmartin, chief executive of Wood, said: ‘This extension shows progress on our strategy, which focuses on reimbursable projects and complex work in critical industries that we laid out last year and demonstrates the strength of our relationship with an important client in a key region.

‘It is also testament to our track record of performance excellence, safe operations and innovative technical expertise.

‘The award also highlights our continued focus on ensuring energy security across the region whilst minimising the environmental impact of doing so.’

Wood Group shares were 1 per cent up at 136.6p on Monday morning, yet they have plunged by over three-quarters in the past five years, mostly due to the lockdown-era slump in oil prices causing energy firms to cut back on new projects.  

Its latest deal follows an eventful year for the Aberdeen-based group, which was a takeover target for private equity house Apollo Global Management.

After rejecting four proposals, Wood agreed to open up its books in April when the American asset manager put forward a 240 pence per share offer.

But the following month, Apollo decided to walk away without explanation, meaning it cannot make another approach until at least November.