Wood Group wins £261m deal to service Harbour Energy’s North Sea operations
Wood Group has entered a new strategic partnership with Harbour Energy to service its North Sea operations in a $330m (£261.4m) deal – including support to help the company decarbonise.
The consulting and engineering giant will oversee the domestic projects of the largest independent oil and gas producer in British waters through the new master services agreement.
This will feature decarbonisation solutions for a number of Harbour’s offshore assets critical to UK energy security, with the fossil fuel producer already involved in multiple carbon capture projects.
Under the arrangement, Wood will also provide support for engineering, procurement and construction (EPC) and operations and maintenance (O&M) alongside digital services.
The deal will run initially for five years, with five one-year extension options covering Harbour’s operated assets, including its J-Area, Greater Britannia Area, Solan and AELE (Armada, Everest, Lomond and Erskine) hubs.
Wood believes the partnership will support the employment of hundreds of people from its operations in Aberdeen and offshore across the two EPC and O&M contracts, with further recruitment expected next year.
Steve Nicol, Wood’s executive president of operations, said: “We share a commitment to ensuring safe, reliable and sustainable energy production and are confident our integrated digital solutions and world-leading engineering, operations and decarbonisation expertise will enable Harbour to maximise its investment and ensure the UK continues to have the energy mix it needs.
Audrey Stewart, Harbour Energy’s vice-president of supply chain, added: “Harbour is excited to develop our relationship with Wood and the signing of this contract is an important step forward in establishing our suite of long-term strategic partnerships across our North Sea assets.”
While Harbour is committed to developing Viking and Acorn CO2 capture and storage (CCS) projects in the UK – amid growing expectations of a final investment decision – the company is still looking to diversify operations from domestic waters.
Last month, it posted a billion dollar swing in its balance sheet, suffering an $8m (£6.4m) loss for the first six months of trading this year – weighed down by the higher UK windfall tax rate and falling fossil fuel prices.
As it stands, 85 per cent of Harbour’s business is in the UK, although the company has confirmed that the Zama oil development in Mexico has been approved by the country’s regulator, and a multi-well Andaman Sea exploration drive will begin in Indonesia in October.
Wood and Harbour have begun trading up 1.22 per cent and 0.87 per cent respectively this morning following the news.
Both companies are listed on FTSE 250 of the London Stock Exchange – Wood is priced at 158.1p per share, with Harbour at 255.8p per share.