Monday 21 January 2019

Wood secures ‘multimillion-dollar’ contract with Saudi Aramco

The five-year contract will see Wood help the Middle Eastern firm deliver ‘one of its mega projects’ in Saudi Arabia.

Wood Group has clinched a deal with Saudi Aramco (PA)
Wood Group has clinched a deal with Saudi Aramco (PA)

By Kalyeena Makortoff, Press Association City Correspondent

Energy and engineering services firm Wood has clinched a “multimillion-dollar” contract with oil giant Saudi Aramco.

The company said the five-year contract will see it help the Middle Eastern firm deliver “one of its mega projects” in Saudi Arabia.

Wood Group, which completed its acquisition of Amec Foster Wheeler last year, said it will start providing engineering and project management services to develop the Marjan oil field in the country’s eastern province as part of the contract, which is effective “immediately”.

It is part of Saudi Aramco’s multibillion-dollar Marjan Crude Increment Programme, which is meant to help diversify Saudi Arabia’s economy, expand gas production and boost energy sustainability.

Wood chief executive Robin Watson said: “We look forward to working in close partnership with Saudi Aramco to bring our broad and enduring expertise in engineering and project management to this project, which is significant for both our client and the Kingdom of Saudi Arabia.

“Our focus will be applying our ingenuity, range of capabilities and in-country knowledge to ensure its safe and successful delivery.”

Wood Group shares were up 1.75% or 10.6p at 616p in morning trading.

Investors have been waiting for further news over Saudi Aramco’s much-anticipated stock market flotation, which the company confirmed in October was still on track for 2018.

UK authorities have been making the case for London to host the Saudi Aramco IPO

Last month, the state-owned firm shifted its legal status to that of a joint-stock company, giving Saudi Aramco the ability to sell shares to outside investors and clearing the way for the company to pursue a 2 trillion dollar (£1.5 trillion) listing.

Aramco has become the subject of a global charm offensive since it began mulling plans to list 5% of its shares.

Prime Minister Theresa May has attempted to place Britain at the front of queue, saying in November that the London Stock Exchange (LSE) had made a very strong case for hosting the initial public offering (IPO) – though New York is also seen as a strong contender.

The Financial Conduct Authority (FCA) has also put forward proposals to allow Aramco to sidestep rules which make firms sell at least 25% of their shares to gain premium status.

The Government has also issued a 2 billion dollar (£1.5 billion) loan guarantee to Aramco in a bid to boost British exports, but said it was not an attempt to woo the energy giant.

Press Association

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