Energy services firm Wood (LON:WG) confirmed is has won three new contracts with BP (LON:BP), extending a decades-long relationship between the two firms.
Wood chief executive Ken Gilmartin said the agreements “enhance” its partnership with the oil major, a relationship which “continues to go from strength-to-strength”.
The agreements cover all of BP’s business units and will see Wood providing support for offshore and onshore assets across its upstream, midstream and downstream energy markets.
A new, three year master services agreement (MSA) for engineering, procurement and construction management (EPCm) services, as well as two extensions to existing long-term frameworks for conceptual engineering and pre-FEED/FEED engineering are in addition to a multi-region asset management agreement signed in September 2022, Wood said.
BP has also awarded a three-year global EPCm framework contract to Kent, the privately-owned international energy services group backed by the Saudi Arabia-based Nesma and Partners.
News of the deal delivered a shares boost for Wood, with an 11% rise in early trading.
It comes after Gilmartin admitted the firm would have to undertake a review of its books following write-offs of large scale contracts. The shock announcement in November prompted 60% share price collapse for the beleaguered energy services group, from which it is still recovering. Completion of the independent review, being led by big four auditor Deloitte, has not yet been announced.
Commercial details of the contracts with BP were not revealed, but Ashley Kelty of Panmure Liberum said they would be “positive” for Wood and that he expects the agreements will be “material revenue generators for WG and should be accretive over the term of the agreements”.
Gilmartin said: “As a company we thrive in supporting our clients to deliver some of the most complex and challenging projects in the energy and materials markets and we look forward to working with BP to support the full lifecycle of capital projects worldwide.”
Speaking on Kent’s agreement with BP, chief executive John Gilley said: “This framework is perfectly aligned with Kent’s strategy of fostering long-term relationships and we are excited to continue supporting BP in their energy journey by delivering high-quality, safe and sustainable solutions across their asset base.”
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