Energy and engineering services firm Wood Group has clinched a ‘multi-million dollar’ contract with the oil giant Saudi Aramco, sending the company’s shares up 1.75 per cent from 10.6p to 616p.
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 will provide engineering and project management services to develop the Marjan oil field, located in the country’s eastern province as part of the contract.
Wood Group will be working to diversify Saudi Arabia’s economy, expand gas production and boost energy sustainability
Last year Wood, which is headquartered in Aberdeen, acquired Amec Foster Wheel for £2.2bn, selling most of the project management company’s oil exploration projects in the North Sea.
This was seen as a way for Wood to limit its dependence on oil exploration and the likes of Friday’s falling crude oil price.
The Saudi Aramco contract is ironically part of the firm’s multi-billion dollar ‘Marjan Crude Increment Programme’, which is meant to help diversify Saudi Arabia’s economy, expand gas production and boost energy sustainability.
Robin Watson, pictured, is Wood Group’s chief executive
Wood said the plans were effective ‘immediately’.
Robin Watson, Wood’s chief executive said: ‘We have been operating in the Middle East for around 75 years and continue to ambitiously pursue opportunities to leverage our global expertise and grow our presence in the region.
‘Our commitment to growing capability and capacity in the Kingdom will be demonstrated further on this contract, where we will focus on nurturing talent, providing employment opportunities and partnering with the supply chain.’
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.
The state-owned firm shifted its legal status to that of a joint-stock company last month, 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 then with plans to list 5 per cent of its shares.
The London Stock Exchange has made a strong case for hosting the initial public offering as The Financial Conduct Authority has put forward proposals to allow Aramco to sidestep rules which make firms sell at least 25 per cent 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.