Aberdeen-headquartered PSN (Production Services Network) has won a major North Sea contract believed to be worth about $400million (£330million) initially and which will see its UK workforce grow by about 200, to 3,000.
The five-year deal with options contract for engineering and construction support services is the biggest ever win for PSN and covers all of BP’s UK offshore assets, plus the petroleum major’s terminal at Dimlington.
The contract is a revamp of an existing arrangement, but which is currently shared with the Wood Group. However, the new contract is solus and Wood Group people will be transferred to PSN.
The current PSN personnel level with BP is about 100 offshore, with a similar number onshore.
According to Chris Taylor, UK human-resources manager, the net impact of Wood Group personnel moving across should be to roughly double that number.
He told Energy: “Obviously, from our point of view, we’re absolutely delighted to be able to bring new people into our existing network.
“The company’s intention is to transfer all employees on their current arrangements. Our goal will be to achieve a smooth, seamless transition that removes any of the uncertainties for Wood Group employees affected by this.
“We’ll work closely with Wood Group and BP to minimise the impact and make sure this is managed in the right way.
“We’ll ensure we do this by regular engagement with the individuals affected, with the aim of ensuring that all their questions are addressed quickly and sensibly.
“At the end of the day, we’re a Times Top 100 company; we want to make this experience for people coming into our organisation a good one.
“It’s about new talent joining the network, with opportunities not just in the UK, but overseas as well.”
“We’re a service company, which means our people are our most important asset and will ultimately give us the advantage when compared with our competitors. Finding and retaining the best people is key to our organisation.”
The date for actual transition will be finalised over the next few weeks.
Taylor added: “We’re in the early stage; we’ll get on with consultation almost immediately. The aim is to achieve full transition by the end of the year.
“It’s an excellent move for us and brings new (experienced) people into our organisation.”
Chief executive Bob Keiller said of the BP deal: “This contract award is a step-change for PSN. It is the largest single contract we have ever been awarded and, as BP’s single federal engineering and construction contractor for its offshore assets, it marks a high point in our long relationship with BP.
“It will not be business as usual. We are determined this contract will be an industry role model. We will challenge established practices and norms to improve safety and efficiency.
“We will drive out waste in everything we do to ensure that BP’s North Sea business remains economically viable for the years to come.
“We will optimise BP’s North Sea investment by working hard to extend the life of its assets.
“We are delighted that our track record of consistently delivering HSE excellence and quality services has resulted in the award of this prestigious contract.
“It is a great vote of confidence in the hard work and commitment of the PSN team that our relationship with BP, which dates back to the 1970s, has been extended to 2014 and beyond.”
Over the next few weeks, BP is expected to announce a number of key contracts collectively worth about $1.64billion (£1billion) for its North Sea business.
These contracts will cover all of BP’s UK offshore and onshore assets, and include:
Engineering and construction.
Platform drilling services.
Offshore and onshore maintenance.
Subsea construction, inspection, repair and maintenance.
BP says this tranche of contracts demonstrates its continuing commitment to the North Sea. The group currently invest about $3billion (£1.8billion) a year of capital and operating expenditure.
Bernard Looney, MD of BP’s UK Continental Shelf business, said: “The North Sea is a big part of BP’s global business and our goal is to sustain investment over the next decade.
“Over the coming months, we will announce a series of contract awards.
“These are more than traditional contract renewals – they are designed to fundamentally transform the way we work together with our suppliers to drive improved safety and efficiency in the basin.
“I am delighted that PSN has been awarded the first of these – the offshore engineering and construction contract. It has demonstrated its determination to succeed and I very much look forward to a long and productive partnership.”