Energy service giant Wood Group said yesterday it expected a problem project in the Middle East to be profitable in two years.
The Aberdeen company said Wood Group PSN (WGPSN), its global production-facility support division, had been working to improve its performance on the contract with Petroleum Development Oman (PDO), but still expected losses on the deal of about £12.4million this year.
Wood said it expected to reduce its losses on the £500million PDO deal next year, and that the contract would be profitable in 2014. About 2,600 people were recruited for the seven-year deal with PDO, signed before Wood Group took over PSN last year.
The Aberdeen firm has since had problems recruiting more skilled workers for the development.
Wood said WGPSN had grown over the year, however, thanks to strong performance in the North Sea and North America.
In a trading update yesterday, the company said it expected earnings before interest, tax and amortisation (ebita) to be up nearly a third at its engineering arm in 2012.
The division, which now employs 10,300 people, reported ebita of £100million in 2011.
Wood Group said its engineering arm remained active on offshore projects in the Gulf of Mexico, adding: “Overall, performance for 2012 is anticipated to be in line with expectations. We anticipate further good growth in 2013 and remain confident in the longer-term prospects for the group’s market-leading services in oil and gas and gas-fired power-generation markets.”
Wood Group’s annual turnover was nearly £4billion in 2011.