Repsol Sinopec Resources UK has unveiled a dramatic new contract strategy which will see up to 750 North Sea workers transferred to new employers.
The Spanish/Chinese joint venture has selected ten contractors to deliver all maintenance and construction labour, engineering support services and fabric maintenance work across a group of North Sea assets, work thought to be worth £250million a year over five years.
Wood Group PSN, which has been the operator’s main contractor for over 12 years faces the biggest adjustment, will see 750 of its staff move over to other firms which have signed onto the framework deal.
The Aberdeen-based firm remains a tier one contractor to the group but it has been cut out of providing labour supply. The group said “new, simplified” workforce contracts have been awarded to Amec Foster Wheeler and Petrofac instead.
Other firms that have won work with Repsol Sinopec on a “call-off basis” include PD&MS Group, Apollo Offshore Engineering and Step Change Engineering which will provide design, construction and front end engineering design (Feed) capability as tier two contractors. Global Energy Group’s Caledonian Petroleum Services and Ross-shire Engineering will deliver tier three fabrication work.
Fabric maintenance contracts have been awarded to Stork and Bilfinger Salamis.
Bill Dunnett, Managing Director of Repsol Sinopec said: “Now is the right time to make a fundamental change to the way we manage our major service contracts.
“These awards will drive greater innovation and competition in the supply chain, and improve accountability within our own business. We’re also looking to the new contractors to help in the development, training and competency assurance of our teams.
“Performance of our new contracts is a fundamental element of our ongoing transformation to an effective and sustainable operation – even in the current challenging market. This is a great opportunity for the local supply chain that will help us deliver long-term value to our shareholders, partners and employees.”
A spokesman for Repsol Sinopec declined to confirm the value of the contracts.
A spokeswoman for Wood Group said the firm was “pleased” to have been included in the framework agreement for brownfield engineering services support, but added:
“We are obviously disappointed not to have been selected by Repsol Sinopec for the new style offshore labour supply contracts, which replaces the previous operations and maintenance services contract.
“We will work closely with Repsol Sinopec, Amec Foster Wheeler and Petrofac to ensure a smooth transition.”
Wood Group PSN will continue to operate the Beatrice field platforms, which is on track to be decommissioned, and the associated Nigg terminal on a duty holder basis.
Walter Thain, managing director – West for Petrofac, said he was “delighted”.
“We are well positioned, through the award of the engineering services and offshore labour contracts, to make a fundamental difference to achieving effective and sustainable performance by focusing on improvement, innovation and accountability.
“We look forward to working collaboratively to effect a safe, smooth and seamless transition to operations across the portfolio for which we will be responsible.
“In addition, we will be deploying our scalable approach to engineering services delivery to ensure we provide high quality and cost effective services which add real value to Repsol Sinopec.”
Repsol Sinopec is jointly owned by Spanish energy giant Repsol (51%) and Sinopec Group (49%) following Repsol’s acquisition of the global assets of the former Talisman Energy in 2015.
It operates ten fixed offshore platforms; two floating production facilities; and onshore terminals at Flotta in Orkney and at Nigg Bay.