It would be difficult to find a better example of Aberdeen’s drive to strengthen its role as a global oil and gas technology hub than the Wood Group’s
£600 million acquisition of fellow Aberdeen company PSN
, announced earlier this week.
The acquisition, subject to regulatory approval, will create what the Wood Group describe as “the world’s leading brownfield production services provider”. That will put the company in a really strong position to tackle a global market place which the group values at US $50 billion per annum. A Wood Group Production Facilities employee in Brazil works on the commissioning of an FPSO
Together the two businesses will have a workforce of 22,000 operating in more than 50 countries.
The acquisition undoubtedly strengthens Aberdeen’s role as the world’s second largest upstream oil and gas centre, behind Houston. Significantly, many of the hundreds of international oil and gas companies in Aberdeen are now carrying out much of their work in oil provinces outside the UK.
The Wood Group, for example, currently conducts 80% of its US $5.2 billion business overseas and many of the 300 smaller offshore oil and gas service companies based in the Aberdeen area quote figures of around 60% for their overseas business share.
"Wood Group PSN will have a larger footprint, deeper resources and capabilities and, by selecting best practices, be able to deliver additional added value to our customers,” says Allister Langlands, Chief Executive of the Wood Group. “The combined business will be better positioned to help tackle current key industry issues, including operational assurance, competency, reliability and asset integrity."
Bob Keiller, CEO of PSN, who will lead Wood Group PSN added: “I believe that by uniting PSN with Wood Group Production Facilities we have a unique opportunity to grow our business to benefit our customers and our people. Since the management buyout in 2006, we have achieved significant success and expansion.
“This transaction positions us for the next stage of PSN’s development, enabling us to strengthen our service capability to existing and new customers whilst providing enhanced career prospects for our people,” Bob Keiller continues. “Wood Group PSN will retain our clear commitment to safety, excellence in service delivery, innovation and continuous improvement, allowing us to continue to build lasting and strong relationships with clients.”
Internationalising Aberdeen’s oil and gas industry has been the drive since the 1980s. The aim is to future-proof the industry looking ahead to when the North Sea oil and gas fields finally do run dry. The intention must be to anchor the oil and gas industry here so that the industry will continue after North Sea production has run down.
In that context the Wood Group’s initiative to create a world-leading service firmly rooted in Aberdeen is highly significant.