Oil & gas prospects cheer Wood Group amid engineering project delays

London – John Wood Group PLC expects revenues this year to be down on 2009, particularly in the downstream, process and industrial market, which it expects to remain soft throughout 2010. In upstream, however, the company reported a good prospect list and anticipates seeing an increase in volumes later in 2010 and into 2011, while its subsea and pipeline activities continue to generate good levels of business.

Looking ahead, we believe the fundamentals for oil & gas services and gas fired power generation remain strong, said chairman, Sir Ian Wood. However, he added, Wood Group’s development-related engineering business continued to be impacted by project delays.

In the production facilities area, Wood reported seeing good activity across longer-term contracts in the North Sea. The company, he noted, had agreed contract extensions with Total and Hess. and was seeing an increasing level of international opportunities, including a recently secured a contract extension with Brunei Shell Petroleum.

Wood Group’s Australian business was developing well and a new joint venture, focused on the coal seam methane market, had recently won its first long term operations support contract, the chairman stated.

In well support area, the group’s electric submersible pump and pressure control businesses continue to develop their international activities, while US gas-related activities in pressure control and logging services are benefitting from increased volumes as a result of the higher US rig count.

In gas turbine services, Wood Group expects “reasonable overall demand” for its oil & gas and power aftermarket services for the year, but, it added, maintenance deferrals experienced in 2009 are continuing into the first half. In power solutions, the company is expects project awards later in the year.