Wood extends Shell contract to include work on new North Sea oil vessel

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ENGINEERING firm Wood has signed a two-year extension to its contract with Shell for work on the oil giant’s newest floating vessel in the North Sea.

The contract, first signed in 2021, was originally only for “brownfield engineering, procurement and construction services” to five of Shell’s UK facilities. The two-year extension, worth US$120m, will now see Wood complete work on Shell’s new floating, production, storage, and offloading vessel in the Penguins oil field in the northern Shetland Islands, Scotland.

Shell announced plans for the Penguins vessel in 2018, making it their first new manned vessel in the northern North Sea in 30 years, promising to unlock 80m barrels of oil. At its peak it is expected to produce 45,000 barrels of oil per day.

In February 2023, the vessel was boarded by Greenpeace activists who occupied it for 13 days while en route to Scotland, resulting in a settlement prohibiting similar action for at least five years.  

As part of the contract extension, Wood will continue to work at Shell’s plants at the St Fergus and Mossmorran onshore gas terminals in Scotland, along with offshore facilities in the Nelson, Gannet, and Shearwater oil and gas fields in the North Sea. Wood says the extra work will be completed by 240 workers.

Ken Gilmartin, CEO of Wood, said: “We are proud to continue our decades-long relationship with Shell in the UK, focusing on the continued delivery of safe, reliable energy supply. The extension is recognition of our people and their commitment to deliver best-in-class outcomes for our clients.”

Sustainability goals

Wood says it aims to “fight climate change by [reducing] our own and our clients’ carbon footprint”.  To achieve this the company has set a goal of doubling its 2021 revenue from “sustainable solutions in energy transition and sustainable materials” by 2030, although the oil and gas sectors remain the company’s biggest income stream.

According to Wood’s latest annual report, the company’s total revenue from oil and gas projects in 2023 was US$3.4bn, up from US$3bn in 2022. Revenue from “power, renewables, hydrogen and carbon capture”, meanwhile, was US$464m in 2023, up from US$409m in 2022. Both income streams saw increases of around 13%.