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(Alliance News) - John Wood Group PLC on Thursday said it has won a USD120 million contract extension with Shell UK, part of oil major Shell PLC, a rare bit of good news of late for the engineering services and consulting firm.
Wood will continue to provide brownfield engineering, procurement and construction work for Shell at onshore and offshore assets across the UK.
The two-year, cost-reimbursable contract extension is to provide brownfield EPC services, as well as subsea and integrity management, at the Shell UK-operated St Fergus and Mossmorran onshore terminals and the Nelson, Gannet and Shearwater offshore assets, John Wood said.
Added to the contract, Wood will now also provide EPC services on the Penguins floating production, storage and offloading facility.
The contract was first won in 2021 and employs about 240 Wood employees.
Thursday's contract announcement came at a difficult time for John Wood.
After the London market close Wednesday, it said Chief Financial Officer Arvind Balan has resigned with immediate effect, after it emerged that his professional qualifications had been incorrectly described in public statements.
Balan admitted to an "honest oversight" in referring to himself as a chartered accountant rather than a certified practising accountant. He said his decision to step down was intended to "minimise distraction at this very pivotal time with our investors and lenders."
John Wood said an announcement on his successor and interim cover will be made in due course.
The resignation came as the Aberdeen-based company is struggling with weak trading and financial difficulties. On Friday last week, John Wood said it was implementing further cost-cutting measures and considering refinancing options to offset cash outflows and mounting liabilities.
The company expects negative free cash flow of between USD150 million and USD200 million in 2025 and plans to raise up to USD200 million through asset disposals. Additionally, it is targeting USD85 million in annualised cost savings from 2026, alongside previously announced USD60 million in reductions for 2025.
John Wood has also been conducting an independent review of its projects business, accounting, and governance after taking exceptional contract write-offs. While the company said the review is not expected to impact its cash position materially, it is assessing potential prior-year adjustments that may affect previously reported earnings.
Shares in John Wood have fallen sharply in recent months, plummeting 34% last week alone. The stock was up 4.3% to 25.30p on Thursday in response to the Shell deal, but it remains down 62% so far in 2025.
By Eva Castanedo, Alliance News reporter; updated by Tom Waite, editor
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