Aberdeen oil services jobs under threat as bidder eyes Wood
The 35p per share deal under discussion with Abu Dhabi-based Sidara would value Wood at around £240m.
The outcome of Sidara's deliberations will be awaited anxiously by staff at Wood, which grew from a fishing business to become a leading player in the global market to help firms develop and operate oil and gas facilities.
Wood employs 4,500 people in Aberdeen and the North Sea operations it runs mainly from the Granite city.
The Put Up or Shut Up deadline for Sidara to make a firm offer has been extended three times since it made an initial approach in February.
Sidara decided to scrap a £1.5bn bid to buy Wood in August last year citing concerns about geopolitical risks and financial market uncertainty.
The group's decision to return to the fray indicated it saw significant value in the expertise offered by Wood.
The company announced today that it had won a $2.8 billion (£2.1bn) contract to work on a gas processing plant in the United Arab Emirates.
READ MORE:
Scottish hydropower hopes fade as major projects face threats
SNP Government oil hypocrisy shocking amid Scottish jobs cull
Israeli-owned firm takes control of UK's biggest gas field
However, Wood has faced big challenges in recent months.
In February Wood issued a disappointing trading update and announced plans to slash costs to help reduce its debts. The company also revealed that an independent review of its key projects division had identified material weaknesses and failures in respect of financial culture, governance and controls.
Wood subsequently delayed publication of its latest annual results until June 30 citing the timing of the conclusion of the independent review and the extensive work needed to conclude the audit of last year's numbers.
Against that backdrop, Sidara has likely faced challenges in its efforts to decide on a valuation for Wood.
The task has been complicated by uncertainty about the outlook for activity in the key North Sea oil services markets.
Some firms that operate oil and gas fields have shelved plans to cut investment in new developments and upgrades following the increase in the windfall tax rate in the Budget in October.
Chancellor Rachel Reeves has faced great pressure to reduce the tax burden on the sector in recent weeks while completing work on the Labour Government's Comprehensive Spending Review. The results of the review will be announced tomorrow.
If Sidara decides to proceed to make a firm offer for Wood there will be mixed feelings in Aberdeen.
Wood chief executive Ken Gilmartin has insisted the company can prosper as an independent.
But he and other directors have said that if Sidara makes a formal offer on the terms under discussion they would be minded to recommend that Wood shareholders accept it.
Sidara has said that it recognises and wants to retain the talent offered by Wood employees. There will still be concern in Aberdeen that jobs will be vulnerable as Sidara looks to maximise the return on any investment it makes.
Meanwhile the loss of another stock-market listed firm would deprive Scotland of valuable professional services work and could leave the country struggling to interest international investors.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Herald Scotland
42 minutes ago
- The Herald Scotland
Inquiry demand over 'scandal' of 100s of jobs lost in ferry fiasco
A rejected proposal to create a Clyde shipbuilding revolution, save state-controlled Scots shipyard firm Ferguson Marine and help solve the nation's ferry crisis fronted by a Scots entrepreneur involves the creation of a fleet of 50 catamarans as part of an £800 million scheme - a fraction of the cost of those currently being built. The proposal works out at £16m per catamaran while the cost of the Scottish Government's 13 is at around £70m to date. Anger has erupted as an analysis of warnings by the state-owned ferry operator CalMac over potential and actual disruptions to passengers using two ferries on one of Scotland's busiest lifeline routes through technical faults and the ability to operate in adverse weather surrounded one of the two massively over-budget and wildly delayed ferry fiasco vessels - MV Glen Sannox. Users have told The Herald how of the two ferries operating from Troon to Arran it is the second emergency catamaran, MV Alfred - chartered for nearly two years from Pentland Ferries - that has become the 'reliable workhorse' despite being six years older than Glen Sannox which finally started taking passengers in January. Stuart Ballantyne with one of his catamaran designsAt the start of the month, the catamaran was chartered for a further five months to help cope with the continuing island ferry crisis at a public cost of £22m - that's £8m more than it cost to buy. It is believed that Alfred was modelled on designs by Stuart Ballantyne, a Scottish naval architect and chairman of Australian marine consulting firm Sea Transport Solutions who it has emerged began proposing the catamaran plan to the Scottish Government in 2008. That's seven years before state-owned ferry owner and procurer Caledonian Maritime Assets Limited (CMAL) signed off on the disastrous £97m ferry contract to build two ferries at the Inverclyde shipyard firm Ferguson Marine owned then by the Scots tycoon and entrepreneur Jim McColl after it got ministerial approval. The Glen Sannox and Glen Rosa ferries were due to start taking passengers in the first half of 2018 with both eventually to serve Arran but have run seven years or more late with costs expected rise more than five fold the original £97m contract. In the midst of the delays and soaring costs, Ferguson Marine under the control of Mr McColl fell into administration and was nationalised at the end of 2019 with CMAL and the yard's management blaming each other. CMAL has since stuck with single hull ferries in designs for a new fleet of 11 vessels, with nearly £400m of contracts going abroad. It has denied it has been anti-catamaran. Read more: Now a group of experts has joined with Mr Ballantyne and local campaigners to raise concerns about the procurement of ferries in Scotland and said there should be a public inquiry into what is considered to be a "scandal". Among the group is Professor Alf Baird, a former director of the Maritime Research Group at Napier University who has been non-plussed by Scotland's failure to grasp the nettle of the catamaran project and shipping expert and consultant Roy Pedersen, who were both part of a high powered Scottish Government-formed advisory group over the ongoing ferry fiasco which was wound up in 2022 having not met since October, 2019. Some believe it is because ministers did not like the sound of dissenting voices. Alf Baird (Image: NQ) In a 2023 dossier from one ferry user group titled "CMAL's history of obstructing medium-speed catamaran" it detailed how Dr Baird had further presented the catamaran opportunity to the expert group in 2017 but there was resistance. Ten years ago leading academic Prof Neil Kay resigned from the advisory body months after it was created and accused the organisation of sidelining the interests of passengers. Now the group that also includes activists for the Campaign to Save Inchgreen Dry Dock which is fighting to save Scottish shipbuilding said the inquiry is needed in the wake of resistance to the catamaran project and the abolition of the expert advisory group. "Dismissing ferry advisers recruited specifically for their expert knowledge of the Scottish ferry services was seen by many as a deliberate ploy on the part of Transport Scotland to avoid scrutiny of CMAL's management and procurement failures," they said. This led to "over-specified" and overpriced major vessels and an "apparent inherent bias against a proven, more efficient and reliable catamaran option that would have greatly reduced capital and operating costs". They said: " If catamarans are not suited to our island routes as has been claimed, how can the Alfred be operating so successful..." A response from Transport Scotland's ferries infrastructure and finance division when asked about the catamaran project said that "any design solutions and procurement of new vessels by CMAL would be a decision for that authority and would need to be undertaken in line with applicable legislation and process." It said: " all proposals which may benefit Scotland's ferry network. This includes all appropriate vessel designs which can enhance or improve connections across Scotland's lifeline ferry network." The group said that this had "waved away any responsibility for the runaway costs, waste, abysmal performance and general havoc created by CMAL's design and procurement decisions". They went on: "This is surely a dereliction on the part of Transport Scotland of the duty to safeguard the public purse and the well being of the communities involved, otherwise what are they being paid for? "Dr Stuart Ballantyne's catamaran designs and plans were to build the new Scottish ferry fleet at Ferguson Marine - securing hundreds of jobs - Inchgreen and Govan dry docks. The 20-year plan that was given to current deputy first minister Kate Forbes in June 2022 could provide hundreds of skilled jobs and economic benefits for our Clyde communities and Scotland. The group said: "Instead, recent orders and taxpayers' money have gone to foreign shipyards for more over-specified vessels when cheaper to purchase and operate, home built catamaran designs are on the table. " They said responses to them "laid bare the total mismanagement of Scottish ferry services that continues to be a burden on the Scottish taxpayer. "It seems clear that CMAL is not fit for purpose and that the Scottish Government is not facing up to this long standing problem. There needs to be an independent public inquiry to get to the truth. Our island communities deserve much better. "It is time to make Clyde shipbuilding great again." It was envisaged that the major catamaran project would be based at nationalised Ferguson Marine, Inchgreen dry dock in Inverclyde and Govan dry dock. The Govan dry dock dates back to the 19th century, and has been out of action for more than 40 years but there are hopes that it can be brought back into use. Govan Drydock has said it wants to return the A listed dry dock to a fully operational ship repair and maintenance facility. The consortium headed by Mr Ballantyne said the plan will require a skilled workforce of around 1200 with hundreds more required in the supply chain. They say that the annual operating cost of catamarans is around half that of current CMAL monohull vessels. And they say that means that operating subsidies will be expected to be slashed as more catamarans begin to enter service. Mr Ballantyne, who over a decade ago received an honorary degree from Strathclyde University for services to the global maritime industry, says he believes that Scotland has the skills and infrastructure to establish a commercial shipyard which could be used to produce ferries not just for Scotland but for the export market. He said: "It is logical for a Scottish ferry company to logically support a Scottish shipbuilder for all the obvious reasons of local and national prosperity, skills training of youth, tackling youth crime and drug use. "I would suggest it is prudent to carry out a close investigation of CMAL decision makers... "The Scottish taxpayer is paying well above the odds over what can be produced locally." Four years ago the Scottish Government-owned owner of the ferry fleet demanded a foreign firm pay up to £100,000 to gain UK maritime approval before purchasing a ferry for just £9m - and the insistence led to the deal collapsing. That is £2m less than the current cost so far of repairs to 32-year-old MV Caledonian Isles which is out of action indefinitely after being sidelined for 17 months. Pentland Ferries' emergency ferry for CalMac MV Alfred has been a reliable feature on the Arran ferry run (Image: Newsquest) Discussions about acquiring the Indonesia-built vessel, which was proposed by the Mull and Iona Ferry Committee came before what was described at the time as a 'summer of chaos' across Scotland's ageing ferry network. It was claimed that CMAL made an "incredible" move to have the overseas owners fork out for the official approvals for any modifications to make it suitable for Scottish waters, which were estimated to have cost no more than £100,000. Committee chairman Joe Reade said: "I would agree that CMAL and CalMac are averse to anything novel. All their vessels - even the newest ones are in many respects just modern interpretations of a very old design type, with ancient operating practices embedded into them. So we don't have lock-on linkspans, as have been used elsewhere for generations (thus removing the need for rope-handling, and crew to do it). "It only adds to the cost of the ship, the size of the superstructure and the number of crew. "More efficient crewing is not just a feature of catamarans - it's a feature of any inshore ferry that has been designed to commercial incentives. Neither CalMac nor CMAL have any incentive to build or operate efficiently. It does not matter if they operate efficiently or productively, because whatever the cost, we the taxpayer pick it up. "The simple reason why Pentland Ferries chose a catamaran design was because as a commercial enterprise, they have to compete to survive. They are incentivised to make cost-effective buying and operating decisions. CalMac and CMAL have no such incentives, and so our hugely expensive, profligate and shamingly wasteful ferry system continues. "The more expensive ferries are to buy, and the more costly it is to operate, the more pressure there will be to increase fares, and the more difficult it will be to maintain or improve services. The ferry system is in danger of becoming unaffordable if costs continue to spiral. "This matters to us not just as taxpayers, but as islanders too." A spokesperson for CMAL said: "CMAL is not anti-catamaran; but what often goes unreported is that in geographies similar to Scotland, with comparable weather and sea conditions, medium speed (below 20 knots) catamarans are not a common choice for passenger / commercial ferry services. "An important factor in vessel choice is compatibility with specific routes, as well as flexibility to meet vessel redeployment needs across the network. We will only ever order the vessels best suited to the routes and communities they are intended to serve.' A Transport Scotland spokesperson said: "Assessment of new vessel options for routes across our networks is led by CMAL, Transport Scotland and the relevant operator. "As part of the design process CMAL appoint naval architects and technical consultants to consider and advise on vessel designs and route specific issues. Various hull forms (including catamaran designs), propulsion options, fuel types, and onboard arrangements are considered and assessed as part of the design process. Engagement with communities, businesses and representative groups is essential, and it is maintained throughout the process.'
Scotsman
an hour ago
- Scotsman
Acorn carbon capture: Crunch talks as Scotland wind farm chiefs poised to wrestle over seabed
Sign up to our Politics newsletter Sign up Thank you for signing up! Did you know with a Digital Subscription to The Scotsman, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... SNP ministers have been told to 'get a grip' of the energy transition after it emerged crunch talks are being held between wind farm bosses and those developing Scotland's Acorn carbon capture project because the two proposals want to use the same area of seabed. The Scotsman can reveal that bosses behind Scotland's proposed carbon capture project in St Fergus are holding discussions with wind farm chiefs as two key energy developments are poised to overlap in the North Sea. The area is located around 47 miles off the Aberdeenshire coast, with both projects having been granted permission to use the same strip of seabed. Advertisement Hide Ad Advertisement Hide Ad Shell and Scottish Power are brining forward the MarramWind proposals Concerns have been raised the proposed Acorn carbon capture and storage (CCS) project, which has been pushed forward after the UK government handed it £200 million of funding in Rachel Reeves's Spending Review earlier this month, will partially overlap in the North Sea with the MarramWind floating wind development. Two licences for same plot of the seabed Crown Estate Scotland issued licences to Pate Blue Dot for the Acorn storage site, as well to Shell and Scottish Power for the MarramWind project that will produce around 3GW of renewable energy. The Acorn storage site, called its 'foundation store', will make use of the seabed, where the harmful carbon will be injected deep into the rocks. The MarramWind project proposes up to 225 floating turbines that will also be moored to the seabed. Advertisement Hide Ad Advertisement Hide Ad But those behind the Acorn CCS project have insisted any overlap will not derail the long-delayed proposals that will be based onshore at the St Fergus gas terminal near Peterhead - despite a significant part of one of the project's two storage sites falling in the same plot of the seabed leased to the MarramWind project. The MarramWind proposals and the Acorn CCS storage site overlap on the seabed | Crown Estate Scotland The Acorn CCS project is expected to have capacity to store up to 10Mt of CO₂ per year. If all goes to plan, both the Acorn and the MarramWind projects are expected to be up and running in the early 2030s. SNP ministers under fire A scoping report produced as part of the MarramWind proposals, published in January 2023, highlighted 'seabed obstructions', including 'carbon capture storage projects'. Scottish Labour North East MSP Mercedes Villalba said: 'The lack of oversight from the Government here is staggering. Advertisement Hide Ad Advertisement Hide Ad Labour MSP Mercedes Villalba "It is frankly absurd that under the SNP's watch, two incompatible projects can be granted seabed rights on the very same plot. This is yet another case of the SNP selling off Scotland without a care for the consequences.' She added: "Our energy transition will continue to be disorderly, with workers paying the price, until the Government gets a grip on offshore development. READ MORE: Rosebank and other North Sea oil and gas fields could be given green light under new guidelines "That starts with technical due diligence of projects such as these and transparent accounting of what exactly public funding grants are being spent on." Advertisement Hide Ad Advertisement Hide Ad Scottish Conservative shadow energy secretary Douglas Lumsden said the revelation was 'just the latest example of SNP incompetence'. Conservative MSP Douglas Lumsden | supplied The North East MSP added: 'How they have managed to sell the same bit of seabed to two different parties is anyone's guess – but they need to resolve this mess fast, while also ensuring the taxpayers' best interests are served. Acorn deem overlap 'manageable' A spokesperson for the Acorn project said: 'We are aware of recent questions regarding a potential overlap between the Acorn CO₂ storage site and the proposed MarramWind offshore wind farm. 'This is a known and manageable spatial interaction. Any area of overlap is limited and does not affect Acorn's ability to develop, operate, or monitor the CO₂ store. Advertisement Hide Ad Advertisement Hide Ad The Acorn carbon capture project will be built next to the St Fergus gas terminal (Photo: Paul Campbell/PA Wire) | Paul Campbell/PA Wire 'Interactions of this kind are not uncommon, and the wind and carbon storage sectors are actively collaborating across the UK to manage them. The Crown Estate's co-locate forum is one example of how such overlaps are being addressed constructively. While this case is in Scottish waters, the same principles of early engagement and joint resolution apply. 'We are also working closely with Crown Estate Scotland, with whom we hold the necessary agreements, to ensure all required arrangements are in place to support Acorn's continued development. 'We remain fully committed to progressing Acorn at pace towards a final investment decision, working in partnership with the UK and Scottish governments and other key stakeholders. We are equally supportive of the successful delivery of all projects that contribute to Scotland's just transition and net zero ambitions.' Advertisement Hide Ad Advertisement Hide Ad Belfast-based Green energy supplier, North Channel Wind has announced a major milestone in Northern Ireland's quest for 100% clean energy, following the Department for the Economy's publication of the Offshore Renewable Energy Action Plan A spokesperson for MarramWind said: 'We are engaging directly with Acorn on relevant co-location considerations for a small part of the proposed MarramWind site.' A spokesperson for Crown Estate Scotland told The Scotsman it 'has a responsibility to consider the requirements of a range of sectors'. The spokesperson said: 'ScotWind option agreements were awarded in accordance with the spatial parameters provided by the Scottish Government's sectoral marine plan for offshore wind energy. Advertisement Hide Ad Advertisement Hide Ad 'We have worked closely with the Acorn project and relevant ScotWind projects to facilitate co-existence by including suitable provisions in the ScotWind agreements. These provisions relate not only to the area of seabed immediately related to the Acorn Project area, but also to the wider areas required to monitor operation of the planned Acorn Project storage areas.' Research into 'co-location' 'Crown Estate Scotland's determination to ensure co-location issues are resolved is reflected in our sponsorship of the offshore wind and carbon capture and storage (CCS) co-location forum. The forum's work includes research by scientists at the University of Aberdeen, who are investigating the best approach to testing and demonstrating the co-location of offshore wind and CCS activities in the future.' A Scottish Government spokesperson said: 'Crown Estate Scotland are working on the spatial planning of sites and it is the Scottish Government's understanding that any potential overlap of the Acorn carbon capture store and the Marram offshore wind development is limited and will not impact on Acorn's ability to develop, operate or monitor the CO₂ store. Advertisement Hide Ad Advertisement Hide Ad
The Herald Scotland
2 hours ago
- The Herald Scotland
Scotland's financial plan must show child poverty funding
The documents set out the Scottish Government's priorities for the next five years, and includes estimates for amounts of tax to be collected, and spending in areas like health, education and local government. Read more: Ahead of the Holyrood statement, Ms Robinson blamed the 'disappointing' outcome of the UK Government's recent Spending Review and Westminster's welfare reforms for worsening Scotland's financial outlook. She said the Scottish budget had been short-changed by £1.1 billion in day-to-day funding compared to UK departments. 'This government has delivered a balanced budget every year while taking steps to improve the overall sustainability of our finances. "This is despite a deeply challenging financial situation caused by rising global instability, persistent higher inflation and over a decade of UK austerity. 'Our disappointing settlement at the recent UK Spending Review has made the situation worse, short-changing the Scottish Government by £1.1bn in our day-to-day funding compared with UK Government departments. "This comes on top of reductions in our funding worth hundreds of millions of pounds as a result of the UK Government's proposed welfare reforms and failure to fully fund its employer National Insurance increase. 'In this context, it is important that we take action to maximise funding targeted at frontline services such as our NHS.' Shona Robison will deliver the MTFS on Wednesday (Image: Robert Perry) The MFTS is usually published each May, but this year's was delayed by four weeks due to the timing of the UK Government's multi-year Spending Review, published on June 11. As a result, MSPs will not be able to scrutinise the document until September, after the summer recess— much to the frustration of Holyrood's Finance and Public Administration Committee. According to the Scottish Fiscal Commission, the gap between what the Scottish Government spends and what it takes in is expected to grow from £1bn in 2024–25 to almost £2bn by 2027–28. The Fiscal Sustainability Delivery Plan, due to be published alongside the MTFS, is expected to set out how the government intends to close this gap—though details remain sparse. Stephen Boyd of the IPPR think tank told The Herald on Sunday that expectations were high for a more detailed and transparent strategy. 'At this stage, and given the month-long delay in publication, it is entirely reasonable to expect that long-standing criticisms will start to be addressed in this MTFS,' he said. "Information presented consistently on a year-to-year basis; more detailed information on spending priorities and future trends; more detailed information on risks and how these will be mitigated.' Mr Boyd said the strategy must outline how the Scottish Government plans to fund the First Minister's key priorities: tackling child poverty, growing the economy, addressing the climate crisis and improving public services. 'It is difficult to see how significant progress can be made on these priorities, especially the first, without spending more money,' he said. 'The MTFS should begin to set out a longer-term tax strategy, recognising that taxes will likely have to rise. 'The tax strategy published alongside this year's budget included a number of commitments for the remainder of this parliament—for example, that over half of Scottish taxpayers will pay less Income Tax than they do in the rest of the UK. 'The MTFS should begin to set out a longer-term strategy recognising that taxes will likely have to rise to respond to the demands of an ageing society and the climate crisis.' Read more: Mr Boyd said that despite increases in the block grant announced in the UK autumn budget and the Spending Review, Scotland's public finances 'remain tight'. 'Unless the Cabinet Secretary is prepared to raise taxes, portfolio funding settlements are likely to be tight, especially if—as it's reasonable to expect—health is protected. 'It is reasonable to expect that parts of the public sector—and their workforces—will be disappointed by the MTFS. 'It is entirely possible that a revised approach to pay and workforce will be signalled in the MTFS. Pay settlements have been relatively generous in the devolved public sector over recent years. 'It will be interesting to see how the Cabinet Secretary navigates this politically fraught terrain. 'As the modelling produced by IPPR Scotland and others shows, it is clear that more generous welfare payments are required to make significant progress on the First Minister's main priority of eradicating child poverty. "Yet, the First Minister recently suggested there will be no further increases in the Scottish child payment. 'The MTFS will provide a clear signal on just how serious the Scottish Government is about meeting this priority.'
