Iraq contract boost for Wood as bidder considers options
The wins come as the jobs of thousands of Wood staff working in Aberdeen and offshore in the North Sea may be at risk.
Wood employs 4,500 people in Aberdeen and the North Sea operations it runs mainly from the city.
The group is in talks about a potential takeover by a bidder based in the United Arab Emirates.
The Scottish firm's bargaining power appears to have been reduced following a series of dramatic developments in recent weeks.
READ MORE: SNP Government 'laser-focused on delivery' claim rings hollow
Wood announced plans for hefty cost cuts in February, which were expected to result in job losses, as directors prepared to slash the valuation of its assets.
The company made the move as it waited for the results of an independent review into contracts at its troubled projects division, which helps oil and gas firms develop new fields around the world.
Chief executive Ken Gilmartin insisted at the time that moves to 'right size' the group would leave Wood well placed for growth in attractive markets.
Days later the company faced embarrassment after it told investors that chief financial officer Arvind Balan had stood down following the 'incorrect description of his professional qualifications in various statements in the public domain'.
In late March the group published the results of the review of the projects division, which highlighted a range of failings. Wood noted 'inappropriate management pressure and override to maintain previously reported positions' and instances of unreliable information being provided to the group's auditors.
Publication of Wood's annual results for 2024 has been delayed, from April 30.
READ MORE: North Sea giant plans $500m investor payouts amid slump fears
However, last week Dubai-based Sidara tabled a non-binding takeover proposal at 35p per share which valued Wood at around £240 million.
Wood directors said that after considering alternatives they would be minded to recommend a formal offer from Sidara on those terms citing the interests of shareholders, creditors and other stakeholders.
Coming months after Sidara decided to walk away from a £1.5bn bid to buy Wood, the latest approach may look opportunistic.
However, with Sidara also proposing to inject $450m (£335m) into the Wood business, the company appears to see significant potential in its target's operations. After focusing on supporting oil and gas for decades, Wood has expanded into a range of low carbon energy markets in recent years.
It remains unclear if Sidara will proceed on the terms outlined.
On April 17 Wood announced that the deadline for Sidara to confirm it planned to make a firm offer for the group or walk away had been extended to May 15.
READ MORE: North Sea jobs cull looms after blockbuster oil and gas deals
Employees may be anxious about the prospect of Sidara acquiring the group. Sidara may look to combine Wood with its other engineering operations or find other ways to squeeze costs out of the business.
The loss of another stock-market listed firm would be a blow for Scotland's corporate sector. A series of Scottish engineering firms have been acquired by bidders based outside the country in recent years. Glasgow-based power specialist Aggreko was bought by private equity investors in 2021, for £2.1bn.
Some Wood shareholders may see the proposed deal as the best way of securing value for their holdings. Shares in Wood have plunged from 211.4p in August last year to around 20p.
The company faced pressure from dissident investors who were unhappy about its share price performance before the recent decline.
If Sidara does not proceed another bidder may decide to step in.
However, Wood has effectively been in play for months. US investment giant Apollo made repeated takeover approaches in 2023 culminating in one that valued Wood at £1.7bn. It decided to walk away in May that year.
Wood chief executive Ken Gilmartin (Image: Wood)
Mr Gilmartin's confidence in Wood's operations will be put to the test if the group is left to soldier on as an independent.
Wood has won two contracts with TotalEnergies worth $11m in total to help debottleneck and upgrade existing facilities on the Ratawi gas field.
The group has hired 70 Iraqis to work at its Ratawi operations hub to support work on the contracts. Wood has been working on Ratawi since 2023.
It said it currently employs over 4,000 people across the Middle East, having increased headcount in the region by 500 in 2024.
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