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BP signs up three long-term partners

 

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BP signs up three long-term partners

By Ed Crooks in London

Published: June 4 2008 03:00 | Last updated: June 4 2008 03:00

BP has signed three companies, including Amec, the FTSE-100 listed oil services and engineering group, to be its long-term partners for developing offshore oil and gas projects around the world.

The move is part of a drive by Tony Hayward, BP’s chief executive, to simplify the company’s structure and standardise its operations in an effort to improve efficiency and cut costs.

The group has chosen just three groups to provide its offshore engineering and project management services: Amec, KBR of the US and Worley Parsons of Australia.

Neil Bruce, chief operating officer of Amec’s natural resources division, said: “If you are switching contractors all the time, you don’t learn from one development to the next, and even if you don’t mean to, you can repeat the same mistakes that other people have made.”

The deal is a significant success for Amec, which has been restructuring to focus on the fast-growing energy industry. The news sent Amec’s shares up more than 4 per cent to 884p.

Amec has been working for other big international oil companies including ExxonMobil and Royal Dutch Shell, but is now working with BP on just one development, in Azerbaijan. The deal puts it in a prime position to work with BP anywhere in the world, focused on the company’s seven main growth areas: Angola, Asia-Pacific, Azerbaijan, Egypt, Gulf of Mexico, the North Sea and Trinidad.

Neither BP nor Amec would give details of the value of the agreement, which will depend on how many projects Amec is selected for, but it is likely to run into hundreds of millions of dollars.

BP plans to invest about $22bn this year, most of it in its upstream business, and most of that will be offshore. The front-end engineering and project management components of a project typically comprise about 20 per cent of its cost, so Amec will be aiming for a share of a total spend worth billions of dollars. * TNK-BP, the Russian joint venture 50 per cent owned by BP, has issued a statement saying its operations and development plans have not been affected by the increasingly acrimonious battle for control of the company.

It said: “TNK-BP considers it necessary to state that discussions between the shareholders with regard to the strategy and tactics of the company’s development do not impact its current operations which remain stable and aligned with our annual forecast.”

 

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