Wood Group's history is quite short -
less than 30 years, but meteoric!
I have attached a brief history
but essentially Wood Group evolved from a family fishing business in
Aberdeen. Wood Group's founder, Sir Ian Wood, had a vision of how Aberdeen
in the 70s could learn from Houston and become a major service centre for
the newly discovered oil & gas in the North Sea. Wood Group broke away
from the family fishing business in the early 80s and became a service
company to the oil & gas and power industries, and is today an
international energy services company employing 16,000 people in 40
countries and a turnover of US$2.8bn.
As you know Scotland's engineers are
world-renowned and many generations of Scottish engineers have changed the
face of our modern world. Wood Group is helping to take Scottish expertise
global and bring international expertise back to the UK.
Wood Group is a people-business built on
old fashioned values of good service, hard work and robust business ethics
but it's also dynamic and an exciting place to work.
History of Wood Group
19th century roots in the Scottish fishing industry, the Wood familys
business has developed into a global energy services company employing
14,000 people in 36 countries, with sales of $2.2billion.
familys fishing business began in the 1890s when the family owned a
number of fishing boats operating out of the port of Aberdeen in North
East Scotland. In 1912 William Wood (grandfather of Sir Ian Wood,
chairman and CEO of Wood Group) founded Wood & Davidson, a ship repairing
and marine engineering firm to service the fishing fleet.
seven sons and the youngest, John Wood (Sir Ian Woods father), took over
the familys share in the early 1950s. In 1964 John Wood bought out the
other shareholders and became chairman the company had 50 employees and
a turnover of £50,000. In 1964 Ian Wood joined the business, now named
John Wood & Son, and the marine base was expanded into fishing, fish
processing and general marine engineering. At that time Aberdeen was a
major deep-sea trawler port and their 23-strong fleet was playing an
important role. Ian Wood became managing director in 1967 and under his
leadership the company switched from the bigger trawlers to more
profitable inshore boats and was the largest independent Trawler Owners in
The John Wood Group
the 1970s Scotlands new industry, North Sea oil presented an ideal
opportunity to translate marine engineering experience into engineering
and support services and by the end of the 1970s The John Wood Group
(Aberdeen) had become one of the largest private industrial companies in
Scotland, employing 1750 and with a turnover of £18 million.
evolution began back in 1970 when the Group really began to appreciate the
huge potential of the recently discovered North Sea oil and took advantage
of the new-found opportunities. Ian Wood visited Houston in 1972 and
realised the potential for Aberdeen to become a mini-Houston, a centre for
oil technology. The development into North Sea oil engineering work was a
major challenge for the Group and required considerable capital
expenditure for the modification of premises, the re-training of skills
and recruitment of new staff. The company gradually extended its ship
repairing activities beginning with the acquisition of John Lewis & Sons
Ltd in 1972 for £1 million, another of Aberdeens largest industrial
complexes, and the seeds of its engineering business were sown. Early in
1973 an alliance was formed with the Glasgow-based Weir Group of companies
and Wood-Weir Engineering Services Ltd was established. Operating in
Aberdeen, in one of the best-equipped and most versatile oil engineering
workshops in the North of Scotland, engineering staff were recruited and
trained in specialist oil field servicing techniques. Further engineering
developments included the formation of Offshore Platforms Maintenance
(Scotland) Ltd specialising in the maintenance requirements of offshore
platforms and the formation of John Wood Group Electrical Engineering Ltd
specialising in electrical servicing and communications.
1975 the first UK offshore oil was produced from the Argyll field and the
first oil from the Brent field followed on the 11th November 1976 - one of
the keys to unlocking the North Seas riches to the great benefit of the
UK economy. The Brent field gave Wood Group its first major offshore
January 1982 John Wood
decided in 1981 to split the oil service business away from the familys
fishing business and on January 4th 1982 two independent businesses were
set up John Wood Group, focusing on engineering, oilfield logistics &
supplies and drilling services, and J W Holdings, the largest fishing
company in Scotland. In 1982 John Wood Group announced a turnover of £59
Throughout the 1980s there was steady development of Wood Groups North
Sea business, both onshore and offshore. In 1986 it formed a joint
venture with Ferranti Offshore Systems to acquire a 51% shareholding in
Foster Wheeler Petroleum Development and Associates Ltd. In 1987 Foster
Wheeler Wood Group Engineering (60% owned) carried out the West Sole
Modifications Project for BP, one of the largest projects of its time. By
1989 it was the UKs largest indigenous oil service company and a world
leader in the overhaul and repair of industrial gas turbines, employing
2,000 people. Profits had trebled over the previous three years and the
Group began to grow organicially and with
the 1990s the Group expanded its international oil & gas activities and
extended internationally with many strategic acquisitions. In 1991 the
Group was employing 2,500 and operating in the North Sea, Europe, North
America and the Middle East and declared profits of £16.9million and by
1999 more than 5,500 people were employed in 25 countries and profits were
up to £33.6million.
the Group formed a joint venture company with Rolls-Royce plc extending
overhaul and repair capability to include the RB211 and Olympus engines.
Then in 1993 J P Kenny was acquired, with its world-renowned pipeline and subsea capability, and enhanced the Groups life-of-field capability and
positioned us for forthcoming marginal field developments. Wood-Ways pump
and overhaul and maintenance activities were merged with Sulzers pumpcare
to create a new company, Sulzer Wood. In 1994 the acquisition of GTC Gas
Turbine in Dundee gave the Group a capability in heavy industrial gas
turbine component repair and then in 1997 the Group formed a 50/50 joint
venture with TransCanada PipeLines Ltd, the largest pipeline company in
the world outside Russia, called TransCanada Turbines Ltd. Such partners
are a testament to the Groups determination to achieve the highest
standards of quality and customer dedication.
market leader in the North Sea - Early in the 1990s long-term
partnering arrangements were developed with a number of major clients
including the MMSC for Shell UK and full responsibility for the
maintenance and modifications on the Brent Charlie and Brent Delta
platforms. During the late 1990s Wood Group Engineering (North Sea) became
a market leader in the North Sea providing integrated engineering,
operations and maintenance services to BP, Shell, Talisman, Amerada Hess,
BG, Enterprise Oil and ChevronTexaco.
January 1997 an opportunity was identified to apply North Sea managed
operations and maintenance skills in Colombia when BP awarded a five-year
contract to Equipo, a joint venture created in 1996 and managed by Wood
Group. This contract was recently extended and the scope significantly
expanded. In 2004, Colombser S.A., Petrosercol S.A. and Soluciones,
Equipos y Proyectos SEP Ltda, merged into one new company called Wood
Group Colombia S.A. The company, part of our Engineering and
Production Facilities division, is owned 100% by Wood Group, has
approximately 400 employees and consolidates the Groups presence in
Colombia and supports the development of new businesses in other Latin
American countries such as Ecuador and Brazil, whilst supporting more than
50% of Colombian oil production
1998 another Wood Group managed joint venture, SIMCO, started operations
on a 16-year contract for PDVSA in Venezuela. This innovative contract
was an opportunity for Wood Group to combine its engineering and
production facilities and gas turbines services expertise in one contract.
late 1990s Houston, Texas was identified as a particularly important
market for Wood Groups engineering business, as a significant proportion
of worldwide deepwater engineering contracts were anticipated to be
awarded from there. The Group acquired Mustang Engineering, a market
leader in the provision of deepwater process facility engineering
services, and Alliance Engineering, specialising in lightweight topsides
the Group declared revenues had exceeded $1billion for the first time and
in 2002 the Group carried out a successful IPO on the London Stock
Wood Group is an international energy services company with more than $2.2
billion sales, employing more than 14,000 people worldwide and operating
in 36 countries. The Groups three complementary businesses -
Engineering & Production Facilities, Well Support, and Gas Turbine
Services - provide a range of engineering, production support, maintenance
management and industrial gas turbine overhaul and repair services to the
oil & gas, and power generation industries worldwide.
We are able to combine our worldwide experience and
knowledge of oil & gas industry best practice to provide the most
appropriate solution to customers worldwide.
SIR IAN WOOD, CBE, BSc.,
LL.D, DBA, DTech, CBIM, Fscotvec, FCIB
Born and educated in
Aberdeen, Sir Ian Wood attended Robert Gordon's
College before graduating from Aberdeen University in 1964 with a
first-class honours degree in psychology. He then joined the family
business, John Wood & Son, and became managing director in 1967. As well as his commitment to the Group, Sir Ian holds many appointments
within the UK including joint Chairman of the Oil and Gas Industry
Leadership Team and member of PILOT (joint Government/ Oil & Gas Industry
initiative). In December 2000 he retired as Chairman of Scottish
Enterprise and as Chairman of the British Trade International Oil and Gas
Export Board (previously OSO).
He received the award for
Young Scottish Businessman of the Year in 1979, was awarded the CBE
(Commander of the Order of the British Empire) in 1982 in the New Year's
Honours List, awarded an Honorary Degree of LL.D from Aberdeen University
in 1984 and was awarded a Knighthood in the 1994 New Year's Honours
List. In 1998 he was awarded an Honorary Degree of DBA from Robert
Gordon University in Aberdeen.
He was a joint winner of
Scottish Business Achievement Award Trust in 1992; winner of the Service
category award in the 1992 Corporate Elite Leadership Awards; received a
Scotvec Fellowship Award in 1994 and Scottish Qualifications Authority
Fellowship in 1997, and was awarded The Alick Buchanan-Smith Memorial
Award for Personal Achievement in 1995. Sir Ian also received the
Corporate Elite "World Player" Award from the Business Insider in 1996.
In 1998 he was made a
Fellow of the Chartered Institute of Bankers; in March 2000 he was elected
a fellow of the Royal Society of Edinburgh and, in the year 2001, he
received the Business Ambassador for Scotland Award from the Scottish
Business Insider. In 2002 he was awarded the degree of Doctor of
Technology from Glasgow Caledonian University.
I hope that helps introduce us!
Carolyn Smith Corporate Communications Manager Wood Group John Wood House Greenwell Road Aberdeen AB12 3AX
Wood is walking tall after last years profits stumble
Sir Ian Wood admits that his company got its feet wet last
year but, finds Valerie Darroch, he remains upbeat.
IN a nation where world-class business heroes are in
short supply, the rangy figure of energy services entrepreneur
Sir Ian Wood stands tall.
Creating a global operation with revenues of more than $2
billion (£1.07bn) from a modest Scottish family fishing
business with half a dozen ships is no mean feat.
After decades of growth at the Wood Group whose 14,000
employees now span 36 countries, it is tempting to believe
that success has become easy and that the man at the helm can
walk on water.
But Sir Ian, a down-to-earth Aberdonian, who recently
presided over the companys second fall in profits since
flotation in 2002, is probably the least likely Scottish
business leader to succumb to notions of invincibility.
Reflecting on the last years trading at Wood Group, Sir
Ian says: We got our feet wet last year but well try to
avoid doing that again I hope weve reacted fast enough and
made changes quick enough.
Taking a company from private ownership to the full glare
of public scrutiny on the stock market is a tough task for any
founding chief executive, especially one whose vision,
intellect and energy has played such a huge part in charting
For Sir Ian, the initial transition was a smooth one the
IPO in 2002 was seven times oversubscribed and Woods
enviable growth record looked unshakeable.
But 2004 brought a rude awakening, as earnings (before
interest tax and amortisation) tumbled 15% to $117 million
(£63m), largely due to difficulties in its gas turbines
division and lower volumes in the deepwater engineering
Wood still managed to notch up a 15% increase in revenues
to $2.28bn (£1.22bn) but Sir Ian admits: We did the IPO in
the belief that we could continue with our super record of
growth and last year we stumbled badly In terms of being a
[relatively] new IPO, it was a great disappointment.
Wood says his senior management team has worked hard to
tackle problem areas, notably gas turbines (now under the
leadership of deputy chief executive Allister Langlands) and
he is confident of a return to acceptable growth in 2005.
Sir Ian says Langlands has taken a number of steps to cut
costs, increase efficiency, focus on high-tech component
repair contracts and extend long-term maintenance agreements.
We moved into that market when the Enron issue changed its
status overnight from believing there was an under-supply to
an over-supply. I believe last year is the bottom [for gas
turbines], he says.
Sir Ian adds that staff morale remains high, despite the
dip in profits last year.
No-one, frankly, within Wood felt as depressed as the
public markets coverage might have implied My colleagues
look back at last year and see revenues went up, we continued
our international development and we made a big development
Wood, which has developed a global reputation for creating
innovative technical and engineering solutions, made an
investment and capital spend of $131m (£70.2m) in 2004, up
from $99.6m (£53.4m) in 2003, as part of its efforts to
enhance products and services.
Wood Group had a range of private equity backers, including
prominent Scottish institutional investors, long before its
IPO and Sir Ian says this paved the way for the transition to
public company status.
Weve had institutional shareholders since 1981, so
[flotation] wasnt as traumatic a change as it might have been
if we had just been a purely private company, he says.
Some of Wood Groups long- standing backers, which included
Aberdeen Asset Management, made as much as 25 times their
original stake when the company floated on the London stock
market in June 2002.
Growth rocketed in the decade running up to the IPO, with
revenue doubling from just under $400m in 1993, to $800m by
1997, shooting through the $1bn in 2001 and passing $2bn in
Although the North Sea remains a key market for Wood, in
the past few years there has been a gradual reduction in the
proportion of revenue derived from that area, which now stands
at less than 25% of total sales, reflecting growth in earnings
from other oil provinces.
As joint chairman of the UKs oil industry leadership team,
Sir Ian is a passionate advocate of the need to prolong the
productive life of the UK continental shelf (UKCS).
He is adamant that, with the right kind of incentive and
risk-sharing agreements in place, significant new finds can be
made, particularly in new areas such as west of Shetland.
He recently gave a presentation to the trade and energy
ministers entitled A tale of two futures, one being rapid
decline of the UKCS with 40% of the infrastructure
decommissioned by 2020 and game over effectively by 2030.
The upbeat alternative is an extended life scenario where
production continues to 2050 or beyond and at least another 28
billion barrels of oil are produced.
For this to happen, Sir Ian says operators must invest in
exploration and production; contractors must improve
efficiency to contain unit costs; there must be more
outsourcing; more adoption of new technology; skilled staff
must be retained and recruited; and government must minimise
regulation and maintain fiscal stability.
He argues that the prize for maximising recovery is
The difference between the high 28 billion [barrels of oil
equivalent per day] and low 14 million at $40 a barrel
represents $560bn of economic value to the UK, Sir Ian says.
An outspoken character, he got angry back in the 1970s when
local people in Aberdeen were fearful of what US oil companies
might do to them instead of figuring out how they could get a
slice of the action for themselves.
Back in 1979, Sir Ian shocked his father by spending the
equivalent of the cost of one and a half fishing vessels to
mount a lavish stand at an oil exhibition. It was a typically
prescient action, demonstrating his ability to anticipate
change and plan accordingly.
He inspires a strong loyalty among his workforce and is as
comfortable chatting to staff in Aberdeen in his old cardigan
as he is addressing workers in his shirt-sleeves in Caracas or
With a first-class degree in psychology, he is adept at
reading people and warns of the insidious effect on
recruitment of continually referring to the North Sea as a
sunset industry, which he warns is damaging and potentially
He believes the industry has to do more to attract new
recruits and says in future they may come from other nations
as the global competition for human capital hots up,
particularly China which turns out two million engineering
graduates every year.
You can see that as a threat or an opportunity; we see it
as an opportunity, he says.
There is a significant resource shortage right now. Some
companies are not bidding for contracts right now on the basis
they have not got the people, warns Sir Ian.
In an industry where the average age of workers is roughly
50, grooming the next generation of leaders is important. Sir
Ian says that at Wood Group, succession plans are in place.
This summer marks Sir Ians 63rd birthday, and he remains
committed to steering the group until he is 65. I wont
become a 70-year-old Scottish chairman, he promises.
But the former chairman of Scottish Enterprise is not
planning to retire to the golf course. I enjoy being
constructive and I will certainly carry on doing things.
For now, his vision remains global and his appetite to grow
the business he created, undiminished.
CONGRATULATES SIR IAN WOOD ON CONTRIBUTION TO OIL
AND GAS INDUSTRY
23 Feb 2006
Energy Minister, Malcolm Wicks
MP, and key oil and gas industry leaders
joined together at a dinner at Lancaster House
in London to recognise and thank Sir Ian Wood,
chairman and managing director of Wood Group,
for his contribution to industry on the
occasion of Sir Ian stepping down from his
role on the PILOT forum.
Mr Wicks hosted the dinner in his role as the
current chairman of PILOT. Industry was
represented by its current members of PILOT
and some distinguished past members including
Francis Gugen, ex managing director of Amerada
Hess and now chairman of CH4 Energy, Syd
Fudge, former chief executive of Kvaerner Oil
and Gas and Malcolm Brinded, executive
director of exploration and production and Tom
Botts, executive vice president - Europe, for
Shell International Exploration and
Production, as well as Alan Jones, formerly
head of BP operations in the UK.
Mr Wicks said: 'This evening is dedicated to
the celebration of Sir Ian's contribution.
Over the past 30 years he has built the Wood
Group into a major global company operating in
more than 40 countries worldwide from its
headquarters in Aberdeen. He has applied the
same level of passion and effort to the
benefit of the whole industry through his
contribution to PILOT. He has been a constant
driving force and I know that the industry
will continue to benefit from his efforts for
his own company and his generous counsel to
PILOT is chaired by the energy minister and
brings the government and industry together to
help strengthen the North Sea's position as a
key centre for exploration, development and
production, against fierce competition from
other oil and gas provinces around the world.
The forum is unique, both in UK industry and
the global oil and gas business, and Sir Ian
played a key role in establishing its
predecessor in 1998 the Oil and Gas Industry
Task Force (OGITF), which set a number of
tough goals that PILOT is aiming to achieve by
· Sustaining investment at £3billion per annum
from North Sea activity
· Maintaining production at 3 million barrels
of oil equivalent per day
· Prolonged self-sufficiency in oil and gas
· A 50% increase in exports in oil and gas
· £1 billion additional value from new
· Supporting 100,000 jobs more than there
otherwise would have been
· The UK to be the safest place to work in the
oil and gas industry world wide.
Sir Ian has co-chaired the ILT (Industry
Leadership Team) since it was created six
years ago. ILT is the industry side of PILOT
and includes high-level representatives from
operators, contractors, SMEs and the trade
Tom Smith, managing director of the
telecommunications specialist company Nessco
Ltd will now take the role as co-chair of ILT
along with Dave Blackwood, director of BP's
North Sea business.
On behalf of ILT Tom Smith says: 'Sir Ian
brought an unrivalled wealth of experience to
the industry at a particularly challenging
time, when the OGITF was established. Since
then Sir Ian has helped us to understand how
best to work alongside government and we've
all benefited and will continue to benefit
from his contribution. He is a hard act to
follow and I look forward to taking the goals
of PILOT forward with the dedication and
enthusiasm that Sir Ian has.'
ILT Communications Executive
c/o UKOOA, 3rd Floor, The Exchange 2, 62
Market Street, Aberdeen AB11 5PJ
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