Wood Group making further savings

Oil services firm Wood Group PSN has said it is delivering savings "significantly in excess" of original cost reduction targets.

It said this was due to challenging conditions in the oil and gas industry.

In a trading update to the Stock Market, the Aberdeen-based company said it expected its financial performance to be down on last year, reflecting lower activity and pricing pressure.

In April, it announced it was shedding up to 80 jobs.

Wood Group said in a statement: "We constantly respond to market challenges and have reduced contractor rates, frozen UK onshore staff salaries and are moving to shared services to improve efficiencies while also improving quality of service.

"We are continuing to take a number of steps to help customers increase operating efficiency, safely improve performance from oil and gas assets and reduce their costs.

"All changes made and proposed are done so in consultation with employees and their health and welfare is our top priority.

"We continue to review our resource requirements to meet our customer needs and service provision to ensure that we are focused on sustaining the business for the long-term."

Meanwhile, the firm has signed a $250m (£159m), 10-year deal, giving it responsibility for the operation of the North Sea "Cats" pipeline system, which transports gas to Teeside.

The company has cut contractor rates by 20% in the last year, and also announced a pay freeze last December.

Wood Group employs about 12,000 people onshore and offshore in the UK.