PRESS RELEASE 24 January 2014

 

Weir announces US$98m (£59m) contract for provision of maintenance services in Iraq

The Weir Group PLC (“Weir”) announces it has signed a contract with LUKOIL Oil Company (LUKOIL) to provide general maintenance services for the West Qurna-2 oilfield in Southern Iraq. The agreement, which is for two years and is estimated to be worth a total of US$98m (£59m – 23 January 2014 Exchange rate £1=$1.661), will see Weir engineers deliver mechanical, electrical, maintenance and pipeline services for the related production facilities, including the Mishrif Central Processing Plant.

Weir has invested over US$8m in establishing its service centre in Basra, Iraq and it is the first in-country location to offer fully comprehensive maintenance services for all kinds of rotating equipment, valves and wellheads. The facility is also the first in Iraq to obtain API and ISO licences.

West Qurna-2 is one of the largest undeveloped oilfields in the world. Mishrif will initially produce 150,000 barrels of oil per day (bod), increasing to 400,000 bod by the end of 2014. The processing facility is expected to be operational in the first half of 2014, at which time Weir will commence work under the terms of the contract. Weir will recognise input on a monthly basis over the course of the contract in accordance with the agreed work plan.

Weir Chief Executive, Keith Cochrane said: “This substantial contract demonstrates the importance of Weir’s long experience of working in Iraq and our reputation for delivering high quality engineering services in support of the country’s developing oilfield infrastructure. It also reflects our global capability, a key strength of our Group which allows us to capture opportunities in high growth markets and be a partner of choice to our worldwide customers.”

 

About West Qurna-2

West Qurna-2 is a field located in southern Iraq, 65 km northwest of the large seaport of Basra. The field was discovered in 1973 and explored (2D seismic and exploratory drilling) in the 1970-80s by Soviet exploration and service companies. The West Qurna-2 area is about 300 square kilometres. Production is in its initial stages and therefore it is one of the largest undeveloped fields in the world. West Qurna-2 is being operated by a consortium which is made up of LUKOIL (75%) and the Iraqi state South Oil Company (25%). LUKOIL is a major oil and gas company based in Moscow, Russia. The general maintenance contract is between Weir Solutions FZE, a part of The Weir Group PLC and LUKOIL Mid-East, a part of LUKOIL Oil Company.

 

About The Weir Group PLC

Weir, a FTSE 100 company founded in 1871 and headquartered in Glasgow, Scotland, is a global provider of engineering solutions to the minerals, oil and gas and power sectors. Our commitment to engineering excellence, research and customer focus extends equipment wear life and operational capability in some of the world’s most challenging environments.

Weir is committed to going where our customers go, with a worldwide network of around 200 manufacturing facilities and service centres. The business has a presence in more than 70 countries, with over 15,000 people around the world working in three divisions; Minerals, Oil & Gas and Power & Industrial. Weir’s customer base includes the world’s largest mining houses, major oil services businesses and nuclear and conventional power generation companies.

Annual revenues were more than £2.5 billion in 2012, of which more than half came from the provision of services and aftermarket support. Emerging markets contributed over 40% of overall Group orders in 2012.

 

About Weir Oil & Gas

Weir Oil & Gas Division provides superior products and service solutions to Oil & Gas customers in upstream, production, transportation, refining and related industries. With over 3,000 employees and revenues of over £800m in 2012, the division serves four main markets. Upstream products include pressure pumping equipment and services from SPM, Mesa and Novatech. Seaboard and Mathena provide pressure control products & rental services. Downstream products from Gabbioneta include API 610 pumps & spare parts for refining and petrochemical industries.

Weir Oil & Gas Services has been providing equipment and services to the Middle East since the early 1900s. From its base in Dubai, the group employs over 1,000 people serving customers in six countries through the most extensive service network in the region. The businesses provide maintenance and engineering workshop services to primarily upstream Oil & Gas customers. The business also manufactures and repairs API pressure control equipment and OCTG accessories in all its locations in the Middle East and has various premium threading licenses across the region.

 

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