Wood Group has agreed to pay $115million, or around £98million, to US oil and gas pipeline company Enterprise to settle a long-standing litigation case.
The FTSE 250 energy services giant, whose customers include BP and Shell, said it will pay the sum within the next week in one instalment.
The settlement puts an end to a case that started in 2016, when Enterprise filed a lawsuit against Amec Foster Wheeler, a company Wood acquired in 2017.
Settlement: Wood Group will pay $115m to Enterprise in the next week
The case centred around alleged cost increases and delays on a project secured by Wood Group in 2013 to engineer and build a propane dehydrogenation plant in Mont Belvieu, Texas.
Wood inherited the litigation when it bought Amec Foster Wheeler for £2.2billion in October 2017.
Just last year, Amec Foster Wheeler was ordered by the UK’s Serious Fraud Office to pay £103million over its use of corrupt agents in the oil and gas sector ‘to cut corners and secure contracts’.
The offences spanned from 1996 to 2014 – before Wood acquired the company – and took place across the world, in Nigeria, Saudi Arabia, Malaysia, India and Brazil.
Today, Wood said it will hold a Capital Markets Day on 29 November to outline its updated strategy following the completion of the $1.9billion sale of its built environment consulting business in September.
Wood Group shares fell 2.9 per cent to 154.35p in morning trading on Monday.
They have lost around 23 per cent of their value over the past year.
The company swung back to profit in the first half thanks to strong demand for its services and the disposal of its built environment division.
Its business model has traditionally relied on high oil prices as demand for its services tends to expand when the oil and gas industry has significant cash to spend on projects.
In recent years, it has diversified its exposure away from the petroleum sector to a greater focus on renewable energy, with wind and solar power playing an increasingly prominent role.
