Energy services giant Wood pulls out of UK nuclear

Image source, Getty Images

Image caption, Wood's nuclear business is focused on decommissioning work at Sellafield in Cumbria
  • Author, Andrew Black
  • Role, Business presenter, ΒιΆΉΤΌΕΔ Good Morning Scotland

Scottish energy services giant Wood has announced it is pulling out of the UK nuclear power industry.

The Aberdeen-based firm has sold its nuclear business to US engineering firm Jacobs for Β£250m.

Its nuclear business is focused on decommissioning work at the Sellafield site in Cumbria.

Wood chief executive Robin Watson said the company was focussing more on areas like the move to renewables and the energy industry's drive to cut carbon.

The move comes amid debate about the cost of operating UK nuclear power, and dealing with the radioactive waste it produces.

Wood - which does a large amount of business in the US - has announced revenue of $4.8bn in revenue for the first half of the year.

'Ahead of the curve'

The sale of the nuclear business includes an agreement that Jacobs will pay Wood Β£7.5m if the UK's competition watchdog does not clear it.

Mr Watson told ΒιΆΉΤΌΕΔ Radio's Good Morning Scotland programme there was "an element of the UK market" behind the deal.

But he added: "The nuclear business is one that we don't see the same opportunities with as we do with other parts of our portfolio.

"Jacobs have got a global nuclear business of some scale that we've never had, so I think it's just more strategically important to others than it is for us in terms of where it fits in our portfolio."

Meanwhile, Mr Watson said Wood was staying "fairly ahead of the curve" on the energy industry's move away from traditional fossil fuels.

'Complex transition'

The company's involvement in finding and producing oil and gas - known as upstream - has gone from being 85% of its business three-and-a-half years ago to 25% now.

"We see opportunities right across energy transition and sustainable infrastructure - that's really been the Wood story over the last three years," said Mr Watson.

"Oil and gas will remain a significant market for the next generation and a half.

"Also layered in there with climate issues are security of energy supply, demand levels, having efficient grid systems - so it's quite a complex transition that we're in the midst of."

The sale of Wood's nuclear business will also allow the company to further reduce its net debt, which is up 14% to $1.7bn compared to the first half of 2018.

That came after it bought engineering firm Amec Foster Wheeler for Β£2.2bn in 2017.

Wood also said it expected to see the benefits of a five-year contract with Saudi state-run oil giant Aramco drive its business in the second half of the year.

For the latest business news as it happens, follow ΒιΆΉΤΌΕΔ presenter Andrew Black's updates each weekday morning on ΒιΆΉΤΌΕΔ Radio Scotland's Good Morning Scotland programme between 0600 and 0900.