AMEC Expands Caspian Contract

AMEC has again expanded its provision of engineering services for the oil and gas sector with new contracts to help develop a massive oil field in the Caspian Sea and deliver a major portion of the strategic Georgian pipeline that will deliver Caspian crude oil to world markets.

Further reinforcing its position in the energy rich Caspian region, AMEC has won an initial US $17 million contract to analyze and evaluate plans for a part of the vast Azeri, Chirag and Gunashli oil and gas field development with potential for significant additional work subject to project approvals. On a further phase, an AMEC consortium has been awarded a US $200 million contract (AMEC share US $50 million) for the project management of a 14,500 ton topside facility. The contracts were awarded by the Azerbaijan International Operating Company (AIOC), a consortium of BP, ExxonMobil and other leading oil and gas producers. In related work in the Caspian region, AMEC's associate company SPIE (46% owned by AMEC) has been awarded a US $320 million joint venture contract (SPIE share $160 million) for the Baku-Tbilisi-Ceyhan Pipeline Company, led by BP Exploration (Caspian Sea) Ltd. The contract covers the engineering and delivery of 248 kilometers of oil pipeline through Georgia in addition to three associated pumping stations (two in Georgia and one in Azerbaijan) and is due for completion in mid-2005. (SPIE in 50:50 joint venture with Petrofac UK). The contract also includes an option, for an additional US $130 million, to deliver a gas pipeline with associated compressor stations along the same route.

AMEC Chief Executive Sir Peter Mason said: ''These announcements underline the significant growth opportunities we continue to see through our long-term relationships within the international oil and gas sector. Together with our associated company SPIE we are providing our clients with the highest quality services and project solutions wherever they are working.''

These announcements have reinforced AMEC's position as an engineering services leader in the strategically important Caspian region, which is estimated to hold 15 percent of the world's oil reserves. AMEC's services to the international energy, oil and gas industry currently account for approximately 25 per cent of the Company’s revenues. In recent months, AMEC has secured additional new contracts for major gas works for Transco in the UK, for fabrication and integration work for BP Clair in the North Sea and increased support services work for Shell in the North Sea through SIGMA 3, a seven-year £750 million joint venture contract (AMEC share is £250 million). In October, the huge 'Bonga' hull will finish its journey from Korea to AMEC's Tyneside facility where it will be transformed into the world’s second largest oil and gas floating production at AMEC's work yard in Wallsend. It will then destined to begin working for Shell offshore in West Africa in 2003.

AMEC owns 46 percent of SPIE S.A., the international electrical engineering, infrastructure and construction services company based in France, and has an option to buy the outstanding shares. The expected date for exercise of the option is November 2002 and subject to shareholder approval would be completed from early January 2003. Together, AMEC and SPIE employ over 50,000 people in close to 50 countries and generate a turnover in excess of £5.5 billion.


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