Engineering contract brings 250 skilled jobs

Apr 30 2008 by Peter McCusker, The Journal

UP to 250 skilled jobs are to be created by North East engineering company Chieftain on the back of a massive deal to supply an oil and gas firm.

The Newcastle plc saw its shares rise 7.5% to 187.5p yesterday after announcing the biggest contract win since it was founded 30 years ago.

A spokeswoman said the contract would generate 80 to 100 new jobs at its four-acre site beside the Tyne at Walker, and 150 at its two-acre site in Middlesbrough, but declined to give details of the contract.

Chieftain chief executive Bill Taylor said: “Not only does [the contract] reflect the sheer progress we have made in recent years and the inherent quality of our services offered, it endorses the world-class status of the North East of England in this demanding, high-growth sector.”

The deal highlights the massive growth of the oil sector in the North East.

The subsea sector in the region grew 30% last year and is expected to continue growing for many years.

Experts say 50 North East firms are involved in the sector, employing 5,000 people and contributing £500m to the local economy.

George Rafferty, chief executive of NOF Energy, the umbrella organisation for the region’s oil and gas sector, said: “This demonstrates the strength of the oil sector in the North East and is an endorsement of the skills that exist here in the region.”

One NorthEast director of business and industry Ian Williams said: “The North East is fast developing a reputation as a UK hub for offshore oil and gas engineering and I am delighted that Chieftain is demonstrating such a commitment to the region, enhancing our status as source of highly-skilled engineering talent.”

Chieftain said work would start immediately and be completed this time next year but it was optimistic about securing a second contract later this year.

Industry sources say the contract is likely to be for fabrication and pipe insulation work on the £300m Sea Dragon contract recently announced by Billingham’s Haverton Hill yard.

The Haverton Hill reopened last month to build two drilling rigs for the Gulf of Mexico.

The deal between the Tees Alliance Group and SeaDragon Offshore will see the first rig delivered by 2010, with a second to follow and a contract to build a third rig under negotiation.

Turnover surges

EARLIER this month Chieftain revealed that turnover had surged 39% to £46m in 2007.

The Newcastle plc said it had been an outstanding year in which the firm’s pre-tax profits climbed 40% to £2.1m.

In its report for the year to December 31, 2007, the company revealed its biggest ever order book of £69m.

Chieftain said its maintenance division had been a major contributor to group profits.

It said that its fabrication division had seen mixed fortunes with pipework fabrication failing to secure enough work to fill its facilities to full capacity.

It appears to have addressed this problem.