McDermott Caspian Operations: Job Cuts a Quite Normal Processt

McDermott Caspian Operations: Job Cuts  a Quite Normal Processt

It is typical of project cycles that a period of growing activity and increasing employment is followed by reduced activity and employment as work is completed. McDermott, as well as other AIOC's and BP's contractors, has begun to experience this effect as 2006 progresses, McDermott Caspian Operations exclusively told Trend today.

Our contract with AIOC stipulated the pipelines installation and the construction of four large integrated platform topsides. Three of them have already been built, and the building of the last platform will be completed by the summer of 2007. We began to manage the expected decrease in work volume and scope, and this will mean having to release a number of workers. But with the project yet to be completed it is too early to give precise figures, as offshore hook-up and commissioning of the East Azeri platform is still continuing, McDermott Caspian Operations told.

The Company told that in addition to the compressor modules fabrication for the AIOC's Compressor and Water Injection Platform (C&WP) and Central Azeri (CA) platforms, we have been also awarded pipelay projects including a subsea pipeline installation work for the AIOC's Deep Water Gunashli (DWG) field development.

We have yet to determine the precise number and qualification of the employees to be involved in the projects. It is anticipated that at peak the modules will require approximately 200 employees these will be tradesmen such as welders, pipe fitters, structural fitters, electricians, instrument fitters, riggers, painters and scaffolders, the Company pointed out.

From mid-July, when EA topsides were ready for sail-away, to mid-October this year, we have reduced our Azerbaijani work force by a total of 190. Our current complement of Topsides personnel with respect to percentage Azerbaijani content consists of:

- Overall 81.5% Azerbaijani personnel.

- Hourly paid 86.6% Azerbaijani personnel.

- Admin staff 78.6% Azerbaijani personnel.

It is anticipated that by year end we will have reduced our work force from approximately 1,800 to about 1,000 people. It is the nature of the construction industry everywhere that jobs are of a short-term nature. However, as a result of the extensive training and the qualifications gained during their time with McDermott, our employees are well placed to find other work in the industry when their contract comes to a natural end, McDermott pointed out.

We hope that both our employees and the public will understand the reality of having to maintain staff levels compatible with the workload. In managing the decrease in activity levels, one of our prime objectives is to sustain employment for Azerbaijani employees wherever possible, told Vice President and General Manager of McDermott Caspian Operations Dan Houser.

We believe McDermott has a good chance of receiving work in Kazakhstan, Russia and Turkmenistan. In these countries the volume of construction work in the oil-and-gas sector is gathering pace. We think that there is an opportunity to obtain contracts from other countries in the Caspian region for the Azerbaijan enterprises and foreign companies operating in Azerbaijan, continued Houser. We aspire to be a major contributor to the Azerbaijan construction sector and local economy for many years to come, he pointed out

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