Biggest US oil service company left out of work in Azerbaijan

McDermott Caspian Contractors Inc, daughter of the US McDermott company, the biggest foreign oil service company, which has been working in Azerbaijan for many years, is going to suspend its activities in the republic.

Turan reported that at the end of May the company completed its last order in Azerbaijan for BP company as part of the Chirag Oil Project (construction of underwater pipelines and diving works). Total staff of McDermott Caspian Contractors Inc for implementation of this project exceeded 500 employees.

In June 2014 the company started dismissing its workers and at present it has only office employees. This is because the company does not expect getting any projects in Azerbaijan in the near future. There is no information yet about closure of the company’s office in Baku. Most likely the office in Baku will not be closed, because it is a regional one.

McDermott has opened its office in Baku before signing of the first oil contract in Azerbaijan in 1994. Its first office was located in the Hand Games Palace (the company wanted to be closer to the SOCAR head office.). The company was a general contractor of construction of almost all BP platforms. It has also built the underwater pipelines.

However, in 2010 the US company failed to get the Chirag Oil Project (COP). This time alliance AzFen-Tekfen-Amec (ATA) has gotten the project for the platform construction. That time the US company has realized that it will be unable to work on the conditions it has been working for over 15 years and develop its business. But it did not want to change the rules of the game.

A source from SOCAR explained Turan that all these years McDermott has used SOCAR’s production capacities (Heydar Aliyev deep-water foundation plant and production capacities near Bibi-Eibat) almost for free  and involved SOCAR’s best specialists into its projects (without any transfer contracts). As a result of that SOCAR did not benefit from this cooperation. “The nationalization project started in the foreign companies in the past years (more local employees in management and more local technicians as well as establishment of joint ventures with SOCAR and other Azerbaijani companies) shows that the companies that will integrate with the local companies to implement the projects will be more successful in Azerbaijan,” the same source told Turan.