International engineering company Wood Group has seemingly expanded its fossil fuel business despite receiving a $600m (£478.29m) UK Government-backed “green transition loan”.
According to an investigation by the Guardian, Wood Group has reduced its renewables offer during the period following the loan acceptance.
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By GlobalDataThe sum was announced in August 2021 by then-International Trade Secretary Liz Truss, who congratulated the company on its “great strides in repositioning its business for a low-carbon future”. The five-year term loan was intended to assist the company in its transition away from fossil fuels.
Wood Group told Offshore Technology that: “This is not a loan from the UK Government. They acted as a guarantor to a loan provided by international banks.”
The Scotland-based company grew its upstream oil and gas business by 17% in 2022 to reach more than $3bn in revenue, up from $2.6bn in 2021.
Over the same period, the renewables and hydrogen arms of the business were reduced by 35%. Renewables and hydrogen accounted for revenues of $222.8m in 2022, down from $344.6m in 2021.
After receiving the loan, Wood Group was awarded 20 oil and gas contracts including a multimillion-dollar contract with Saudi Aramco for the development of Saudi Arabia’s Safaniyah and Manifa oilfields.
Following the announcement of the Saudi Arabia project, in December 2021, Wood Group’s president of conventional energy said the company “will apply our technical expertise and digital insight to this mega-project, helping to maximise production for two of the world’s most significant offshore oilfields”.
Accusations of greenwashing
Wood Group told Offshore Technology that it “remains committed to playing a critical role in the energy transition”.
“The key performance indictors of the loan centre on reducing our own scope one and two emissions and growing our sustainable revenues. We are pleased that we achieved a 65% reduction in our scope one and two emissions,” the company said in a statement.
“This demonstrates that, in at least one case, the government’s transition export development guarantee scheme has facilitated greenwashing,” countered Robin Wells, a spokesperson from Fossil Free London, to the Guardian.
“It should not be possible for a company to receive a green transition loan and then double down on the expansion of its fossil fuels business.”
Wood Group dismissed accusations of greenwashing in its sustainability strategy, and claimed that it was committed to sustainability.
“We have invested to bring technologies and clean fuel technology to the marketplace, and this is an area of service provision we are growing,” says chief sustainability officer Linzie Forrester in the report.
