BG signs oil contractor deal with KBR to reduce costs
LONDON Jan 28 (Reuters) - Oil and gas producer BG Group has signed an agreement with oil services company KBR to hire skilled contractors for its large-scale projects at short notice, an alliance that will allow BG to cut hiring costs.
The agreement, which will last six years with an option to extend it to 10 years, will mean BG can call on KBR's global experts, including engineers and builders, as and when they are required for its large projects such as ones planned in Brazil, Tanzania and the United States.
"In a lower oil price environment this is an important aspect of the alliance which enables BG Group to help minimise its fixed costs," the company said in a statement.
Oil producers across the world have been scrambling to find ways to reduce costs to deal with a 60 percent fall in oil prices in seven months.
Others have already announced cuts to project investments and staffing levels.
Oil service providers have tried to mitigate the impact of lower investments on their businesses by offering lower rates. (Reporting by Karolin Schaps; Editing by Crispian Balmer)
© Thomson Reuters 2016 All rights reserved.