Lamprell will consolidate its operations at the Hamriyah fabrication yard, while closing the Jebel Ali and Sharjah facilities
Oil rig construction firm Lamprell is set to close two of its fabrication facilities in the UAE in order to achieve a significant reduction in the group overhead and for achieving operational efficiencies.
The UAE-based firm said that for the time being, it will consolidate its operations within one yard, having reviewed its existing operational presence against the fabrication requirements in the medium term.
The oil rig construction firm has already mothballed its Jebel Ali facility since January 2020. Plans are on to close its fabrication facility in Sharjah later this year after some of the work on the 950MW Moray East offshore wind farm project is completed.
Lamprell’s Hamriyah fabrication yard, which is its largest facility, will continue to operate. The facility is expected to offer various expansion opportunities if the company needs additional space.
The company said that its actions will enable it to grow fabrication volumes gradually while considerably boosting efficiency and reducing its cost base.
The measures announced by the oil rig construction company will result in significant reductions in headcount and allowances, most of which are said to have been implemented already.
The oil rig construction company is said to have more than 4,000 people across various facilities.
Lamprell expects its measures to yield a reduction of about $23m in overheads for this year.
The company said that all works, which include construction of two Keppel LeTourneau Super 116E jack-up drilling rigs for International Maritime Industries (IMI) and the Moray East project will continue to be executed. The first jackets of the offshore wind farm in Scotland is expected to be supplied on time and on budget, said Lamprell.
Lamprell CEO comments on the cost-cutting measures
Lamprell CEO Christopher McDonald said: “We are operating in a period of unprecedented global uncertainty, focusing on the safety and sustainability of our operations and the health and wellbeing of our employees.
“Amidst industry-wide insecurity and distress, we continue to deliver our projects safely and reliably and we remain focused on strict financial discipline to sustain a healthy balance sheet and progress our strategy.”