Baker Energy, a unit of Michael Baker Corp., signed a majoroperation and maintenance agreement with El Paso Production Co.that covers all of El Paso’s offshore production facilities in theGulf of Mexico (GOM). El Paso Production, formerly known as SonatExploration, operates more than 50 manned and unmanned oil and gasproduction facilities throughout the GOM. The contract has anexpected annual value of $12 million.

In addition, Baker and El Paso intend to negotiate an expansionof the contract that will assign all operational responsibility toBaker from the wellhead through the sales meter.

The contract is part of an operations consolidation Baker isleading throughout the GOM. It has implemented a new operatingmodel for the Gulf called OPCO(SM), under which, Baker has built aninfrastructure of supply boats, helicopters, shorebases, logistics,information technology systems and management personnel thatfacilitates sharing of resources and lowers costs for producers.

“Consolidating operations under Baker gives our clients anopportunity to tap the resources they need, like helicopters andtechnical specialists,” said Don Fusilli, president of Baker. “OPCOcreates an environment where we’ve improved efficiencies byspreading them across a greater number of facilities. The OPCOmodel applies economies of scale that achieve a step changereduction in operating costs for our clients that are difficult toachieve independently.”

Baker spokesman David Higie said the agreement with El Paso isone of the largest the company has signed. It also has agreementsof similar size with Mobil in the Gulf and BP Amoco offshoreVenezuela.

“The alliance we have formed with Baker is part of our drive tocontinuously improve our cost structure while maintaining safe andcompliant operations,” said Bill Griffin, El Paso Production’s vicepresident of operations and development. “We were impressed withBaker’s operational and health, safety and environmental trackrecord.”

Engineering firm Michael Baker Corp. is based in Pittsburgh,while its subsidiary, Baker Energy, is based in Houston.

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