Scottish energy services company Wood Group said it would start work immediately on engineering projects at BP's operations offshore Azerbaijan.

Wood Group secured a five-year, $500 million contract to provide support for BP projects ranging from the Gunashli oil field to the Shah Deniz gas complex.

"Wood Group has a 40-year history of working with BP across their global assets and this new contract award is reflective of the strong relationship we maintain with this key client, built on collaboration and continued excellence and assurance in our service delivery," David Buchan, an eastern region managing director for Wood Group, said in a statement.

At a time when several companies like Wood Group are shedding jobs, the Scottish company said the agreement with BP would create around 200 new positions. Last week, the company said it would provide support services in the North Sea to Nexen, a subsidiary of China National Offshore Oil Corp., through a contract extension that meant 190 jobs would be retained in the region.

Wood Group this year cut rates paid to its North Sea contractors by about 9 percent because of negative market pressures. The company's rate reduction follows a 10 percent decrease for onshore contractors in 2014.

For BP, the company said in its latest quarterly report that its total spending was down 11 percent year-on-year to $4 billion.

Business unit Wood Group Kenny already works alongside BP in Azerbaijan. Azeri resources are seen as key to a European economy looking to loosen the grip of Russian energy companies operating in the region.