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Only modest recovery in some areas

North Sea remains challenging says Wood

Robin WatsonTrading in the North Sea remains challenging despite benefits of cost-cutting, says Wood Group.

In a trading statement it said there were “continued challenges” in our core oil & gas market with modest recovery only in certain areas.

Robust activity in the Americas, including improved performance in offshore greenfield project engineering and commissioning is being more than offset by weaker activity in the east, where the company has seen a further reduction in projects & modifications work, particularly in the North Sea.

“The impact of the tougher pricing environment in 2016, partially offset by the enduring benefit of structural cost reductions achieved in the last two years, will result in a reduction in first half margin as expected,” it said.

“First half performance is down on 2016 and weaker than anticipated. We are more cautious on the full year outlook but anticipate a stronger second half.”

On 15 June shareholders overwhelmingly approved the recommended all-share offer for Amec Foster Wheeler.

“Our objective is to create a leader in project, engineering and technical services delivery across a broad range of industrial markets, predominantly focused on oil & gas. Our current focus is on integration planning ahead of completion, which is expected in the 4th quarter of 2017 subject to competition approvals.”

Husky Energy has awarded Wood Group a multi-million dollar contract to complete detailed engineering for the topsides of White Rose, a concrete gravity-based structure wellhead platform planned for offshore eastern Canada. The project includes procurement services and engineering design work.

The Wood Group team has identified several project innovations to significantly reduce engineering person-hours and realize other savings at White Rose.

Robin Watson (pictured), chief executive of Wood Group, said: “We are combining our global expertise and capabilities from St. John’s, Canada; Houston; Sandefjord, Norway; and Bogotá, Colombia to complete White Rose in the next 12 months with a clear focus on adding value and delivering cost savings and efficient project delivery.”

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