Elaine Maslin, 25th August 2011
INTERNATIONAL engineering and project-management company Amec has seen a resurgence in activity in the North Sea.
Despite falling production from operators in the first half and fall-out from the UK Government’s North Sea tax grab, Amec said it had seen a rise in work in the region.
It has picked up large contracts with supermajor BP, including work on its Clair Ridge development, plus BG Group and others and as a result it had needed to add staff.
Neil Bruce, chief operating officer for Amec, said: “We have hired in the North Sea business an additional 2,000 people in the first six months of the year.”
It now has 5,000 people working in the North Sea, onshore and offshore.
Mr Bruce said that, while production was falling, firms were looking to extend the life of assets or creating new facilities, such as Clair.
Projects which Amec was picking up ranged from brownfield to new projects and front-end engineering activity for the likes of BP was leading to engineering and project-management work.
Mr Bruce added: “I think we are picking up a far larger market share in terms of the market overall.”
Group turnover in the first half of 2011 was up 4%year-on-year at £1.48billion.
Earnings before interest, tax and amortisation (ebita) was up 9% at £122million.
Amec’s business is split between natural resources – including oil and gas engineering and services – mining and environmental and infrastructure engineering.
The boost in work in the North Sea saw the UK become Amec’s largest market in the first half, toppling Canada, which dominated in the same period in 2010 because of a large oilsand project with Imperial Oil.
Amec spent one-third, or £261million, of its acquisition war chest during the first six months of the year, including £33million on fast-growing north-east company qedi.
Mr Bruce added that a 50% increase in work in the firm’s mining division, focused on South America, Africa and Australia, was driven by high, stable, commodity prices.
Amec said it had a strong order book at £3.4billion, compared with £3.5billion at the same point in 2010, driven by its mining business, work in the North Sea and the Gulf of Mexico.
Staff numbers across the group rose 12% to more than 24,000 in the first half.
Looking forward, Mr Bruce said the firm was seeking to grow in South America, the Middle East and Australia, following emerging markets, with steady growth in more mature markets such as the North Sea and North America. However, he said that while the firm would continue its growth through acquisitions, the market had not been helped by the volatility in the stock markets, making possible takeovers feel undervalued. Its shares shed 4.3% at 876p.
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International energy-service group Hunting said yesterday that it was reaping the rewards of oil and gas industry investment in drilling and developing new resources.
Results for the six months to June 30 reflected the robust business environment, primarily because of sustained shale drilling activity in North America and a renewed appetite for deepwater offshore exploration, the company added.
London-based Hunting posted first-half profits of £22.1million from continuing operations, a 91% increase on the year before.
Revenue was up by 30% at £251.3million.
Chief executive Denis Proctor said: “Our businesses are performing well and continue to indicate good year-on-year growth.”
Hunting – which has a significant presence in the north-east – said the recently announced acquisitions of Titan Group and Dearborn Precision Tubular Products for a combined £526.6million reflected its strategy of acquisitive expansion in high-growth, high-margin sectors. It added: “Hunting’s business environment remains healthy, with key growth opportunities being captured on a number of fronts.”
Hunting’s shares ended the day down 2.6% to 639.5p.