WorleyParsons of Australia is acquiring the UK business of Amec Foster Wheeler in a deal worth £228million.
It is understood that, while there will be a modicum of rationalisation at the outset, the 3,000-plus people on payroll are thought to be secure.
The plan is to grow the business and to expand its remit beyond oil & gas to the broader world of energy including offshore renewables where a large operations & maintenance opportunity is now emerging in Europe.
AFW UK Oil & Gas had been put on the market under the instruction of the UK’s Competition & Markets Authority following acquisition of the wider Amec Foster Wheeler by Aberdeen’s Wood Group.
WorleyParsons says it will be a “robust entry Parsons into the UK North Sea market as a profitable market leader” and that it will accelerate its strategy to build a global MMO business.
Moreover, the deal gives AFW’s UK arm immediate global reach through its powerful parent.
However, Energy Voice understands that WorleyParsons faced significant competition to buy the business.
We are advised that the eventual short list of bidders comprised the US contractor McDermott, private equity player Blue Water Energy and WorleyParsons but that the last-named “blew the others away” with the scale of its bid.
That Blue Water was in the frame and possibly ranked second choice is a clear signal that a management buy-out had been on the cards. However this was not to be and the Australian group won the day.
Jim Lenton who has been leading AFW’s UK business of late will apparently continue in that role.
It reaches deep into the fabric of the North Sea with more than 50% of existing UKCS facilities installed by AFW UK; plus over 50% of the UK sector’s producing fields receive asset support and maintenance provided by the company.
Core clients include: BP, ConocoPhillips, Shell, Fairfield, Nexen, Maersk, Repsol Sinopec and Engie.
The company currently commands around 20-25% of the current operations and maintenance market compared with only 10% a decade ago.
It has a downstream capability in Glasgow office servicing local and international markets; an “asset light” business model with 98% of work reimbursable; a highly regarded management team with a strong track record and extensive local and global industry experience and relationships; and over 3,000 staff.
WorleyParsons CEO Andrew Wood said “AFW UK represents an attractive acquisition.
“We are excited to enter the UK North Sea market as a leading player based in Aberdeen.
“AFW UK is a world class integrated solutions business with best in class MMO capabilities and an excellent track record of international expansion. We look forward to combining AFW UK’s capabilities with our international platform to create a global MMO business capable of driving medium term growth.”
There is prior history of WorleyParsons working with the former Foster Wheeler through a joint venture which carried some significant LNG-related work including on Woodside’s Pluto development.