WorleyParsons £228 million acquisition of Amec Foster Wheeler is “positive for the North Sea” according to a leading market analyst.
The Australian professional services firm unveiled that it was snapping up the UK business section of the engineering firm yesterday.
It comes following the merger of the rest of the firm with service giant Wood Group.
The combined group will now be known simply as ‘Wood’.
It is understood WorleyParsons long term plan is to expand the remit of Amec Foster Wheeler beyond oil and gas and into a broader energy sector including offshore renewables.
Andrew Reid, president of consulting with Westwood Global Energy Group, said WorleyParsons’ global reach should benefit Amec Foster Wheeler and in turn the wider UK continental shelf.
Mr Reid said: “It’s a positive for the North Sea.
“WorleyParsons are a proven engineering and project delivery business operating across the upstream and infrastructure sectors worldwide.
“While their presence in the UK is limited to date, the acquisition is a sound entry move as traditionally the barriers to entry have been high as many engineering and operational support contracts in the region have been captured by the incumbent players on long term deals.
“We would hope that this investment would be the cornerstone of a greater European presence and as such we would expect WorleyParsons to continue to, and perhaps increase its investment in people and infrastructure in the region.”
Paul Main, manager research for upstream supply chain with Wood Mackenzie explained that the acquisition puts Amec Foster Wheeler in position against service giants Wood and Petrofac.
Mr Main said: “WorleyParsons are very good at topside design but a lot of their main focus has historically been around Australia and south-east Asia. For them to come and get into the operations and maintenance market is very interesting.
“It’s a good buy from my perspective.
“Obviously with this kind of takeover there will be some rationalisation of staff here and there. That’s inevitable.
“But if they are coming in with a new management they are going to need people who know the facilities that these guys are on.
“Technology wise WorleyParson are a very similar company to Wood Group and Amec Foster Wheeler as it was. It’s a good fit.”
WorleyParsons says it will be a “robust entry” into the UK North Sea market.
More than 50% of existing UKCS facilities were installed by Amec Foster Wheeler (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.