North Sea projects are backed up like planes waiting to land at Heathrow, according to Amec Foster Wheeler (AFW) senior executive John Pearson.
Mr Pearson, group president northern Europe and Commonwealth of Independent States, AFW, said yesterday there was a brighter future facing a leaner, fitter UK offshore oil land gas industry.
Speaking after engineering and project management giant AFW posted results showing a sharp fall in trading profits to £374million in 2015, from £457million a year earlier, he said the current downturn had no impact on the firm’s long-term commitment to Aberdeen.
“Our Aberdeen office is a symbol of that,” he said, adding the firm’s 4,500-strong Scottish workforce was “massively focused” in the Granite City area and offshore.
AFW acquired 42,812sqft within EnQuest’s Annan House North Sea headquarters last year in one of the biggest office lettings in Europe’s energy capital in recent times.
Mr Pearson said efficiency was key to the North Sea industry emerging from its current crisis in the best shape possible.
He added: “It is not the oil price or costs that are the problem – it is efficiency.
“We have to crack that and if we do so, it will stand us in good stead for whatever the oil price throws at us in the next couple of years.
“We already had a problem at $100 oil,” he said, adding the industry needed to use the current crisis to get fitter for the future.
He said AFW’s plans, announced yesterday, to sell its Global Power Group (GPG) unit as part of measures to reduce a near £1billion debt pile would have no impact on the company’s north-east operations.
And looking ahead to future work in the North Sea, despite the current malaise and dwindling oil resources, he said: “There are still 20billion barrels left.
“There are projects stacked up like planes waiting to come into Heathrow Airport”.
AFW was one of the first major oil services groups to cut North Sea contractor rates in recent years as the industry slammed the brakes on employment costs.
Last year, then chief executive Samir Brikho called on the oil and gas sector to “reinvent” itself in the wake of lower crude prices.
Mr Brikho was ousted at a board meeting held on the eve of a trading update from the firm in January.
The company, created through Amec’s £2billion takeover of rival firm Foster Wheeler in 2014, said yesterday it aimed to halve its net debt within 15 months.
Interim chief Executive Ian McHoul declined to specify how much disposals, including GPG, could fetch but he expects them to fund most of the reduction in debt.
AFW posted pre-tax losses of £235million, compared with profits of £155million a year earlier, after one-offs including £444million of acquisition-related and other exceptional charges.
Revenue was down by 7% at £5.5billion, while the company also reported an order book worth £6.6billion at the end of 2015.