Amec suitor Wood struggles amid price war in North Sea

Scottish oil services firm Wood Group today warned this year was shaping up to be “weaker than anticipated” after a string of hiccups in the North Sea and Middle East.

The Aberdeen-based firm, on track to buy rival Amec Foster Wheeler, offered no respite from the mood of caution clouding oil and gas markets, saying the sector “continued to present challenges”.

The FTSE 250 firm, which repairs and maintains rigs, said a price war for contracts renewed in the North Sea over the past 18 months and a moribund market had lowered activity this year.

Flagship projects in Azerbaijan, Saudi Arabia and Iraq — where it has a $40 million (£31 million) contract with US oil major Exxon — were also running slower than anticipated, hurting performance in the Middle East.

However, stronger performance is anticipated after the summer. Full-year results should also be in line with expectations.

The firm, which holds its annual shareholder meeting in Aberdeen today, unveiled its £2.2 billion deal with Amec in March, bringing together two of the UK’s biggest oil services groups.

Wood also signed a deal today with North Caspian Operating Company to help with the group’s assets in Kazakhstan.