Scottish oilfield services company Wood Group sees market pressures lingering for 2017 despite gains in crude oil prices. File photo by Ali Haider/EPA
Feb. 21 (UPI) -- Even though financial performance was as expected, oilfield services company Wood Group said it expected only a few market bright spots for 2017.
The company reported a first half profit of around $45 million, down 60 percent year-on-year. As spending on exploration and production waned in response to market pressures, Wood Group cut about 35 percent of its payroll and drew down overhead costs by $96 million last year.
Profits for full-year 2016 were 62 percent lower than the previous year, which the company said matched its expectations.
Looking forward to a 2017 market on the road to recovery, Chief Executive Robin Watson said challenges remain and caution prevailed for near-term conditions on the oil and gas market.
Watson said in a statement the company was now "repositioned to enhance customer delivery and we are encouraged by their support for our services, albeit in a competitive pricing environment."
His company last year scored a series of wins, notably a $700 million contract in Kazakhstan to provide automation and control support for the Tengiz oil field, one of the larger oil fields in the region. The deal could help boost expected production by around 40 percent to 850,000 barrels per day by the start of the next decade.
Nevertheless, Wood Group said it was under pressure because of weakness in the energy sector as a whole.
"[The] oil and gas market continues to present challenges in 2017," the company stated. One of the few bright spots for the year, it said, was shale basins in the United States.