Sunday 19 March 2017 3:43 pm

Wood Group’s chief exec says regulators must consider the fact North Sea oil has moved on

The chief executive of Wood Group said its £5bn merger with Amec Foster Wheeler will not be bad for the North Sea oil sector.

Last Monday Wood Group announced it had agreed a deal with Amec in the hope of generating cost savings of more than £100m.

The combined firm will hold a 60 per cent share of the North Sea market, City sources told the Daily Telegraph, a fact that will mean Wood Group will need to work hard to convince competition authorities that the deal is not detrimental to the North Sea market.

However, Wood Group boss Robin Watson said: "There have been changes in the North Sea over the last three years. It's a significantly smaller market.

"Regulators need to ask whether there is room for four top-tier contractors in the North Sea."

Investors reacted positively to the prospect of a tie-up with the share prices of Amec and Wood Group rising 18 per cent and eight per cent respectively after the deal was announced.

However, the share price of both firms fell steadily through the week, though still ahead of their market closing prices the Friday before.