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Scottish jobs under threat as oil and gas engineering firms face challenges

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The moves come amid concern that North Sea firms could cut oil and gas investment as fields run dry and the windfall tax eats into earnings.

Firms are confident that they will be able to use skills developed supporting oil and gas firms to win work in offshore wind and emerging low carbon energy industries.

However, business wins may not come fast enough for firms to be able to generate the cash needed to fund investment in new services and to make payouts on the scale shareholders expect. Some are trying to repair balance sheet damage suffered during the pandemic.

Enermech has announced plans to cut 120 jobs in Aberdeen as fears mount that its Granite City rival Wood will axe hundreds.

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The cuts at Enermech form part of a programme that will see the group shed 250 jobs around the world amid a drive to reduce debts.

Wood is reported to be preparing to announce swingeing job cuts alongside its annual results next week.

Enermech said it has completed a recapitalisation which will allow it to secure a “substantial debt reduction”, without giving details.

It is understood that private equity giant Caryle has sold its controlling stake in Enermech. London-based Polus Capital Management has acquired a majority interest in Enermech. JP Morgan and Intermediate Capital have also bought into the business.

The new owners are thought to have launched an efficiency drive after Enermech faced pressure on margins amid the recovery from the pandemic.

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Enermech is parting company with chief executive Christian Brown, who has led the business for four years.

Mr Brown will be succeeded by oil services veteran Charles Davison.

Reuters said Wood was preparing to cut 200 jobs to help boost efficiency citing a report on Sky News.

Wood held talks about a potential takeover with Apollo Global Management last year. Apollo increased the price on offer three times, to £2.2 billion including debt, but eventually walked away.

Wood had faced investor unhappiness regarding its share price.

Asked about the reported job losses a spokesperson for Wood said the company would not comment on speculation ahead of publication of its annual results on Tuesday.

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The company employs around 6,500 people in the UK. The bulk are based in Aberdeen or work offshore in the North Sea.

Carlyle bought Enermech in a £450m deal in 2018.

Enermech employed 4,116 people globally in January of this year.

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