THE Business Growth Fund has shown faith in the long term prospects for oil services firms amid the North Sea downturn by investing £10 million in an Aberdeenshire business led by big names from the industry.
The bank-supported fund has backed the Frontrow Energy Technology venture founded by former Expro boss Graeme Coutts, which is positioned to capitalise on the shake up in the oil and gas sector triggered by the crude price plunge.
Frontrow aims to harness the potential of small and medium sized enterprises in the North East to develop technologies which could help oil and gas firm in their efforts to cut costs and increase efficiency.
The company already owns a range of firms offering cost-saving technology. These include Well-Sense, which has developed what BGF described as an innovative and low cost way of collecting data from oil wells.
Noting the last two years have been tough for oil and gas firms and entrepreneurs, BGF director Mike Sibson said the fund would persist with a strategy that has seen it invest big sums in the industry. The fund says it provides truly long term capital to help firms scale up.
“This deal allows us not only to invest in the growth and development of Frontrow, but it also extends our reach into younger, earlier stage companies in oil and gas, and the broader energy industry,” said Mr Sibson.
Mr Coutts said: “This funding will allow us to acquire and to grow more high-potential companies in the energy sector.” Frontrow aims to build a group of world-leading technology businesses in the North East of Scotland, a centre for the development of subsea technologies.
Frontrow chief executive Stuart Ferguson was chief technology officer at the Weatherford oil services business. The company's management team includes Frank Summers, who held senior positions at Simmons energy investment bank and Bank of Scotland’s integrated finance business.
BGF chief executive Stephen Welton has said the fund wants to link its investment expertise with the skills of oil and gas firms and entrepreneurs to help maximise the potential of SMEs with interesting technology.
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