WOOD Group has won a $500m (£300m) contract in the North Sea that will safeguard around 550 jobs in the UK.

The Aberdeen-based oil services giant has been appointed by Talisman Sinopec to provide engineering support on 11 production facilities off eastern Scotland and the Flotta oil terminal on Orkney for five years.

The extension provides a vote of confidence in Wood Group from two significant overseas oil and gas firms.

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Talisman Sinopec was formed in 2012 when Sinopec, a state-owned Chinese firm, acquired a 49% stake in the North Sea business of Canada's Talisman for $1.5bn.

The award provides further evidence of the boom conditions that have developed in the oil services market in the North Sea, where companies are trying to boost production to cash in on buoyant demand.

Last week, Wood Group announced it increased profits by 14% in 2013, to $413m, amid strong activity in the North Sea and US shale fields. Its chief executive, Bob Keiller, said Wood Group expected to remain busy in the North Sea for years.

Wood Group has worked with Talisman on the assets covered by the contract for 10 years. It does maintenance work on the assets for Talisman Sinopec under another contract.

Dave Stewart, UK managing director of Wood Group's PSN arm, said: "Our Talisman Sinopec Energy UK project now employs 1300 personnel, making it one of the largest projects in our global portfolio."