OIL services tycoon Alasdair Locke has said there is a bright future for the North Sea after the Motor Fuel Group he leads acquired its biggest rival MRH in a £1.2billion deal.

The enlarged business will operate more than 900 sites across the UK, including 93 in Scotland. The sites house fuel sales operations and retail outlets trading under brands such as Spar and Hursts.

Mr Locke will remain chairman of the enlarged MFG, as he prepares for a move into the fast-expanding gin distilling market.

The acquisition is the latest in a series of deals in the sector that Mr Locke has been involved in since buying MFG with private equity backing in 2012.

Describing the takeover as transformational, Mr Locke said the enlarged firm will work to consolidate a highly- fragmented market and expand its retail offering across the combined estate.

Banffshire-based Mr Locke made around £120m when the Aberdeen-based Abbot drilling operation he built was sold to private equity group First Reserve for £906m in 2007.

He helped found the Well-Safe Solutions decommissioning business last year.

Asked yesterday about the prospects for the North Sea oil industry following a three year downturn in the area he said: “There’s still lots of economically recoverable oil out there. It will be a big industry for the next 20 or 30 years.”

The partial recovery in the crude price since late 2016 has boosted returns.

Mr Locke made £64m last year after the Argenta insurance firm he led was sold in a £142.5m deal.

Noting he is developing a gin and vodka distillery near Dufftown, Mr Locke said:“Everyone else is doing whisky. We thought we’d do something different.”

The entrepreneur said the distillery will produce organic Speyside spirits. He expects construction work to be completed in time to start production in September or October.

The distillery will have a visitor centre. Mr Locke expects it will employ around 12 people.

MFG's acquisition of MRH, from America's Lone Star Funds, reflects strong interest in the petrol forecourts sector among private equity investors.

Clayton Dubilier & Rice backed the takeover 18 months after supporting a £500m buyout of MFG from Patron Capital.

Lone Star Funds bought MRH in January 2016.

“Both MFG and MRH operate in a stable market and are highly focused on convenience with a track record of consistent growth,”said CD&R Partner Marco Herbst. He added “As petrol forecourts transition to customer-focused convenience and food-to-go hubs for local communities, this platform is distinctly positioned to meet this growing demand across the U.K.”