WOOD has said it expects to achieve moderate growth in the North Sea this year after appointing a big name from the oil and gas industry in the area as its next chairman.

Aberdeen-based Wood said Roy Franklin will succeed Ian Marchant as chairman of the group, which yesterday revealed it had clinched a $1billion (£0.8bn) contract to work on the Sellafield nuclear complex.

The 20-year deal will provide a boost for Wood as the firm looks to reduce its reliance on the North Sea oil services market in which it made its name.

Wood was hit hard by the slump in activity in the North Sea triggered by the plunge in the crude price from 2014 to early 2016.

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However, an update on trading in the area from Wood issued yesterday will boost hopes the North Sea industry is in recovery mode. The increase in the oil price since late 2016 has encouraged firms to invest in the area.

“We anticipate moderate growth in the North Sea as the year progresses,” Wood told investors at the company’s general meeting yesterday.

Wood suffered a setback at the meeting with 18 per cent of votes cast opposing the directors’ remuneration report. The re-elections to the board of executive Robin Watson and chief financial officer David Kemp were both approved by 99.5% plus of votes cast.

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After posting its first increase in profits for five years, in March Wood signalled that life was getting easier in the North Sea highlighting a positive outlook for modification work. This was hard to come by during the slump.

But Mr Watson said then conditions remained challenging in the North Sea, where margins remained under pressure.

In yesterday’s AGM statement Wood indicated that conditions were better in some other oil and gas markets. It noted good activity in US shale and relative strength in the Middle East.

The choice of Mr Franklin as chairman underlines the continued importance of the oil and gas market to Wood, although it has been targeting other engineering markets under Mr Watson.

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A 40-year veteran of the energy sector, Mr Franklin became a director of Wood after its £2.2 billion acquisition of Amec Foster Wheeler in 2017, a key move in Mr Watson’s diversification strategy.

Mr Franklin was a director of Amec Foster Wheeler, which had big positions in sectors such as environmental and nuclear engineering.

He achieved renown for growing Paladin Resources into a billion pound business. Paladin developed a global portfolio after buying North Sea assets that had fallen out of favour with giants.

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Mr Franklin is chairman of Premier Oil and deputy chairman of Norwegian giant Equinor. Both have big North Sea businesses.

Mr Marchant said Mr Franklin had made a significant contribution to Wood as a non-executive director, adding: “He brings a wealth of experience and will provide valuable continuity and support to Robin Watson in his leadership.”

A former boss of Scottish Hydroelectric owner SSE, Mr Marchant will hand over to his successor at Wood on September 1. Mr Franklin said Mr Marchant had provided an outstanding contribution during a period of transformational change.

Wood said the Sellafield deal provided a fantastic endorsement of its ability to meet the most complex nuclear decommissioning challenges.

The group will play a key role in designing a range of major projects and site-wide improvements at the facility in Cumbria, which is the site of the first UK nuclear reactor to be decommissioned and also handles waste from other facilities.

Amec Foster Wheeler was providing services at Sellafield when Wood bought the firm.

Wood told the AGM it is on track to grow annual underlying profits in line with market expectations, with $60m synergies from the Amec Foster Wheeler deal expected. It expects to grow revenues by around 5%.

Wood shares closed down 4.9p at 441.7p.