WOOD has won a $130 million (£100m) contract to work on the water supply and sewage systems in an Australian city amid efforts to reduce its reliance on oil and gas industry work.

The success came as an analyst said the Aberdeen firm has been faster to respond to the climate change challenge faced by oil services firms than some other sector players.

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Amy Wong at UBS included Wood in a group of oil services firms that were “ahead of the pack” noting the progress it has made to win work in sectors such as wind power and solar energy.

The investment bank said oil services firms could face big challenges in future as efforts to slow the pace of climate change are likely to result in curbs being placed eventually on investment in fossil fuels.

However, Ms Wong said Wood had significantly reduced its reliance on oil and gas work since 2014.

She noted Wood appeared to be making efforts to adapt its strategy to take advantage of emerging trends in the energy and built environment markets. These include increased investment in renewable energy production and what are regarded as sustainable infrastructure assets.

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Wood gained exposure to a wide range of engineering markets, including nuclear, through the £2.2 billion acquisition of Amec Foster Wheeler in 2017.

Wood said yesterday it had won a three-year extension of a contract to work on clean and wastewater facilities and sewage systems serving Melbourne in Australia.

The other firms Ms Wong said were ahead of the oil services pack in terms of their progress in the renewables sector were Aker Solutions, Saipem and Subsea 7.

Specialists at UBS calculated that at the current rate of investment around $15 trillion will be spent globally on oil and gas exploration and production assets between now and 2050. They said that amount would have to be reduced to $5trn if carbon emissions are to be cut to zero by that time, net of amounts absorbed.

Wood agreed in August to sell its nuclear engineering business to Jacobs for £250m.

The Competition and Markets Authority last week launched an inquiry into that deal.