WOOD chief executive Robin Watson has underlined the scale of the opportunities the engineering giant sees in markets such as hydrogen amid the energy transition but said it has no plans to quit the North Sea oil services business.

As global leaders gather in Glasgow for the COP26 climate summit, Mr Watson said Wood had developed the capabilities to allow it to play a part in the vital effort to cut emissions. However, he does not believe the company’s support for the net zero drive will require it to turn away from the North Sea in which it made its name.

“We’ve been through quite a significant repositioning of the business and we think it’s borne out by the end markets we’re in are markets that are very much part of the future and present,” Mr Watson told The Herald, adding: “If anything in our view the pandemic has accelerated the energy transition.”

Mr Watson noted that businesses owned by Aberdeen-based Wood have been involved in about 20 per cent of the wind power installed globally and have fitted more than six million solar panels in the USA.

These include operations acquired through the £2.2 billion takeover of Amec Foster Wheeler in 2017. This left the firm with expertise in hydrogen, which Mr Watson reckons makes it a world leader in a market he thinks will become huge.

“We think hydrogen will be a significant part of the energy mix over the next decade and we think we have a track record that’s second to none,” noted Mr Watson.

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Wood turned heads last week when it reached an agreement to work with the HYGEN business led by JCB heir Jo Bamford on a plan to develop hydrogen production plants across the UK.

Wood is also involved with carbon capture and storage projects that champions believe could be used to deal with huge amounts of emissions, including through projects linked to the production of hydrogen from natural gas.

It is doing engineering design work on the Hynet CCS scheme covering North West England and North Wales that was selected for fast-track status by the UK Government.

But Mr Watson said he expects oil and gas to remain an important part of the energy mix “over the next decade, if not generation”.

Oil and gas production will be needed to ensure the UK has secure and affordable energy supplies until enough alternative sources are developed.

“We do need to keep the lights on, we do need to keep the economy going as well as reduce carbon intensity so our view is that the North Sea has a role to play in that, hydrocarbon fuels have a role to play,” said Mr Watson.

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He believes the North Sea industry compares favourably with those working in other basins on environmental grounds.

“The North Sea stacks up very favourably across the globe with the quality of the mix of gas and oil and the relative quality of the carbon footprint per barrel of oil equivalent and we work continually with our clients to reduce that.”

Against that backdop Mr Watson said he expects oil services to remain part of Wood’s portfolio for some time, without being specific about how long.

“We feel we have the right range of services across an appropriate array of end markets,” said Mr Watson. He added: “We don’t have any plans to do anything other than maintain that footprint, which includes the North Sea.”

However, the nature of oil services work is changing.

“Whereas traditionally the work we would do would be largely around improving production levels or reducing operating costs, or safety improvements, now we’re increasingly looking at reducing the carbon footprint of operating assets,” explained Mr Watson.

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For example, Wood has installed solar grids at refining facilities in Europe for Shell. It has adapted offshore oil and gas platforms for Equinor so that they can run on renewable energy.

Mr Watson hopes COP26 will stimulate the required debate. “I’m hopeful from COP that we converge more on carbon intensity reduction and get a bit more of a quality discussion around that,” he said.

Wood has hosted COP26-related events run by organisations such as the Resilient Cities Network and the Energy Industries Council in its Glasgow offices this week.