The Prospect Of Higher Oil Prices

John Wood Group, the oil services specialist, posted a 32pc increase in profits to $50.9m before tax yesterday on the back of strong oil activity in North America and the North Sea.

The group claimed to be benefiting from the increase in offshore exploration. It is currently servicing seven of the 14 deep-sea projects in the Gulf of Mexico, four of which are with BP, accounting for about 18pc of revenues. Chairman and chief executive, said that now they are players in the Gulf of Mexico operations and maintenance market and we believe we are well placed to participate in the developing deepwater market. The group is also handling project management and engineering for BP Clair, the largest new North Sea field development. Both operations are part of the engineering and production facilities division. Weak US gas prices and political turmoil in Venezuela were the only blot on the group's copybook. Profits from the well-support division, which services the oil-extraction process, were down. Analysts said there had been selling as fears of an attack on Iraq, and the prospect of higher oil prices, receded.

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