OEG US deal as Aberdeen oil and gas outlook 'not great'

The Herald Scotland

24-07-2025

'Primarily during the last few years we've done a lot of acquisitions which were mostly focused on offshore wind," Mr Heiton said. "This one stands out as sort of our first oil and gas focused investment since 2021 when we acquired one of our major competitors.
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"We were awarded one of the big two oil producer contracts earlier this year in the Gulf of Mexico. The customer unfortunately won't allow us to mention their name, but the biggest two are BP and Shell, so take your pick.
"It meant we needed some more equipment and that was how we got in discussions with one of our principal competitors as a way of sort of feeding that award."
The company has effectively doubled its footprint in the US in terms of assets, employees and turnover, and now has a global headcount of approximately 1,500 employees. The UK, with 250 staff at the Aberdeen headquarters, remains the largest in terms of employment, now followed by 180 people in the US.
The four-year contract in the Gulf of Mexico is worth "tens of millions", Mr Heiton added.
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Renewables contracts with the offshore wind sector continue to account for the majority of revenue, roughly 55%, at OEG and will represent the lion's share of future acquisitions even though discussions are taking place about other potential deals for offshore container operations that service the oil and gas industry.
'Frankly, we haven't made that many acquisitions [in the containers business] because there's not that many companies to buy," Mr Heiton said. "TRS driven by the contract, and they were people we had talked to off and on for frankly about the last four to five years already.
"We also recognised them as an up-and-coming threat, so it was also a way to remove a threat as well."
He added: 'This one is unusual in being a cargo logistics acquisition, which we have two others in discussion, but obviously discussions don't always lead to a deal. We have around 10 or 12 in discussions at the current time in offshore wind, so we still expect the majority of our M&A work to be in offshore wind going forward.'
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"Luckily", Mr Heiton said, OEG depends on oil and gas activity in the North Sea for only a small proportion of its revenue. The sector has been struggling under the UK Government's 78% on oil and gas operators via the Energy Profits Levy.
'Our oil and gas focused North Sea business is probably around about, certainly less than 10% of our overall business, but we are based here and we would love it if the government was more supportive of our domestic operations," he said. "We are a heavily production-focused business so we are not as affected by the new projects side, but also capital projects are what drive production.
'The outlook here is not great, the mood is not great. It has the benefit for us that we've managed to hire some really great people with really good experience and talents, but you would prefer there was a better domestic market and support from the government.'
Apollo announced in March that it had agreed to acquire a majority stake in OEG from Oaktree Capital Management in a deal that valued the business at approximately $1 billion (£737 million). Apollo now owns about 70% of the business, with minority stakes retained by Oaktree and OEG's management team.