A Scots pipeline engineering specialist has secured £4.3m expansion funding in a sign that financiers still think they can make money in the oil and gas services business in the longer term.
Aberdeenshire-based STATS will use the funding raised from the Business Growth Fund to support a push to sustain its growth in key overseas markets like the USA and Middle East.
The Business Growth Fund, which is backed by five major banks, has already invested £7.8m in STATS to support the company's growth plans.
The fund has significantly increased its commitment to STATS despite analysts' predictions that the oil and gas services sector will be one of the main casualties of the near 60 per cent fall in the price of crude since June.
With firms that own oil and gas fields planning to slash spending in response to the price fall they are likely to put significant pressure on services firms to help them cut costs.
Simon Munro, director of the Business Growth Fund in Scotland, said the oil and gas sector remains an attractive area for the operation.
He said: "The sector is cyclical, and I've lived through a number of cycles over the last 20 years. Despite the current low oil price we are in the fortunate position of being able to take a long-term view so we can see positive opportunities in the current market."
The fund has invested in four oil services firms in Scotland.
Mr Munro said the fund plans to step up activity in a range of sectors in Scotland in coming months.
"During 2015 BGF is looking to increase the number of new investments which we make but also provide more follow-on capital for existing portfolio companies (as with STATS) to support further growth. I hope to have some follow-on deals to announce in the coming weeks," he said.
STATS has shown how Scottish oil services companies have been able to use the expertise they developed in the North Sea to win business across the world. This has in turn helped reduce their reliance on the North Sea.
Since the initial funding deal in 2012, STATS has doubled its annual turnover to around £30m and opened operational bases in Canada, the Middle East and the US.
Mr Munro said STATS' global expansion positions it well for the future.
He noted: " Most companies with activities in the North Sea have some exposure to the current oil price but STATS' global diversification softens any impact. It is operating and performing well in onshore markets in the Middle East and onshore pipelines in North America, which are less effected by the impact of the fall in the oil price. These are long-term pipeline contracts allowing the management team to strategically plan the growth of the business."
STATS' chief executive, Peter Duguid, said the latest funding will help the firm maintain the pace of its expansion in the US and the Middle East.
However the North Sea remains an important market for STATS. The group said its recent work included isolating the Forties Pipeline System on behalf of Apache North Sea so that a subsea isolation valve could be safely installed.
The company has no plans to reduce its North Sea workforce.
The £2.5bn Business Growth Fund has invested in 13 companies in Scotland since it started operating in April 2011. It is backed by Royal Bank of Scotland, Lloyds Banking Group, Barclays, HSBC and Standard Chartered.
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