AN offshore engineer targeting a North-East rival has secured a £40m contract to deliver energy services to two North Sea platforms.

Wood Group will work with Premier Oil to provide topside operations and maintenance to the Balmoral floating production vessel (FPV) and the Solan installation.

The two-year deal comes just days Wood revealed it had reached an agreement to take over Amec Foster Wheeler in a £2.2bn deal.

That move has fuelled fears over roles at Amec’s County Durham base, in Darlington, with bosses saying a third of savings are expected to come from office closures and cuts to duplicate IT systems and central support services.

Referring to the company's Premier Oil agreement, Dave Stewart, Wood Group chief executive, said: "This contract clearly demonstrates the strong partnership we have developed with Premier Oil in the North Sea."

Wood's Amec tie-up is expected to result in "significant cost and revenue synergies" of at least £110m a year", according to bosses.

Amec’s Darlington site, on Lingfield Point, employs hundreds of people and has experience of managing recruitment and support services, such as payroll work.

The agreement, which shareholders will vote on later this year, comes just weeks after the Echo revealed up to 45 Amec posts were at risk of being moved from Darlington to India in a restructure aimed at reducing the business’ £1bn debt pile.

Amec, which has a further office in Newcastle, expanded in 2014 when it took on Foster Wheeler to target greater oil and gas work but has suffered from the fall in oil prices and associated weakness in the offshore sector.

It had planned to launch a £500m rights issue to bolster its balance sheet, but those plans have been suspended following Wood's offer.