AMEC Foster Wheeler has reported a strengthening order book but warned that the fall in oil prices could impact on margins and demand for some of its services.

The engineering business, which has its European engineering division headquartered in Darlington, last year agreed a £2bn deal to buy US firm Foster Wheeler, which has offices in Middlesbrough. The rebranded Amec Foster Wheeler employs about 700 people in the combined Tees Valley operations, with an additional 200-plus in its environmental services headquarters in Newcastle.

An additional 500 people are employed across the region off-site or on project work.

In a company trading update today chief executive Samir Brikho noted the challenges facing the businesses.

He said: "The integration of Foster Wheeler is progressing according to plan, and we are encouraged by the initial customer reactions to our new service offering, including the first revenue synergy wins.

"In the first four months of the year we have experienced some challenging conditions. We have seen the benefits of our low-risk, multi-market model support our top line performance, and deliver growth in the order book to a new record."

In the first quarter of this year the company's order book rose 6.3 per cent to £6.7bn at the end of April .

The firm noted that the oil and gas market trends seen in recent months have continued with customers continuing to delay projects for discretionary capital spend. It said continued customer pricing pressure, particularly in the oil and gas market, is expected to generate a further modest reduction in the 2015 trading margin, compared to previous guidance.

In the meantime Amec announced it has been awarded four contracts from SP Energy Networks to construct three new overhead power lines and refurbish a further overhead line, all in South West Scotland.

The value of the contracts, which are scheduled to be completed by the end of 2016, has not been disclosed.

The new lines support the Government’s renewable energy objectives by enabling renewable energy to be distributed from Scotland to England and Wales.