Amec Foster Wheeler signals trouble ahead

Wood Group last month made an all-share offer to acquire its rival. Wood Group Chairman Ian Marchant said at the time the combination would expand market leverage and diversify the customer base.

The tie-up follows a trend in the industry marked by last year's mega-merger between Royal Dutch Shell and BG Group, and smaller deals like General Electric's majority hold over oilfield services company Baker Hughes.

Amec Foster Wheeler CEO Jonathan Lewis said last year saw a record gain for renewables, particularly solar power, though conditions looked different for the year ahead.

"We continue to expect another year of decline in oil and gas activity in 2017 and for solar activity to reduce significantly from the record levels seen in 2016," he said in a statement.

Oilfield services companies Baker Hughes, Halliburton and Schlumberger all said in their first quarter earnings reports that recovery in the energy sector was slow, but apparent.

Wood Group, meanwhile, cut about 35 percent of its payroll and drew down overhead costs by $96 million last year. Profits for full-year 2016 were 62 percent lower than the previous year, and Chief Executive Robin Watson said earlier this year that challenges remain and caution prevailed for near-term conditions on the oil and gas market.

Shareholders for Amec Foster Wheeler vote on the Wood Group offer in June.