Abbot aims to double Libyan revenue

OIL services specialist Abbot Group plans 'a major expansion' in Libya as some of the world's biggest exploration companies return to the North African country.

The company, which designs drilling rigs, recently picked up deals with Italy's AGIP and Wintershall of Germany and hopes to double its revenue from Libya in 2005.

Pre-tax profits slipped £900,000 to £13.2m in the first half-year to 30 June. But the interim dividend is 1.6p, up from 1.4p a year ago.

The group said its outlook was one of the best it had seen for many years as global oil demand and limited new supply offered a significant opportunity in coming years.

'The outlook for the provision of oil drilling services over the next several years is as good as I have seen in my whole career,' executive chairman Alasdair Locke said.

'World demand is growing at a time when conventional production is declining year by year, so in order to increase production there has to be very substantial amount of development in production drilling.'

Locke shrugged off the dip in pre-tax profits, which he said were due to the weaker performance of its non-core Spear Technologies business, adding that it would hopefully be sold before the year's end.

He said the underlying business was in good shape with earnings per share in line with expectations at 5.4p - unchanged from a year ago. The weak dollar had also put a damper on results, he said.

The shares recovered from early losses to trade up 3p at 1999.