OREANDA-NEWS. London-listed oil field services company John Wood Group said upstream activity remains subdued as low oil prices squeeze project economics.

The order books of service companies are an indicator of oil company investment intentions and the impact of prices on future production capacity.

Wood Group's engineering division is seeing a drop off in subsea capital expenditure projects. Upstream engineering activity overall is "subdued" but the company said a high volume of pre-FEED, FEED and concept work is a positive indicator for the future although the timing of sanction for detailed engineering "remains uncertain". The PSN division — Wood Group's life-of-field support business — is seeing a cut back in North Sea projects and non-essential maintenance work. And the US onshore market is seeing a fall off in demand for both capital expenditure and operational expenditure projects.

But some business areas are benefiting from the boom in US oil production. Wood Group said that its onshore US pipeline business is performing "robustly".

Lower feedstock prices have boosted downstream process and industrial work.

Wood Group said that its first-half 2015 financial performance will be down on the same period last year but that it would be able to achieve greater savings than originally targeted and held its full-year guidance for earnings before interest, tax, depreciation and amortisation at around $470mn.