Scottish oil and gas firms to win funding

The £2.5 billion fund, which was launched last year by the big five British banks, is pumping £7.8 million into Aberdeenshire-based pipeline engineering firm Stats in return for a minority stake in the business.

Simon Munro, the BGF’s Scottish director, told The Scotsman that, each week, more and more companies are approaching the fund, which will invest between £2m and £10m for a minimum stake of 10 per cent.

Munro said: “The Central Belt in particular has been starved of equity funding sources in our size range and we are seeing more opportunities than expected. Our oil and gas pipeline is active and we are currently looking at ten potential investee companies in this sector.

“Scotland is on track to make its share of the 20-25 investments that BGF expects to make this year across the UK. In the longer term, we would see this as increasing to 30-40 investments per year UK-wide, which would dramatically expand the level of investment going into the small and medium-sized business sector.”

Commenting on the Stats deal, Munro – who was previously a managing director at Lime Rock Partners, a private equity investor in the oil and gas sector – said he had “personally known and admired this business for a number of years”.

He said the investment would allow Stats to grow more quickly. Munro added: “Unlike traditional private equity investors we are not under time pressure to exit. Our main aim is to support the management team for as long as we are needed.”

Stats chief executive Peter Duguid founded the company in 1998 together with his sister, Lorraine Porter.

They have grown the business to include 130 staff spread across offices in Canada, the Middle East and the Far East.

Turnover reached £14m last year and is expected to hit £25m this year, with much of that growth forecast to come from the Middle East.

The company’s tools, which are manufactured in-house, are used to isolate sections of pipe so that pumps and valves can be safely replaced. Stats said the ability to repair a pipeline without shutting it down and without evacuation can save its clients “tens of millions of pounds” in lost production.

Duguid said the investment from the BGF would help to take Stats from being “a successful UK firm to an international business of scale”.

He also plans to draw on the fund’s “experience and contacts” to help him take advantage of opportunities overseas.

Lloyds is also making more working capital available to Stats as part of the investment deal.

Audrey Baxter, chairman and chief executive of Fochabers-based soup and sauce maker Baxters Food Group, also serves as a non-executive director of the BGF, which is funded by Barclays, HSBC, Lloyds, Royal Bank of Scotland and Asia-focused lender Standard Chartered.