AMEC plc has acquired Houston-based oil and gas engineering services company Paragon Engineering Services Inc. (“Paragon”) for US$38 million in cash (approximately £20 million). This acquisition furthers AMEC's strategy of expanding its oil and gas business and establishes the company as a Tier One contractor in Houston.

“Houston is the decision centre of many of the world’s major oil and gas companies and an expanded presence there is a big step forward for us,” said Sir Peter Mason, AMEC chief executive. “Oil and gas is our largest end market which accounts for one third of AMEC’s total business and we regard it as a real priority for the future.”

“Paragon has a blue-chip client list and an excellent reputation,” said Neil Bruce, managing director of AMEC’s oil and gas business. “There is real synergy in this deal as their specialist engineering expertise and strong relationships with Houston based customers complement our skills in the project management and engineering of large and complex facilities and asset support services. Together, we will be able to provide enhanced total “life of asset” service to our oil and gas customers.”

Paragon will be merged with AMEC’s existing Houston operations and the new company, ‘AMEC Paragon Inc’, will operate as part of AMEC’s global oil and gas business, which is headquartered in the UK.

Internationally, Paragon will give AMEC access to South American markets, as well as expanding AMEC’s capabilities and customer base in the Middle East, Alaska, West Africa and China through complementary customer relationships and secured work. With some 550 employees, Paragon had total turnover in 2003 of US$57.9 million (approximately £31 million).

“Paragon and AMEC have worked together on a number of proposals,” explains Simon Naylor, president of AMEC’s American oil and gas operations based in Houston. “We are impressed with their customer focused culture, high quality people, and proven track record of providing rapid response for engineering projects.”

Notes to editors:

AMEC plc is an international project management and services company that designs, delivers and supports infrastructure assets for customers worldwide across the public and private sectors. AMEC employs 45,000 people in more than 40 countries, generating annual revenues of around £5 billion. AMEC’s shares are traded on the London Stock Exchange where the company is listed in the Support Services sector (LSE: AMEC.L).

Paragon Engineering Services, Inc. (www.paraengr.com) was founded in 1980 to provide engineering, design/drafting, procurement, inspection, construction management, and training services to the oil and gas industry. Headquartered in Houston, Texas, its 550 staff specialise in production facilities, platforms, compression facilities, onshore and offshore pipelines, floating production systems, and subsea systems. Overall, the company has completed more than 3,500 projects for over 260 clients in some 30 countries.

AMEC in oil and gas: AMEC’s oil and gas business is a leading international provider of total life of asset services to customers in upstream, downstream petrochemicals and pipelines. It turned over £1.4 billion in 2003, employs 6,000 people and is focused on seven key regions: Americas; Europe; West Africa; Russia and FSU; Middle East; South East Asia and China.

AMEC’s Oil and Gas business has market-leading positions in front end consultancy services, engineering & design, project management and engineering of complex facilities and asset support services. It is also a pioneer in the development of innovative approaches to project delivery leading to significant cost savings, faster project delivery and greater long-term value for customers.

Contacts:
Nick Welsh
AMEC UK media manager
+44 (0)20 7634 2219

Frank Stokes
external relations manager
AMEC Group Ltd
+44 (0)1789 208477