Scots oil firm confirms merger and move to London

One of Scotland's most successful home-grown oil exploration companies is being merged and its headquarters moved from Edinburgh to London.

Capricorn Energy, formerly known as Cairn Energy, is becoming part of Tullow Oil, with a focus on African oil and gas drilling.

Cairn was founded in 1981 by ex-rugby international Sir Bill Gammell.

It was successful in finding a large oilfield in India but not with controversial drilling near Greenland.

It has since withdrawn from both countries.

An agreed merger with Tullow Oil will see the joint company, listed on the London Stock Exchange, focus on their current assets in Africa and new opportunities for drilling on the continent.

Tullow has operations in Gabon, Ivory Coast and Kenya.

Capricorn was successful drilling for gas in Senegal and sold its stake there, with its focus now on Mauritania and onshore in Egypt.

Its portfolio also includes prospects in the UK North Sea, Israel and Mexico.

• Cairn Energy gets right to seize Indian assets in tax row

The combined company, through an all share deal, is being valued at £657m. It will have production of an estimated 100,000 barrels of oil per day, and identified reserves of 343 million barrels, mostly of oil.

Both the chairman and chief executive roles are being taken by those currently in Tullow Oil. The chief financial officer will be from Capricorn.

Capricorn's chief executive, Simon Thomson, steps down after 11 years, and has a temporary role of steering the merger process, which is expected to cost around £40m.

More deals

Meanwhile Wood, the Scottish energy engineering giant, has announced the sale of a division that advises clients on engineering of buildings and infrastructure.

The Built Environment consultancy is being sold for £1.5bn. It has 100 offices, most of them in the US, and employs around 5,500 staff.

This reduces Wood's debt and allows the Aberdeen-based firm to focus more on sustainable energy and the transition from oil and gas, having previously retreated from being a leading global supplier of oilfield services.

In a further major deal involving Scottish energy sector firms, KCA Deutag announced it was buying the onshore drilling division of Saipem

The Aberdeen-based buyer is paying $550m (£440m) while Saipem gains a 10% stake in KCA Deutag.

The Italian engineering company wants to focus on offshore drilling.

The Saipem unit operates in 13 countries with about 4000 people and with 83 land rigs. The Scottish firm has 110 rigs and more than 8,000 people operating in 20 countries.

KCA Deutag last year had revenue of $1.2bn (£960m) and pre-tax earnings of $237m (£190) while Saipem onshore drilling generated revenue of $410m (£330m), much of that from the Middle East and Latin America.