UPDATE 1-Wood Group maintains upbeat outlook on North Sea, US shale demand
* Oil and gas services company says conditions broadly unchanged
* Growth in production services sector offsets weaker engineering (Adds details, comment)
By Ron Bousso
LONDON, May 14 (Reuters) - British energy services company Wood Group on Wednesday maintained its growth outlook for 2014 thanks to strong demand for its services from operators in the North Sea and the fast-expanding U.S. shale sector.
Growth in the production services (PSN) segment was set to offset a weaker engineering sector hit by oil producers' budget tightening since 2013 as earning remained on course to post a modest rise this year, Wood Group said.
"We see the trend and we are not immune when these things happen. This is why we looked at 2014 last year and signaled we didn't think results would be as strong as initially thought," Chief Executive Bob Kieller told Reuters.
"There is a focus on greater capital efficiency and getting more for the money spent so ultimately we can provide services when client spending declines ... Clients are very keen to get good return on assets so we make sure we don't over engineer things."
Producers seeking to squeeze extra drops of oil out of ageing North Sea assets and the booming shale business in the United States were the backbone of the company's operations.
PSN performance was also boosted by the Wyoming-based services firm Elkhorn, which it acquired last November.
"In the North Sea demand remains strong and we are benefiting from significant contract renewals secured in 2013," Wood Group said in an interim management statement ahead of the annual shareholder meeting.
The Aberdeen, Scotland-based company's performance in the engineering and PSN segments were slightly ahead of expectations, it added.
Wood Group shares had risen 0.39 percent by 1440 GMT while the broader oil and gas index was down 0.38 percent.
The oil and gas services sector, which provides engineering, construction and maintenance services for producers, has seen several companies issue profit warnings in recent months as a result of the increasingly challenging environment. Last week, FTSE 100 contractor Petrofac trimmed its 2014 revenue outlook.
In the subsea business, Wood Group said it had been awarded a contract for the initial phase of the subsea and pipeline engineering and project management at Azerbaijan's largest gas field, the Shah Deniz II which is operated by a consortium led by BP.
The company reported pre-tax profit of $413 million on revenue of $7.1 billion for 2013.
Following Wednesday's annual meeting, Wood Group Chairman Allistair Langlands retired and was replaced by Ian Marchant, who has been a non-executive director at Wood Group since 2006. (Reporting by Ron Bousso; Editing by Kate Holton and Toby Chopra)