Velosi Cautious On Long Term As Oil Majors Cut Spending

Quality control company Velosi Ltd. (VELO.LN) Tuesday said new contracts helped it grow revenue despite the economic gloom, but said it is worried the sinking oil price might mean its customers in the oil and gas sector cut back investment.

Velosi, which provides quality assurance services to oil and gas companies, said it won contracts in Norway, Saudi Arabia, Qatar and Italy, with clients including oil majors BP PLC (BP.LN) and Chevron Corp. (CVX).

The company said it has firm orders for 2009. However, it added it is more cautious about the longer term because of global economic uncertainty, and because the decline in the oil price means companies are coming under pressure to slash costs.

Velosi said trading for the year ended Dec. 31, 2008, was in line with expectations. It didn't say what those expectations were, although analysts expect Velosi to report a full-year pretax profit of GBP7.9 million on revenue of GBP86.6 million, according to FactSet.

Company Web site: www.velosi.com

-By Jason Douglas, Dow Jones Newswires; 44-20-7842-9272; [e-mail]