Scottish oil field services company Wood Group said naming board member Robin Watson as its new chief executive officer is part of a natural evolution.

Watson, a board member since 2013, was named to replace retiring Bob Keiller as the CEO. The company said Watson was identified as a clear choice to drive the company forward.

"His appointment represents a natural evolution in the group's leadership," the company said in a statement.

Wood Group reported a 7.4 percent decline to $226 million in core profits during the first half of the year and a sharp decline from its production services, which it said was a reflection of lower activity in the North Sea and in U.S. shale basins.

In August, the company said it was addressing the weakened oil sector by cutting an estimated 5,000 jobs, or roughly 12 percent of its workforce.

Industry body Oil & Gas U.K. said in its annual report new spending in exploration and production is expected to fall by up to $6 billion per year over the next three years for its lowest levels since the 1970s.

Watson said he'd take the company forward as it looks to meet the needs of its clients while at the same time finding cost-efficient solutions to the challenging business climate.

"I am delighted and honored to have the opportunity to lead Wood Group in the next stage of its development," he said in a statement.