FTSE 100 oil firm Petrofac has called in Finsbury to oversee the flotation of a combined North Sea Oil venture with Swedish group Lundin Petroleum.

Petrofac has pledged to de-merge its oil production business and combine it with Lundin's assets in the UK.

The new firm, EnQuest, will instantly become a top ten UK oil company by value after its London Stock Exchange IPO, which could raise £1bn.

Finsbury won a three-way shoot-out for the account, in a process led by Petrofac's head of corporate communications Hazel Meldrum.

The brief is specifically to support the firm's forthcoming float, but is expected to morph into a retained relationship once the firm successfully lists. The account will be led by Finsbury partner Andrew Mitchell and associate partner Conor McClafferty.

A successful IPO will put EnQuest into the FTSE 250 and it will look to grow, under the leadership of Amjad Bseisu, the former head of Petrofac's energy developments business, by acquiring and operating production capabilities from rivals in the North Sea.

Petrofac replaced Bell Pottinger Corporate and Financial (now Pelham Bell Pottinger) with Tulchan Communications as its retained financial PR adviser. It is understood that Tulchan was not part of the review for EnQuest, as Petrofac wanted the two accounts to be managed separately.

Investor roadshows are likely to take place over the coming weeks, but a successful float is by no means assured. One financial PR boss noted that helping to float a successful IPO was becoming 'increasingly tough' and that City agencies were having to look carefully at their 2010 budgets as the IPO and M&A market optimism of January has begun to ebb away.

Early February saw three of 2010's potentially highest-profile listings scale back their ambitions as Tulchan Communications-advised Merlin Entertainments, Brunswick-advised New Look, and Travelport, which was using Finsbury, all pulled back owing to tough market conditions.

Finsbury picked up another listing brief last week, winning a mandate to support the flotation of Canadian firm Barrick Gold's African arm.

Barrick Gold, the world's largest precious metals producer, uses Pelham Bell Pottinger for its financial PR, but also wanted to separate the IPO brief from the parent company's retained account.