UPDATE 3-Fugro shares lead oil services sector rally after Boskalis stake buy

(Adds director dealings and company comments, writes through)

By Thomas Escritt

AMSTERDAM, Nov 10 (Reuters) - Shares in Dutch oil servicescompany Fugro NV jumped on Monday as the purchase ofa stake by rival Boskalis fuelled talk of a possiblebid for the troubled company and boosted shares in the industryacross Europe.

Fugro shares were up 36 percent by 1306 GMT, liftingNorwegian rival PGS for example 5 percent as theBoskalis move, announced after European stock markets closed onFriday, sparked talk of a spate of deal-making in a sector whichhas been squeezed by cuts to oil company investments.

Fugro, which is also deploying its undersea survey vesselsin the search for Malaysia Airlines' missing flight MH370, hasbeen hit hard by the falling oil price which has led oil majorsto cut back in areas like exploration. Last month it scrappedits 2014 dividend after its third profit warning of the year.

Among other Norwegian oil industry survey firms, some ofFugro's top competitors, TGS Nopec was up 3.3 pct andPolarcus leaped 18.3 percent.

The stake purchase came days after Fugro Chief ExecutivePaul van Riel and Finance Director Paul Verhagen boughtthousands of shares, leaving them with substantial profits. VanRiel bought 12,000 shares at 10.19 euros and Verhagen bought6,000 at 10.03.

Asked whether the company had been aware of the impendingBoskalis stakebuilding, Fugro corporate strategy director RobLuijnenburg said: "Absolutely not. We were surprised and (theshare purchase) was unexpected and unsolicited."

While Boskalis denied it was planning a takeover, thesurprise purchase of the 14.8 percent stake led many to expect abid. "The genie is out of the bottle," said Rabobank analystMichel Aupers in a note. "Fugro management is no longer incharge of its own destiny and the company is in play."

Fugro said Boskalis's stake purchase was "unsolicited andunexpected" but it was open to cooperation on specific projects.

"Fugro is interested to discuss a partnership with respectto its subsea division with ... parties including Boskalis," itsaid. Boskalis said it wanted to discuss cooperation with Fugrobut had no intention of making an offer.

The falling oil price particularly affects Fugro, since itspecialises in difficult-to-reach oil fields deep beneath theocean that are worth exploiting only when the oil price is high.

Boskalis has been involved in projects including removingthe wreck of the stricken cruise liner Costa Concordia from thecoast of an Italian island and dredging the Suez Canal.

Other oil services and engineering companies up afterBoskalis's move included SBM Offshore, Subsea 7, John Wood Group and Tecnicas Reunidas, all up between 2 and 5 percent. (Additional reporting by Balazs Koranyi in Oslo; Editing byAnthony Deutsch and David Holmes)