are often owned by the majors. One such company is TAQA Bratani,
the UK offshoot of the Abu Dhabi National Energy Company PSJC (TAQA). Established in 2006, TAQA Bratani has expanded rapidly in the North Sea region, and currently provides work for around 350 staff and 800 contractors. In December 2008 the company made its first major move into the North Sea, purchasing 100 per cent interest and operatorship in the Tern, Kestrel, Eider, North Cormorant, South Cormorant and Pelican fields, as well as a combined 26.73 per cent interest in the Dana-operated Hudson field, together with a 16 per cent interest in the Brent System (which it now operates) and a 24 per cent interest in the Sullom Voe Terminal. Parent company TAQA posted a £173m profit in 2010, while revenues rose 27 per cent to £3.64bn. Leo Koot, managing director of TAQA Bratani, said that success would allow North Sea production and exploration to accelerate. Significant investment is required to ensure
that the higher cost of extracting hard-to- reach oil is profitable. Seventy-five per cent owned by the Abu Dhabi state, with the remaining twenty-five per cent floated on the Abu Dhabi stock exchange, TAQA Bratani boasts the kind of capitalisation needed to take on high-cost projects in the region. “We have got considerable firepower,” says Koot. “If we take on a project, we can take it on with the knowledge that we can make a difference and we can do the necessary investment.” Te company has embarked on a £250m, four- year programme of investment to improve the safety on and efficiency of its inherited platforms, with the aim of extending their life by fifteen years. Koot, who describes the improvements as “well along the track”, says they were needed. “At the time of acquisition, these fields
Te region, however, is far from barren
– billions of barrels of oil remain locked away under UK waters – and a new model is emerging in the UKCS. Investment has returned – in February, Oil and Gas UK predicted £8bn would be injected into the industry this year, compared to just under £5bn in 2009. In place of the majors, smaller, more nimble companies are using the opportunity provided by high-tech drilling which allows more oil to be recovered from existing wells and makes smaller fields cheaper to develop. In certain regards, government has moved to encourage the new model’s progress. Steps have been taken to facilitate exploration, and larger companies are no longer able to sit on unexploited discoveries, depriving others of access. Smaller operators have been guaranteed greater access to pipelines, which
were unloved by their owners,” he said. “Te maintenance programmes had been reduced to a minimum to minimise costs, effectively, before abandoning and decommissioning the field. Tat was the plan: to produce the last remaining oil at the lowest possible (cost) and then stop production and remove the facilities and infrastructure.” Upon TAQA Bratani’s takeover, the
facilities were producing around 22,000 barrels of oil per day – today the figure is 45,000. Koot says achieving such a marked improvement in just two years has been “quite a turnaround”. “Particularly for the North Sea with all the regulation and permitting requirements … it’s pretty remarkable. So we’ve shown we can operate mature assets, we can increase production, we’ve shown we can do exploration and bring exploration to production pretty quickly, and
now we’re becoming increasingly bold in our exploration by going further afield in relation to our existing infrastructure.” Koot says the TAQA Bratani model is built
on flexibility and placing trust in the skills of staff rather than an emphasis on method. “We operate very differently. Whereas the majors have everything locked down in process and policy procedures, we very much rely on the expertise of individuals. So what we make sure is we have the right people in the company, the right expertise involved in the company, and we allow these people to do what they do best, which is develop new fields and optimise production from older, mature fields. So there is a different operating philosophy to the majors. If you then add that philosophy with access to capital, it becomes a very powerful, profitable business.” He added: “We can apply technologies much more efficiently and quicker, because of shorter decision lines. If there is new technology available which has been proven elsewhere we don’t need to reinvent the wheel and give it a TAQA brand.
“Many big companies and the UK Government have a similar attitude to
the North Sea. They regard it as a cash cow”
We can take the technology and apply it. So I don’t see it so much as new technology, but I think it’s a new way of applying technology, and a smarter way.” It’s a model that has worked elsewhere.
Across the UKCS, mature fields have been revived in recent years. In 2003, BP sold the Forties field (at around five billion barrels, the largest in the North Sea) to US firm Apache for $1.3bn. At the time, the symbolism of the company synonymous with North Sea oil abandoning the region’s largest field was seen as emblematic of the industry’s decline – the UK’s ‘peak oil’ moment. Adds Bamford: “When BP sold (Forties) … there was a feeling that they were selling off the company silver. But what happened was that Apache took it over, boosted reserves, boosted production, adding many years to the life of the field and got the percentage recovery up to around 70 per cent. So technically it’s not difficult. Te difficulty is it’s a bit expensive, and companies need help to do it and you probably need to think about whether you’ve got the right companies to do it, whether the big majors are truly less interested in the North Sea.” Eight years on, Apache’s investment of
13 June 2011 Holyrood 33
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