TAQA look at the future
 Over the past two years TAQA Bratani has proved beyond doubt it is a “can do” company, an attitude its boss believes Aberdeen needs to adopt to safeguard its future prosperity.
Leo Koot, who has built the company from zero to a major player in the North Sea since 2008, warns that without that change in culture Aberdeen could be a ghost town in 20 years.
He also believes Aberdeen, in spite of its importance, falls far short of other leading European cities in what its city centre offers.
The TAQA Bratani managing director suggests better air links could provide an economic boost to the area because it would be easier to bring those with funds to the North-east to persuade them to invest.
Few had heard of the embryonic company, and not all those could spell it, when a small team began work for TAQA in three attic rooms in the city’s West End.
Now the subsidiary of the Abu Dhabi National Energy Company has a payroll of 1200 staff and contractors and occupies three new office blocks at Westhill.
As other companies have looked beyond the North Sea and internationalisation for their future success, Koot and TAQA have shown how successful a province the North Sea can remain for many years to come.
This year alone Taqa has a capital budget of $430 million in the province and there is no sign of any slowing down.
It acquired the Central North Sea Brae assets from Talisman before buying a 100% interest in the Northern North Sea Tern, Kestrel, Eider, Cormorant and Pelican fields from Shell.
“At the end of 2009 we acquired the exploration licences for Tern North from Shell and ExxonMobil and when we drilled an exploration well this year we found approximately 30 billion barrels of oil in the Falcon field which was the first oil discovery for TAQA in the North Sea.
“The team is working to target first oil in 2011 so within two years we have discovered a field and brought it on stream which is something the UK sector hasn’t seen for a long time.”
“The other significant growth story is the acquisition of Total’s stake in the Otter field. Otter is a subsea satellite tied back to Eider which is one of the platforms we operate which adds production to our existing infrastructure and extends the field life of Eider.
“Because we are operating Eider the field is obviously more valuable in our hands and we can generate more value than any other operator.
“If you look at our total North Sea growth picture we need to be adding reserves. At the moment we are producing close to 40,000 barrels a day and our focus for the next five years is on expanding our reserve base. “
Koot, a 6ft 7in Dutchman who feels a serious responsibility to ensure that no vital energy resources are left unexploited as they often are by the oil majors, outlines three elements for the continuing growth of TAQA.
It will come from within the company’s existing infrastructure and he points out that when their fields were discovered three decades ago they contained almost 3.5 billion barrels of oil equivalent. TAQA’s predecessors have recovered less than half of that and even a 1% improvement is 35 million barrels which he hopes will be achieved, and more, by employing innovative techniques such as smart drilling technology, which adapts to the conditions around it and enhanced recovery.
The second element is exploration “But not with a big ‘E’ – yet,“ he says.
Not for them the big risk-big reward greenfield exploration instead it will take place close to their existing infrastructure, just like the Falcon discovery.
The discoveries may be smaller but they are still very profitable because the development costs are significantly lower.
The third element is acquisition and that too is likely to involve strategic acquisitions close to existing infrastructure.
“It is very much infrastructure led growth to the point we are ready to take on an extra hub,” he said.
“Now we have Brae and the Northern North Sea and if and when the opportunity arises we would be very interested to look at a third hub if the conditions were right.”
Koot praises the government’s support for the industry which he says has close links through Oil & Gas UK and says it was particularly important for Falcon where the small field allowance tax break was a major factor in making it viable.
Aberdeen and Aberdeenshire have also supported the company but there have been some problems.
“We wanted a location which allows easy travel for our employees who live in the countryside and those living in Aberdeen and Westhill works for virtually everyone.
“The main challenge has been that planning permission was only given to cater for one third of the employees housed in the office.
It doesn’t work for us. It is easier for the people living in Aberdeen who can catch buses out here, but there is no infrastructure for those living rurally. Their only means of transport into the office is by car and as a result this one third rule is fundamentally flawed.”
The company has a comprehensive green plan to reduce the carbon footprint of its employees travelling to work which it hopes will be a factor in finally persuading officials to recommend the approval of further spaces to resolve the problem.
Koot, a keen fisherman, is a country dweller with his partner Els and their year-old daughter Joy Anna, and he is able to indulge his passion in the River Dee which meanders past his garden.
However when visitors come from around the world to the North-east he leads them away from the city.
“I think Union Street is not at all representative of what Aberdeen City and Shire has to offer,” he says. “Any other mature city in Europe the size or importance of Aberdeen has a beautiful pedestrianised inner city with no buses going through the centre, proper parking spaces and good quality shops, not mobile phone outlets. It is embarrassing. I don’t take important people from Abu Dhabi into Aberdeen city. I take them out into the countryside. The new Union Square is a step in the right direction but Union Street needs to be opened up. I think Sir Ian Wood’s attempts to kick-start the process are admirable and I would recommend that the city quickly gets a move on.
“The people of Aberdeen are pretty wealthy but their money is not spent locally.
“TAQA has a ‘can do’ attitude and that is what is needed here. They must get away from the culture of debate to a culture of ‘let’s go and fix it.’
“Aberdeen needs to take action now. You don’t want to see Aberdeen in 20 years time as a ghost town. Everyone needs to pull together.”
“Scotland is rich in good entrepreneurs and we really need to create an environment in which these entrepreneurs are stimulated and motivated to continue to develop new technology for the energy sector and make sure these people stay in Aberdeen.
“The development of technology, the making of the first prototypes and then the manufacturing is what you want to keep in Scotland because that is where the value is generated.
“There is new energy – wind, waves, light - and Aberdeen has a lot of wind and a lot of waves so it points very clearly in the direction it should be focussing. It needs clear leadership and a combined university/government/industry forum with real teeth and a real budget and ACSEF is a good platform from which to build.”
He would also like to see an improvement in the air links.
“I travel a lot and from Aberdeen it is always an extra step. A direct Aberdeen link to the US, either New York or Houston, would help greatly as would a direct link going in the other direction, not necessarily Abu Dhabi, Dubai is fine.
“A direct flight to that area would help our business tremendously. It would make travel for the people managing our sovereign wealth funds easier so they would be more available to the business here.
“We would be able to entertain them and show them what we are doing, rather than over a video call or a telephone call and that might ultimately lead to more investment.”
|
