Granite City's black goldrush indicates bright future to come

BUOYANT corporate activity in the oil and gas sector has gold-plated Aberdeen's reputation as the place to be for professional advisers.

A healthy pipeline of acquisitions, disposals, buy-outs, buy-ins, initial public offerings and strategic alliances has seen an army of lawyers, accountants, financiers and management consultants focus their attention on the city.

Law firm McGrigors significantly boosted its clout in Aberdeen earlier in the year by securing the widely- respected oil and gas team of Ledingham Chalmers, including 12 partners and 42 staff.

McGrigors, which also advised the PSN management on its $280 million (£150.8m) MBO from Halliburton, subsequently announced further energy deals, including advising shareholders in AIM-listed Equator Exploration Limited (EEL) on a $68m (£36.6m) financing facility to fund the continued development of the company's Balabari oil field in Nigeria. Bob Ruddiman, who leads McGrigors' oil and gas team, predicted the future was bright for the Granite City.

"It's the oil capital of Europe and we have a massive industry on our doorstep, both in terms of UK oil and gas production, but we're also increasingly becoming a genuine hub for oil service companies running activities around the globe," he says. "People domiciled in Aberdeen are working everywhere. PSN is a good example. It employs 7,000 people worldwide but they're run out of Aberdeen. We're seeing more and more of that. There's a lot of talk about how long the North Sea will run, but it will be a lot longer than people think it will." Instability elsewhere in the world helps consolidate Aberdeen's credentials, he added.

Notwithstanding the Chancellor's recent changes in the North Sea oil taxation regime, the city represented a stable fiscal and political environment where businesses could continue to be based for decades to come. Major recent developments include announcements from Shell and Chevron that they plan to open research and technology centres in Aberdeen.

Campbell Dallas, one of Scotland's biggest independent accountancy firms, established its first presence in Aberdeen in July by acquiring local firm MacPherson & Co, which was set up in 1982 and has ten staff. The move will position Campbell Dallas to increase its share of oil and gas work already coming into Scotland from Houston, Texas, through the international UHY accountancy network, which the Glasgow-based firm joined at the end of last year.

Bob Dallas, managing partner, said Campbell Dallas had been seeking a suitable opportunity in Aberdeen for some time and added: " The oil and gas market in Aberdeen has become more prominent since our affiliation with UHY International in December last year, when we stated that we would undertake to have an Aberdeen office within three years. Referral work from UHY is flowing and we are confident of building on this in Aberdeen.

"We are satisfied that there is a vibrant economy in Aberdeen and this merger provides us the opportunity to meet our aspirations to grow a substantial practice in the north-east."

Legal heavyweight Shepherd and Wedderburn has also beefed-up its growing Aberdeen office with the appointment of corporate finance partner Helen Dickson, a former Ledingham Chalmers partner experienced in debt fundings, equity investments and restructuring transactions, as well as MBOs, acquisitions and disposals, particularly in the oil and gas sector.

Shepherd and Wedderburn chief executive Patrick Andrews said: "Helen's appointment reinforces our plans to grow both our oil and gas practice and will help us to build on the reputation we have already established in the Aberdeen market." The firm's clients include oil companies seeking legal advice on entering politically sensitive markets, such as Chad in West Africa.

Law firm Stronachs may be a minnow compared to some of its competitors, but in the oil and gas sector it punches above its weight. With investors keen to get their hands on North Sea assets, the oil and gas team has been flooded with work. With one of the strongest energy teams in the country, Stronachs advises on deals in places as far flung as Trinidad.

The oil and gas team, comprising five partners and six solicitors, has completed two transactions worth more than £150 million this year.

Their biggest deal was advising Venture Production on its acquisition of CH4 from private equity firm 3i. The purchase boosted Venture's market value to more than £1 billion.

David Skeach, managing partner at Stronachs, said: "The transaction was substantial, involving cross-border issues in Holland and completed in an unusually short time frame - seven working days from Venture being selected as the preferred bidder to completion."