THE head of a Scottish-based subsidiary of a Middle East producer has predicted the company can make a profit on its newly-acquired North Sea fields even if the oil price falls.
Peter Barker-Homek, chief executive of Taqa, has promised that his company is in Scotland for the long haul and planned to base an oil "centre of excellence" in Aberdeen, with a similar gas operation in the Netherlands.
Taqa, a subsidiary of the A
bu Dhabi national energy company, recently completed a deal with Shell and Exxon Mobil to buy eight of its mature oil and gasfields in the North Sea. The deal covered the Cormorant North and South, Eider, Hudson, Kestrel, Otter, Pelican and Tern fields.
Barker-Homek told The Scotsman: "Within the next 12 months, you'll certainly hear an announcement from Taqa. We will continue to build not only our European practice, but also our Scottish practice. Ideally we'll have £10 billion of assets invested in Europe by the end of 2012."
He said the firm was examining the possibility of building wind turbines on its platforms and was working with the Massachusetts Institute of Technology on "emerging technologies" to help it extract more oil and gas, but also in the renewable sector. "We're hiring through 2012 and will be creating a number of jobs in Aberdeen. We would look to have 400-600 employees in Scotland and then around 800 in the rest of Europe."
He said the price of oil was keenly linked to the question of whether or not the economies of China and India had become de-coupled from that of the United States. "If their (China's and India's] demand continues to grow at the pace that is has over the past two or three years, then I think you're in a world where we could be trading between $120 and $180," Barker-Homek said.
"The $180 figure comes about from any supply disruptions, whether that be unrest in sub- Saharan Africa or a hurricane in the Gulf of Mexico."
But Taqa is confident that, even if oil price falls, so will the cost of services in the industry, keeping its North Sea assets economically viable. "If prices were to correct dramatically, then service costs would come down," Barker-Homek said. "We see the North Sea as being quite economically viable through all of our forecasted scenarios."
Taqa selected Wood Group, the Aberdeen-based energy services company, to act as its operating and maintenance contractor.
"Wood Group will be a very solid partner and are well connected in Aberdeen and Scotland," he said.
