Today, Taqa starts moving into its new UK headquarters at Aberdeen’s “Surf City”, a satellite town more correctly known as Westhill.
Spearheading that move is Leo Koot, UK managing director, whose brief it is to build a major North Sea presence, working in harness with colleague and Europe MD Paul van Gelder.
Backed by Middle East sovereign wealth, Taqa means business here in the North Sea. It is already clear that there will be no pussyfooting about. Koot and van Gelder are supported by Abu Dhabi-based group CEO Peter Barker-Homek.
Strategic acquisitions have already been made and more are in the pipeline, given that Taqa’s top team is in negotiations variously for assets and, potentially, buyouts of smaller E&P players with decent portfolios but which are cash-strapped.
The company’s formal entry into the UK was through the acquisition of Talisman Energy’s interest in the Brae fields complex, a $550million deal that was completed in January, 2008.
Given that Taqa is bent on building its position in such key pieces of North Sea infrastructure, it would come as no surprise if the company took out various minority interests – Centrica and ENI, for example? And might BP be about ready to divest its sizeable holding?
Explaining why the North Sea fitted, van Gelder told Energy it had a major strategic role to play in building not just politically secure production, but also building a meaningful in-house capability. He added that North America fitted for the same set of reasons.
Indeed, the company has already established the foundations of portfolios in The Netherlands, then UK and, most recently, Canada.
“The risk/growth appetite for the Abu Dhabi government and the board of Taqa is at the low to medium risk level. That means selecting somewhere where we can grow an organisation and bring in the right resources and skills and technical competence, and also really learn how to be an operator,” said van Gelder.
And it’s not just about staying within the upstream bracket, as midstream and downstream are squarely in the group’s sights.
“This is the model that we want to grow in the UK and Netherlands. Indeed, our first acquisition was BP Netherlands Energy because there was on and offshore production, also gas storage … all of the elements of upstream with midstream.
“Next was the Brae assets deal with Talisman; the first adventurous step into the Northern North Sea, where the company wants to become involved with more complex infrastructure.”
Van Gelder is very clear that the North Sea is the seedbed for much bigger ambitions, but that Taqa is bent on becoming a big player in north-west Europe. The company is climbing that ladder fast and, when a package deal with Shell involving the Tern, Eider and North Cormorant assets is completed shortly, Taqa will be ranked 15th in the UK producers’ table.
“But this not just about assets in the ground … it is about acquiring people that go with it, as this is about building core competences in-house,” he said.
“With the BP deal we got the people; Talisman, we didn’t get the people, though a number joined the Taqa team, and in Canada, all three acquisitions have come with people.
“But in the UK, we’re relying on Wood Group initially to be our duty-holder. By the end of the year (2008), we’ll have about 90 Taqa staff, 100 with Wood Group and about 50 subsurface contractors.
“That is purely to cope with what we’ve got. Our long- term vision is, over the next nine to 18 months, to replace some of the core skills currently filled by Wood Group and others. By the end of 2009, the Taqa personnel total in Aberdeen should be around 150.
“In total, the European Taqa staff count will reach around 350 by the end of 2009. Compare that with North America, where we have 450 Taqa staff at this time. But they have almost 100,000bpd oil equivalent of production and our ambition is for Europe to grow to 80,000-100,000 by 2010-12. Current output (between the two) is 122,000 boepd.”
Van Gelder added that the Europe target is at least 50,000bpd by 2010, which means adding a further 30,000bpd by then. And Taqa wanted to be firmly in the driving seat of the business, not by proxy through a main contractor.
“This is not about being a doorplate with a group of managers; Taqa wants all core competences in-house, including duty-holdership. This is quite different to, for example, Venture Production. The liabilities land with the operator anyway if there’s real trouble.
“In addition, we needed to develop our own operational expertise so we can export that to other regions of the world.”
