SCOTLAND on Sunday: Venture and Perenco head oil sale queue

TERRY MURDEN
BUSINESS AND CITY EDITOR
Sun 17 Jun 2007

VENTURE Production and French company Perenco are believed to be heading a list of independents eager to get hold of the mature fields put up for sale last week by Shell and ExxonMobil.

The assets are expected to fetch more than $600m and are the latest in a series of sales by the major oil companies as they withdraw from the region to seek bigger exploration opportunities elsewhere.

One oil expert said there would be a lot of interest from a growing number of smaller companies now flourishing in the North Sea and specialising in extracting oil from wells deemed too small for the big companies.

Apart from Aberdeen-based Venture and fast-growing Perenco, which is becoming a big player in the region, others likely to be interested include northeast firm Dana Petroleum, the Middle East-controlled Petrofac and Lundin of Norway. First Oil, another Aberdeen company which already partners with Venture and Dana, is also operating in mature fields.

“I would expect a lot of interest as people will see a lot of upside from under-invested properties,” said Jim Hannon, partner in oil consultancy Hannon Westwood.

Mike Wagstaff, chief executive of Venture, has indicated that he wants to build through acquisition after declaring an intention to double the size of the business by the end of next year. Last year Venture acquired six firms, including Dutch firm CH4 for £153m in cash and shares, by far its biggest. That deal increased the size of the business by about 20%.

It is the 14th-largest operator in the North Sea and the fourth-largest independent.

Shell and Esso Exploration and Production, an ExxonMobil subsidiary, said they would offload their equity interests in a number of Northern North Sea assets, which include operated interests in Cormorant Alpha, Cormorant North, Tern, Eider, Kestrel and Pelican.

The fields produce an estimated 25,000 barrels a day and with investment by new owners potentially raising that to 35,000 barrels at current prices they would yield an extra $700,000 a day.

With more than 100 small firms moving into the region in the past three years, the North Sea is declining but not yet dying, according to experts who believe the level of interest in acquiring mature fields will counter disappointment at Shell and ExxonMobil’s decision to scale down and to cancel plans for a £25m subsea centre.

Critics claimed that high taxes or the threat of independence were behind the move, but oil industry insiders said the decision followed an ongoing shift from the majors to the smaller firms.

Hannon said the Shell decision was “very positive news and exactly what we needed”.

BP sold the massive Forties field in 2003 and Shell offloaded its Auk/Fulmar interests late last year.

Tom Botts, executive vice-president, Shell Exploration and Production in Europe, said in his statement last week that the latest assets put up for sale “are not core to our future business and do not compete successfully for investment capital with other opportunities”.

COMMENT

John Donovan, Colchester, UK / 7:36am 17 Jun 2007 We are asked to believe that Shell and Exxon are still committed to the North Sea. That pledge comes under the heading of BS.

These ruthless oil giants are committed only to generating massive profits from high oil prices to generate obscene rewards for its fat cat executives. Lee Raymond, the last CEO of Exxon Mobil retired with a financial package worth $400 million. Sir Philip Watts, the disgraced former Group Chairman of Royal Dutch Shell received a severance package worth $20 million even though forced to resign as a consequence of the Shell reserves fraud. Such individuals have no interest in the consequences of their decisions to hard-working people at the coal face of the oil industry.

With regard to Shell, it’s suspicious the decision to scale down in the North Sea and abandon grandiose plans in Aberdeen was taken now, rather that when it was possible Scottish authorities might decide on a Public Inquiry into the Brent Bravo safety scandal courageously exposed by former Royal Dutch Shell Group Auditor, Bill Campbell.

Shell workers died because Shell Expro senior management ignored warnings made by Campbell after an inquiry led by him revealed a murderous “Touch F*** All” policy which put profits before safety. He even discovered a policy of falsification of safety records.

Mr Campbell has repeatedly stated that it is only a matter of time before another tragedy occurs as a result of Shell management homicidal negligence, perhaps next time on a calamitous scale. Maybe Shell has decided to begin its departure from the scene of crime.

For information about Shell’s atrocious health and safety track record, go to the Wikipedia article:

Royal Dutch Shell safety concerns

http://en.wikipedia.org/wiki/Royal_Dutch_Shell_safety_con…

http://business.scotsman.com/index.cfm?id=945562007

This website and sisters royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.