The negative effects of the Oil & Gas downturn continue to be evident, but more positively, we are also experiencing the benefits of becoming much more efficient in managing and running all aspects of our businesses.
Economic recovery efforts have gained momentum. Average lifting costs per barrel of oil have dropped amongst the Exploration & Production (E&P) Operators and signs of greater collaboration are appearing across the industry. Crucially, in the E&P sector, we also see the need for efficiencies, higher productivity of resources, and the application of innovation and technology in what will be the next all improved chapter of our industry.
Leaner businesses are now more prepared to maximise opportunities in a lower for longer but crucially, more stable oil market. Furthermore, following a period of deal inertia we are seeing the return of investment confidence and much more closely aligned buyer and seller expectations. With Suncor’s investment into Rosebank, Neptune’s deal with ENGIE, Siccar Point acquiring OMV’s UK portfolio, EnQuest acquiring interests in Magnus and the Sullom Voe Terminal, Chrysaor’s acquisition of assets from Shell, INEOS buying DONG and Total acquiring Maersk Oil, to name but a few, we could be forgiven for thinking that we are in the midst of a significant phase of consolidation.
An evident trend emerging from recent E&P deal activity is a change in ownership profiles. Private equity and fund management are now much more prevalent in the sector, which according to their business models would suggest confidence in the ability to create value in this market.
It may be true that we will never see a return to the boom days of $100 oil. However, the reality is that through necessary change, adaptation and creation of opportunities, what is emerging is an improved industry and a more efficient business environment that will present exciting challenges and huge rewards for many years to come.
Simultaneously, AAB has experienced a period of substantial growth in the North Sea and international E&P sector. Organisations continue to review their own cost models and constructively challenge Partners in joint ventures, and so demand has been particularly high for our joint venture and contract audit services.
Improving efficiency, achieving cost savings and the change in E&P ownership profiles have also brought new opportunities, where our target operating model provides focus and structure to achieving corporate objectives.
AAB’s services range from joint venture and contract audits to outsourced accounting, global payroll and mobility services, consulting and tax structuring in addition to private client and wealth management advice to individuals.
The firm now works with over 50 E&P clients in more than 25 countries and has a team of more than 35 E&P experts across their suite of specialist services.
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