FTSE 250-listed Enquest cut its last tie to co-founding parent Petrofac when it took over full legal guardianship of its offshore projects last month.
Speaking to Energy, David Heslop, MD of Aberdeen-based Enquest’s UK business, said: “There’s an historical umbilical cord that has not clearly been cut in the minds of people outside the company.”
EnQuest was formed in 2010 out of an agreement between Petrofac and Lundin Petroleum to de-merge and then integrate their UK North Sea assets portfolios.
Enquest, which has a small London HQ, is now duty holder of its development projects and the three producing hubs that form the basis of its portfolio.
Ultimate responsibility over installations and the health and safety activities of all the companies and personnel present now lie with the firm.
Heslop said: “It’s a very important but not very visible step in the growth and development of our company. Petrofac has been our duty holder and a lot of the key contracts offshore have been held by Petrofac but now they’ve all migrated over to us.”
He added that, apart from the fact that Petrofac remained its offshore operations and maintenance service provider, there is no other connection with the company.
“That’s a huge milestone,” said Heslop. “It was nothing to do with Petrofac’s performance; this is about growing up and getting top to bottom alignment through the company and having the expertise to look at another asset and say ‘we could manage that’.
“Enquest was formed as a mature asset management company and a development company. They are our core strength and skills.”
Last year, EnQuest extended the life of the Thistle field, about 440m (275miles) northeast of Aberdeen, with £169million of investment, so helping to safeguard 500 jobs.
Heslop believes this is a prime example of how the company has been able to recover more oil from mature assets through a combination of innovative ways of working and technical expertise.
But he is not convinced that every North Sea field is run to the best benefit of the country. To get the best out of them means ensuring they are in the right hands.
“It’s a matter of record that every field that’s moved from long-term operators to the hands of a smaller company has had a significant ramp up in investment after that transition has happened,” said Heslop.
He believes high oil prices have created an environment where some firms have become content to reap short-term cash-flow at the expense of long-term investment in assets.
A consequence is that consolidation in the industry is slower than Heslop thinks it should be, as firms that otherwise might be unable to seek out income from maturing fields have been able to hold on to assets.
He is obviously excited though about the opportunities that lie ahead for the company, which currently ranks as the UK’s largest independent.
The bulk of Enquest’s portfolio is on the UK Continental Shelf, with two major North Sea development projects underway at Alma-Galia and Kraken.
For Heslop, the next really big milestone is getting Alma Galia onstream. The £757million project, which is the third development of the asset, has reserves of 34million barrels oil equivalent and will be exploited via an upgraded production ship.
“We need to be sailing that vessel out in the third or fourth quarter of this year and we’re planning to get onstream by the end of the year,” said Heslop.
EnQuest, also intends to sanction development of its heavy crude Kraken asset this year.
“We got into Kraken through one-on-one negotiations with other companies. It is intended that we have the field development plan within the next three months, with sanctioning of the project coming soon after.”
He added: “Some people describe Kraken as a heavy oil field but in many ways it’s a conventional development. It’s heavy oil that flows. The plan is for an FPSO with subsea wells tied back.”
Proved and probable reserves at the field are estimated at 167million barrels of oil according to Nautical Petroleum, which has a 25% stake in Kraken.
Heslop said the firm was at a sensitive time while it explored farming out a portion of the project and was unable to make any further comment.
Regarding the skills gap issue, Enquest’s MD, who was previously at Talisman Energy as vice-president of wells, said the firm was faring well on that front.
“We haven’t had any problems attracting new talent,” he added.
“My worry is that there’s a honeymoon period there, a new company, the new kid on the block.
“People are the scarcest and most challenging asset to attract and retain at the moment.”
He added the nub of solving that sort of problem is by achieving the right corporate culture.
“What I’m concerned about is what it feels like to work at Enquest,” said Heslop.
“One of the most important things is to create the right culture in this organisation.
“Our CEO, Amjad Bseisu is a very strong, very involved leader.
“He’s very much a people person and that comes across; he thinks nothing of sending an e-mail to a drilling supervisor to ask why something happened the way it did before.
“The top of the organisation is not some London-based black box that’s invisible.
“It’s very real.”
The company’s £145million bond issue earlier this year highlighted a creative response to challenges.
Bseisu was the driving force behind what was thought to be the first retail bond issue by an oil and gas explorer.
“Amjad is the most networked person I’ve ever met, he has a tremendously strong contact base.”
Looking forward, the firm has taken its first steps out of the UK North Sea, with the decision last year to take over a large office in Norway.
“There’s a statement of ambition there which is quite clear,” said Heslop.
“We’ve (also) got some exploration acreage in Malaysia and we’re going to be drilling some wells this year with the operator, Lundin Petroleum.”
EnQuest reported solid full-year results in 2012 that were by and large in line with market expectations, with operational cash flow of £393million standing out and ahead of consensus.
With a 12-well drilling plan for 2013 and a firm declaration that the firm is actively looking for stakes in more North Sea fields, it will be a busy year for Enquest’s MD and his people.
Questions and answers
Age: 58 years
Education: BSc Hon Aeronautical Engineering, University of Manchester, 1975-1978; MSc Petroleum Engineering, Imperial College, London, 1985-1986.
The 2/3 main roles in your career and dates:
Being a Dad. 1988 to date . . .
Field engineer in Schlumberger, 1979-1985, learning about the industry at the sharp end.
Reservoir engineer in Mobil, 1986-1990, expanding my knowledge and becoming a businessman.
Asset area VP in Talisman, 2006-2008.
What has been the hardest decision you have made in business? I’ve been very lucky to work for three great companies in some of their golden years and it was really hard deciding to leave each of them.
Who do you admire in business or who has inspired you most in your career? Andrew Swiger, a senior VP at Exxon Mobil, stands out for his ability to combine the very highest level of intellect and capability with a genuine concern and connection with individuals at every level in an organisation. I also had a colleague in Talisman who epitomises the gems you find in most companies – not particularly senior, but extremely hard working and committed
What do you regard as being your greatest success to date? Clinging on to an oil industry career when the oil price dipped below $9/barrel in 1986 by starting up a company with a couple of fellow MSc graduates to provide junior consultants.
Where is your favourite holiday destination? The Algarve for golf; London, Paris or Venice for a city break; anywhere in Italy for food; and anywhere very remote to really switch off and relax.
What is your favourite gadget? My Lamy Vista fountain pen. It writes beautifully, looks cool and only costs £12.
If you weren’t in the job you have, what would you like to do? If you give me the talent to go with it I’d be a singer with the voice of Otis Redding, or a trumpet player with the skill of Louis Armstrong or Chuck Mangione, or a stand-up comedian.
Recommended for you
