WATCHING THE WORLD SURVIVING AS AN INDEPENDENT

with Roger Vielvoye from London The North Sea looks set to lose another independent operator regardless of whether Lasmo plc is successful in its bid for Ultramar plc, London. Ultramar, with its unwieldy combination of exploration and production assets, downstream operations in California and eastern Canada, and an unloved shipping arm, has been put into play and almost certainly will be swallowed up and dismembered by Lasmo or some other bidder willing to offer a higher price.

Nov. 4, 1991

3 min read

The North Sea looks set to lose another independent operator regardless of whether Lasmo plc is successful in its bid for Ultramar plc, London.

Ultramar, with its unwieldy combination of exploration and production assets, downstream operations in California and eastern Canada, and an unloved shipping arm, has been put into play and almost certainly will be swallowed up and dismembered by Lasmo or some other bidder willing to offer a higher price.

Ironically, as most potential oil and gas projects in the U.K. North Sea become smaller and more complex, the region increasingly is unfolding as a big company play and subject to big company ideas on exploration and development.

ROOM FOR INDEPENDENTS

As Hamilton Bros., Enterprise Oil, and Lasmo have shown, there is still a role for independent operators in the North Sea if they keep the moneymen in London sweet-something Ultramar conspicuously failed to do.

There also is a role for the second rank of smaller independents as partners of big companies with aspirations to grow into an Enterprise or a Lasmo.

Takeovers and mergers, with their painful displacement of competent North Sea personnel, have acted as a spawning ground for embryo independents. Back in 1988, another of Britain's independents, Tricentrol, was acquired by ARCO British, leaving top man John Raitt "with nothing to do but play golf for 3 months."

The delights of nonstop golf soon palled and Raitt, in partnership with David Keith, another respected North Sea explorer, is back in business with a new first generation independent, Seafield Resources.

The two men won the confidence of financial backers and got Seafield accepted as a local entity worth having on successful applications by well established North Sea operators like Amoco and Conoco in the last two offshore licensing rounds.

In addition to its North Sea exploration interests, Seafield has picked up acreage in New Zealand and Italy, both unfashionable, Australia, fast becoming fashionable, and Tunisia, where discoveries are again making the North African producer a target for explorers.

Seafield has acquired gas production as a tax shelter in the U.K. and in the U.S., where favorable movements in the exchange rate have more than offset declines in gas prices.

ACREAGE PORTFOLIO

Raitt's aim is to get a 50-50 balance between U.K. and international interests. A balanced portfolio is essential for Seafield because Raitt believes U.K. operations alone are not capable of sustaining an independent.

To achieve this Seafield will need more acreage outside the North Sea, a task that is made no easier by severe competition in producing and potential producing countries around the world. Raitt says it is impossible to go anywhere without falling over oilmen with checkbooks in their pockets.

Seafield will start drilling next month, hoping to be involved in six to eight wells a year. Raitt is optimistic about the future for the Seafields of this world in the 1990s. He says there always will be room for small oil companies that are fast on their feet with inspirational ideas for exploring untested basins.