THE head of oil independent EnQuest has declared that UK Government measures on tax relief for decommissioning ageing platforms and pipelines will help the company boost its North Sea presence.
Chief executive Amjad Bseisu said the Government's commitment, revealed in this month's Budget, would clear the way for the company to acquire assets that would otherwise be too costly because of decommissioning liabilities.
Chancellor George Osborne said the Government intended to sign contracts with oil and gas companies to guarantee them tax relief on decommissioning.
EnQuest, which employs 1600 staff, specialises in extending the life of mature assets and targeting undeveloped fields, largely in the North Sea.
Mr Bseisu said: "That would be very helpful in terms of getting the assets into the right hands, because a lot of the larger companies aren't willing to spend the capital because there is not the material for them to extend the life of these assets. So I think it is very good.
"Now, instead of putting up the financial guarantees for us and the Government, we'll just put up the financial guarantees for ourselves and the Government will have to put it up for themselves."
Mr Bseisu's comments came as EnQuest announced a 3.8% rise in pre-tax profits to $405.1 million (£268m) for the year to December 21, 2012.
They coincided with news that venture capital firm Energy Ventures had set aside $100m to back North Sea businesses seeking growth capital or buyouts over the next year.
Mr Bseisu said 2012 had been a good year for EnQuest, with production coming in at 22,802 boepd (barrels of oil equivalent per day), above the mid-point guidance of 22,000.
Revenue contracted by 5% to $889.5m (£588m) from $936m (£618) in 2011, with profits after tax up 90.8% to $259.7m (£171m), compared with $136.1m (£90m) the year before.
Mr Bseisu said the after-tax profits figure had been driven by favourable changes in the tax system for smaller operators, and by $362m (£239m) generated by farming out 35% of its interest in the Alma/Galia development to the Kuwait Petroleum Exploration Company.
Asked to comment on the year's most significant developments, Mr Bseisu highlighted establishing the company's position in the Kraken field.
EnQuest extended its interest in the discovery to 60% in September, when it also assumed operatorship of the proposed development.
The company said it was on track to submit the Field Development Plan for Kraken in the second quarter of 2013.
Mr Bseisu said: "To me, it's an exciting project and a companychanger. It's one of the biggest projects in the North Sea and will be a large production for a long time. You're talking about 100-160m barrels of reserves."
Mr Bseisu added the company was committed to buying further assets in the North Sea, having bought 8% of the Alba development, and said it was committed to $750m (£495m) of capital investment in the current year, excluding the Kraken project.
While the UK will continue to be its focus, he signalled the company is interested in looking further afield.
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