TAQA has signed a contract with Wood Group Engineering (North Sea) Ltd for the provision of operating and maintenance activities and to act as Duty Holder for TAQA's offshore assets in the Northern North Sea.
The contract is effective until June 20, 2013 unless terminated by the Parties. However TAQA plans to become Duty Holder for the Northern North Sea assets within 9 to 18 months from being approved Operator of the Northern North Sea Assets, with Wood Group continuing to be TAQA's operating and maintenance contractor. The value of the contract has been agreed by the Parties to remain confidential.
On July 7, 2008 TAQA announced the signing of a Sale and Purchase Agreement with Shell U.K. Limited (Shell) and Esso Exploration and Production (UK) Limited (Esso) for their entire equity interests in the Tern, Eider, Cormorant North, South Cormorant, Kestrel and Pelican fields and part-equity in related infrastructure situated in the Northern North Sea. The fields' average daily production represents a significant increase to TAQA's existing European footprint. TAQA expect to complete their transaction with Shell and Esso and become owner of the Northern North Sea assets towards the end of 2008.
The terms of the contract will see Wood Group manage all offshore production operations, including health, safety and environmental regulatory compliance. TAQA will concentrate on its core responsibilities as license operator and on building its presence and capability in the UK.
Peter Barker-Homek, TAQA's chief executive officer, said, "This contract underlines TAQA's long-term commitment to the North Sea. Wood Group is a highly respected international service company capable of adhering to TAQA's strict operational requirements. We aim to establish first class health, safety and environmental standards on all our offshore assets and believe Wood Group can satisfy these demands.
"TAQA intends to make significant investment in our North Sea assets in the foreseeable future, extending field life and increasing productivity with enhanced drilling programmes. Wood Group has the experience and the drive to help us achieve our ambitions in Europe, which along with North America and the Middle East is key to our global development."
George Brown, Managing Director, Wood Group Engineering (North Sea), responsible for managing the Duty Holdership contract, said, "Wood Group is delighted to have been awarded this Duty Holder contract by TAQA, under which we will also provide all engineering and project support. We have worked hand-in-hand throughout 2008 in preparation and we look forward to bringing our technical and management expertise to support everyone involved in these facilities. Our principal goal is class-leading Health, Safety and Environmental and operational performance."
As of March 31, 2008, TAQA's existing combined European upstream operations had proven and probable reserves of approximately 38 mmboe and reached average production of 23 mboe/d.
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