The drilling contractor said that declining activity in the North Sea, its main area of operation, unfavorable currency rates and recent tax increases were to blame.
Currently, North Sea operations account for 47% of Abbot’s business, but with spending in the region rapidly down over the last six months, and with manufacturer’s output prices at a three-year low, the company is looking to significantly reduce its dependence on its North Sea business by expanding its operations elsewhere. Abbot already has interests in Azerbaijan, Iran, Russia and North Africa.
The Aberdeen-based company has looked to put a brave face on the situation by reconfirming its commitment to oil production in the North Sea and by reporting that it had continued to secure major contracts in the region. However, the future for the area remains unclear as production has dipped below UK requirements and because a number of other companies in the sector have also started to redeploy resources.
Alasdair Locke, executive chairman, of Abbot commented: We remain fully committed to our operations in the North Sea which are an important contributor to the group. We have, nevertheless, a clearly defined strategy of internationalisation which will progressively reduce the group’s exposure to the North Sea.
Recent events have confirmed that this is the right strategy and I am confident that, with its financial strength and high quality of human resource, the group will achieve strong growth in its international areas of activity both onshore and offshore, in 2005, 2006 and 2007.
