Abbot set to cash in on Libyan drilling operations

ABERDEEN oil services firm Abbot Group said yesterday it is poised to cash in on the possible lifting of sanctions against Libya, as it clocked up an 87 per cent rise in profits.

Executive chairman Alastair Locke said the group was one of the major drilling contractors working in the oil-rich state, where it generates annual revenues of about US$10 million (6.2 million).

He added: "If Libya does reach a formal agreement over the Lockerbie issue and the sanctions are lifted, a lot of the western oil majors will look to make some serious investment. That would boost our turnover there by at least two or three times."

Libya has accepted civil responsibility for the bombing of Pan Am flight 103, which was brought down over Lockerbie in 1988.

United Nations sanctions against Libya are expected to be permanently lifted within weeks on the back of the move, although US sanctions might take longer to be removed.

Locke said Abbot was confident that profits, which stretched to 23.4 million over 2002, will grow even more this year - even if the Libyan situation fails to improve.

Disposals of its interests in renewable energy and oil platform inspection have left Abbot focused on its core drilling and engineering operations. Pre-tax profits after exceptional items rocketed 400 per cent to 50.2 million, after the gains on these disposals were taken into account.

The group is also reaping the benefits of its 42 million acquisition of German rival Deutag last year, which has ramped up its international scope.

Abbot’s shares climbed 3.3 per cent to 142p on the back of the figures, aided by a 14 per cent hike in the dividend to 4p.

Aside from the North Sea, where 40 per cent of its revenues are still generated, the group has significant interests in Angola, Nigeria, the Caspian Sea, Russia and the Middle East.

Locke insisted a war on Iraq would have no direct impact on its operations in the Gulf, which are based in Oman and Iran, unless a mass conflict spilled into neighbouring states.

He also added that the emergence of new players in the North Sea, who are picking up the ageing assets being abandoned by the likes of BP, are likely to bring substantial new work.

Locke continued: "What we’ve got is a business that’s growing into a major global operation. In most of our markets, we are the market leader or thereabouts. And what we’ve shown is that you can develop a strong international business from a company that started in the North Sea."