Michael, Cove Energy was a deserved recipient of our Mid-cap E&P of the Year award at last November’s Annual Awards Dinner. What a lot of people are asking with Discover Exploration is whether it is Cove version 2.0, or if there’s anything different in the business model?
It is very similar in many respects to Cove. We have the same senior management team with me, John Craven and Michael Nolan in similar roles. We also have [former Cove advisers] Paul Griggs and Alex Mollinger on board, which is exciting. This team will remain small and flexible so that we can react quickly to opportunities. We will be focused on offshore deepwater prospects mainly in Africa. The major difference is that we are currently funded as a private company.
Did any part of you consider retiring after the sale of Cove – to Thailand’s PTT last July – instead of setting up another company?
I am full of energy and ideas and I am thoroughly enjoying myself. We have a wonderful team and we are having a great time doing what we are doing.
There has been a curious dearth of M&A activity in the London market for O&G stocks recently, especially those operating in Africa, when you consider the number of small explorers sitting on large acreage and the level of national and international oil company appetite. Why do you think that is?
I consider it to be part of the natural cycle of the buying and selling of assets. Good companies with high-quality assets will always be in demand.
Do you ever think about what Mozambique might look like in 10 years’ time with regards to developing its around 80-plus tcf gas reserves? Are we looking at an important LNG (liquefied natural gas) hub or could things turn out differently?
Yes, it I expect it be a major LNG hub, the first in east Africa and therefore strategically important on a global scale. It will be a different place to today. GDP will be significantly higher. The government of Mozambique is extremely sound and I am confident they will use the newly found sources of income to the full benefit of the people of Mozambique.
Before Cove, you spent more than 29 years at Shell, including four years as country manager for Algeria. How does the current excitement around the exploration going on in Africa – east and west – compare with what you’ve seen in the past?
My 29 years with Shell were great fun and a superb learning experience. Running one’s own company is a totally different experience and extremely exciting. However, doing the latter would have been impossible without having first obtained the relevant knowledge, skills and experience at Shell. Together they make a complete and fulfilling career.
Excluding Mozambique and Tanzania, what other parts of Africa’s O&G landscape interest you most, or have the most potential in your opinion?
Deepwater exploration only started in the 1980s. Deepwater acreage worldwide is under-explored. The transform margin in west Africa in particular has huge potential. Countries such as Angola, Congo, Gabon, Namibia, Ghana, Côte D’Ivoire, Liberia and Sierra Leone.
Do you think foreign E&P companies generally enjoy a good reputation in east Africa as wealth creators, or is the alternative the case?
The oil industry is one of few industries around the world that has its act together in the areas of business principles and technology. The industry is aware of its role and the importance of sustainability as an ingredient of success in the countries of operation. There are some very high-quality companies operating offshore east Africa, most of which have excellent reputations. I am talking about companies such as ENI, Anadarko, BG, Ophir, Statoil and Total.
Are independent E&P firms generally better at corporate social responsibility than NOCs and IOCs?
The O&G industry is aware of its role and the importance of sustainability as an ingredient of success in the countries of operation. This is a vital part of the oil and gas business model. Any company that does not embrace these principles will not be successful.
Looking at the global O&G industry as a whole, which other companies do you admire, and why?
I have a lot of respect for all the majors and also many of the other O&G companies. Specifically, Anadarko by way of its technical and operational excellence. In my view it is the best exploration company in the world at the moment. It is our former partner, so I have a good insight into the culture and we really enjoyed working with them. Having worked for Shell for 29 years, I believe Shell is a fantastic company in respect of people, technical, commercial and business principle competencies. After I left the company I was able to maintain a very good relationship with my former colleagues and had some very positive experiences working with Shell.
How do you enjoy spending your spare time?
I love being in the countryside in Italy.
Finally, something we always ask: what three things would you bring to a desert island? (NB: You are NOT allowed Practical Raftbuilding for Dummies, a satellite phone, tickets for the ferry, etc!)
Mrs Blaha, some good books and a solid collection of Italian wine.
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