Passage to India shaped the future road map for an oil man
His company's share price may be static, but he is cautiously optimistic about the future for oil -- though disappointed that the State deters exploration of our waters. By Thomas Molloy
BRIAN O'Cathain is one of life's advertisements for taking a gap year and following your heart. The Belfast man disappointed his father by turning down an offer to study medicine in Trinity, travelling overland to India instead.
Thirty years later, he runs one of Ireland's quoted companies, after an interesting and varied life in the oil business.
O'Cathain's involvement in oil began when his builder father told him he had to earn the money to fund the India trip. The young man travelled to the Shetland Islands in the late 1970s, where the money was good thanks to the recent discovery of North Sea oil.
The future chief executive's first job was sweeping up oil and dead birds from the beach in the wake of a major oil spill.
One thing led to another and O'Cathain ended up as a lab assistant for an exploration company, thanks to an A-level in chemistry, before he saved the £1,000 necessary to make the trip to India.
Once there, he bumped into fossil hunters and this helped cement his interest in rocks, eventually leading to a degree in geology at Bristol University. That, in turn, led to Shell and jobs on rigs in New Zealand and the North Sea.
This week, just back from Kazakhstan and sitting in Petroceltic's understated but stylish offices, next to the Department of Foreign Affairs on Dublin's St Stephen's Green, O'Cathain (53) came across as an immensely relaxed man with the wide-ranging interests and lively intelligence needed to run a successful oil company.
While extracting oil from the ground can sound a trifle dull, oil companies must weigh up so many different risks that O'Cathain describes the business as "10-dimensional chess".
Like most exploration companies, Dublin- and London-listed Petroceltic concentrates on the far-flung parts of the globe that the big companies ignore.
In Dublin, it employs teams of experts who are given free rein to think about what comes next.
"All our guys have pet projects," he says proudly. "Like Google, there is a lot of access to data, we buy a lot of news."
O'Cathain is clear about what Petroceltic and other rivals, such as Tullow -- where he worked for many years and played a major role in that company's success -- and Heritage Oil do.
"We raise money from pension funds and then use it to drill," is how O'Cathain puts it. "People are paying us to take risks in faraway places with risky politics."
In Petroceltic's case, that means Algeria, the former French territory which was wracked by a bitter and violent civil war in the 1990s.
It was in a remote part of the North African country that Petroceltic discovered a massive gas field, which was among the top 10 finds worldwide in the year it was unearthed.
It is rarely appreciated just how important Algeria is to Europe. The country is connected to the European gas grid and produces just under a third of the gas imported into the EU.
Russia and Norway produce roughly similar quantities, which means that we are all very dependent on Algeria for the gas which drives our electricity-generating stations.
Chatting hours after Energy Minister Pat Rabbitte had been talking on RTE's 'Morning Ireland' yesterday, O'Cathain was full of praise for the new minister who, he said, was the first in a long time to fully understand how important it is for Ireland to secure its own energy supplies.
And O'Cathain should know -- in a former life, he was the head of Enterprise Oil's operations in Mayo to extract gas from the Corrib gas field, a process that is still far from complete 20 years after the first gas find.
He was brought in after a series of PR blunders and left before further blunders were made but is still scathing of the State's failure to help companies extract oil and gas from our waters.
"We'd like to invest in Irish waters but we can't afford the time it takes. Our investors want quicker returns," he says.
After joining Petroceltic as an executive chairman early in the last decade, O'Cathain has slowly pushed the company into the big time.
Just a shell company with five employees in the basement of an accountant's office in south Dublin in the early part of the last decade, the company is now sitting on a massive gas field that will require a $1bn investment, as well as two oil fields in Italy and projects elsewhere.
In some ways, the company has been lucky. Petroceltic signed a deal with Spanish giant Iberdrola just months before Lehman Brothers brought such deals to a shuddering halt in 2008.
Two years later, the debt-laden Spanish company had to sell its 25pc stake in a deal that was highly advantageous for Petroceltic shareholders.
With a gas field in Algeria valued at around $750m, a cash pile of €120m and various other assets, O'Cathain is clearly frustrated with the company's share price, which has not seen much movement and values the company at around $350m. Like all oil types, O'Cathain talks exclusively in dollars.
The Arab Spring, which has seen governments topple from Tunis to Cairo and may claim a few more yet, has had a big and unfair impact on Petroceltic's share price, he believes.
He says Algeria is different to other North African countries because of the strong French legal tradition and the recent experience of destructive civil war, which has left the Algerians with a distrust of violence.
Whether this remains the case remains to be seen but it seems like a persuasive argument and has held true so far.
Taking a step back from Petroceltic's immediate plans, O'Cathain remains convinced that oil and gas have a great future.
In a week where Germany's Chancellor Angela Merkel announced that Europe's largest economy would be nuclear-free within the space of a generation and our own government expressed concern about our dependence on imported energy, the chief executive is confident that we will be using oil for a long time to come.
Calm, cheerful and brimming with curiosity, O'Cathain did share one concern however; the younger generation's fascination with all things green.
"I worry about the fact that our kids think the world will be powered by windmills," is how he puts it.