Friday 24 November 2017

Oil man pumped up over future prospects from wells in Russia

Accountant swaps office job for life at 'coalface' in Siberia

Thomas Molloy

Thomas Molloy

PAUL Dowling should be walking on air. The company he helps to lead is the best-performing share on the Dublin stock exchange following a 148pc rise this year.

Instead, the accountant looks tired after returning recently from Siberia, where he slept in primitive wooden huts hundreds of miles from the nearest shop or pub.

The 38-year-old chief financial officer of Petroneft recently made the transition from a cosy accountancy job as a partner in LHM Casey McGrath to the exploration company that has just begun pumping oil from an oil field the combined size of Cork and Kerry.

"Russia is such a huge country, it is hard to fathom," the Dubliner says with more than a little awe in his voice.

"Where we operate is further away from Moscow than Dublin," he adds as he whips out an iPhone, embossed with the Liverpool colours, to show a few pictures of a makeshift soccer pitch on a desolate looking wasteland that is the focus of all Dublin-based Petroneft's hopes.

Whether the oil fields deliver on their promise remains to be seen, but the omens are good. The company has begun pumping oil from deposits more than 2.5km under the snow.

Petroneft plans to extract 4,000 barrels a day this year and to double this amount next year before adding the same amount again the following year.

The company suffered a setback in 2008 when funding dried up almost completely, but it has been on a roll for sometime as it meets its own targets ahead of schedule.

"Lehman was a blessing in disguise," says Dowling. "We had an agreement to borrow $60m the week Lehman went belly up and when oil was $140 a barrel. Everything was predicated on high costs. Instead, we shut up shop for nine months and got most of what we need at around 40pc less than what we would have paid."

In Dublin this week, Dowling appeared confident that the company's stated targets are minimum targets and the vast tracts of land Petroneft is prospecting will yield more oil in the years ahead.

The company plans to drill another 18 wells next year to look for oil in the licence area where it has already found oil and may drill in another huge tract of land for the first time.

The father of three likes doing business in Russia. "The people there are very down to earth, very well-educated. Our modus operandi is to operate like a Russian company in Russia."

Talking about the well-known problems some foreign companies encounter in Russia and elsewhere, Dowling is sanguine.

"People may choose to disbelieve me but we have not had issues in Russia.

"It's true that it's a big bureaucracy but you just have to do the right thing.


"There are lots of permits and things to get stamped but we try to be like any well-intentioned investor and pay our taxes and treat people well."

This means that Dowling, Petroneft chief executive Dennis Francis and other executives keep a low profile in Russia while their staff deal with local issues.

The Dublin and London-listed company is based in Ireland for several reasons, not least the fact that founder and Texas oil veteran Dennis Francis married an Irish woman and raised much of the initial $5m from friends and relatives in Castlebar.

Even today, the company's share register has many addresses in the Castlebar area, reflecting the company's Mayo origins.

While Mr Francis moves between Texas and Russia, Mr Dowling is the company's man here in Ireland and he clearly loves it.

The move from accountant to chief financial officer was a difficult one, despite his former employer's experience shepherding various exploration companies from a twinkle in somebody's eye to a listed company on London's AIM.

His new job has many benefits: "I don't have to fill in time sheets for one," he jokes, but perhaps the bit he likes most is investor relations. His advice for other Irish businesses thinking of listing in Dublin and London is to keep focused on something that is easy to explain and to under promise.

"There are many companies on AIM that perhaps shouldn't be on AIM. They joined the exchange too early in their development or can't explain to the market what they are doing," he muses.

With a company that has consistently met targets for the construction and operation of its oil wells and which has a razor sharp focus on Siberia, these are not problems Petroneft is likely to suffer for some time.

Irish Independent

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