Fairfield Boss To Quit Amid North Sea Squeeze

The boss of a prominent North Sea oil producer is to step down amid an ongoing industry crunch triggered by the sharp fall in oil prices.

Sky News has learnt that David Peattie, who took over as the chief executive of Fairfield Energy in 2011, is to leave the company in the wake of its announcement that it is to decommission its Dunlin Alpha platform.

A leaving date has yet to be finalised, but people close to Fairfield said that he was likely to depart towards the end of the year.

Mr Peattie was recruited with a mandate to transform Fairfield into a major North Sea producer following a successful career at BP, where his most crucial role was as the head of its sometimes-fractious but lucrative operations in Russia.

However, the slump in the oil price has rendered many North Sea fields uneconomic, prompting thousands of job cuts led by majors such as Shell (LSE: RDSB.L - news) and Mr Peattie's former employer, BP.

The cost of decommissioning Dunlin is expected to reach £400m, underlining the crunch facing mid-sized companies like Fairfield, which is now expected to focus on decommissioning services for other operators.

Energy groups including Total (Swiss: FP.SW - news) of France and Germany's Eon (Taiwan OTC: 3411.TWO - news) have hoisted a 'for sale' sign over their North Sea operations, although the sudden glut of assets available to buyers mean that prices are likely to be severely depressed.

Fairfield is backed by shareholders including Riverstone, a major energy-focused investment firm which until recently counted Lord Browne, the former BP chief executive, among its partners.

Lord Browne has now moved to L1 Energy, a new investment group backed by the Russian oligarch Mikhail Fridman which has recently been embroiled in a dispute with the UK Government about its ownership of several North Sea fields acquired as part of its takeover of Dea.

Fairfield's Dunlin field started production in 1978, with production peaking at about 120,000 barrels per day the following year.

The field is situated 300 miles north-east of Aberdeen and was originally operated by Shell before being acquired by in 2008.

Speaking earlier this month when the decommissioning was announced, Mr Peattie said:

“The Dunlin asset has now achieved maximum economic recovery.

"Taking into account the asset’s lifecycle, the depressed oil price and challenging operational conditions in the North Sea, starting the decommissioning process is the most appropriate action.

"Our investment programme has prolonged the life of Dunlin leading to a notable contribution to the British economy and the creation of jobs in North Sea oil and gas.

"We are fully committed to delivering a safe and transparent decommissioning process and will work closely with staff and stakeholders to achieve this.”

Fairfield's other shareholders include Warburg Pincus, the private equity firm.

A Fairfield spokesman declined to comment on Mr Peattie's likely departure.