Aberdeen banker seals first Moscow energy deal

0 Comments | Sunday Herald, The, May 1, 2005 | by Valerie Darroch

ENERGY investment bank Simmons & Company has concluded its first deal in Moscow and aims to open new bases in the Far East and Middle East as part of an expansion plan to take advantage of surging interest in the energy sector.

The eastern hemisphere operations of the Houstonheadquartered bank are run by Colin Welsh, chief executive of Simmons & Co International from the Aberdeen base he set up six years ago.

He declined to disclose details of the first deal from the Simmons's new Moscow base at this stage but said it has led to a second transaction that has yet to conclude. "Moscow will become an enormous market and you need to be there. The eastern hemisphere is where all key areas of production growth will be, " Welsh said.

Welsh has grown the Aberdeen operation to 35 people and recruited chief economist, Will Davie, who was previously with Schlumberger and also worked with the International Energy Authority in Paris.

Welsh anticipates continued tightening of energy markets and forecast that commodity prices will continue to be robust for the foreseeable future. Global oil supplies are tight and the latest US economic data provided fresh evidence that high crude prices are having a negative impact on growth.

The US economy expanded by 3.1-per cent in the first three months of 2005, its slowest pace in two years.

President George Bush last week outlined his five-point energy plan, which included new refineries, steps to encourage cars to use cleaner fuel and a controversial proposal to drill for oil in an Alaskan wildlife reserve.

Simmons & Co founder and chairman Matt Simmons, who is an energy adviser to Bush, warned that global oil reserves are far lower than suggested by official figures.

Simmons has undertaken extensive research into the oil fields of Saudi Arabia, the world's largest oil exporter, and claims that it has been overstating its reserves for decades.