At least two law firms have expressed interest in joining with Big Six accountants Ernst & Young in a cross-disciplinary alliance to provide a one-stop advice service to the oil and gas industry.
Ernst & Young last week teamed up with UK oil and gas field exploration consultants Hannon Westwood Associates and international geoscience consultancy IKODA. The three firms aim to provide a complete service for oil and gas companies looking to invest or sell interests in the North Sea.
E&Y energy partner Richard Wilson said: “A couple of law firms have expressed interest [in joining the alliance] but we have not started any discussions yet.”
The allies currently involved have an exclusive referral arrangement, although Wilson said that in situations where E&Y was “conflicted out” of a transaction, it had agreed that other accountancy firms could be consulted.
He said the alliance was aimed at companies thinking about investing in North Sea exploration and production, and at companies already in the UK that are looking to build up or reduce their participation in the North Sea.
E&Y restructured its energy division a year ago, bringing together audit, tax and corporate finance teams with engineers and geoscientists to create a multi-disciplinary team that could provide corporate finance advice.
Accountancy firms are anxious to move into corporate finance work, which has so far been dominated by lawyers, as audit revenues decline.
E&Y lost two Scottish partners this month to Rutherford Manson Dowds, a 13-partner accountancy firm with a heavy emphasis on corporate finance work. Edinburgh-based RMD is now aggressively building up its London practice.
But Wilson said developments at RMD were not related to E&Y's alliance and that the two were not in competition in that area.