It has been announced today that Centrica has negotiated significant reductions on the bulk of its high priced "Take or Pay" contracts with Phillips, Fina and Agip. As a result, prices will be reduced to current market levels on the remaining field reserves from October 1998.
In return Centrica has agreed to pay Phillips, Fina and Agip compensation with an immediate payment followed by a further payment at the beginning of 2002. The consideration for these deals amounts in aggregate to £43 million, before tax, but after discounting the deferred payments to present values.
In aggregate Centrica has now reduced prices and volume commitments on 47 billion therms.