Centrica plc, the parent company of British Gas, today announced that it has reached an agreement with A/S Norske Shell and Enterprise Oil Norge AS (Shell) to acquire its non-operated interests in the gas and oil producing Statfjord field in the Norwegian sector of the North Sea, and its associated satellite fields, for a total cash consideration of NOK1,370 million (£144 million). The consideration includes NOK670 million (£70 million) attributable to historic tax allowances.
This acquisition will provide Centrica with an additional 172 billion cubic feet equivalent (bcfe) of gas and oil reserves, and an incremental 70 million cubic feet per day (mmcfe) of natural gas and oil production in 2010. Additional field development costs of approximately £100 million will be required over the next three years to maximise the recoverable reserves from these fields. The increased equity share provides Centrica with access to long term sources of gas production at attractive rates of return, providing a good strategic fit with the existing portfolio.
Centrica currently owns a 9.69 per cent equity interest in the Statfjord field and will acquire a further 9.44 per cent interest, doubling its overall interest to 19.13 per cent. It will also acquire an 11.04 per cent interest in Statfjord Nord, 5.52 per cent in Statfjord East and a 6.07 per cent interest in Sygna, all of which are producing fields. The gas produced from these fields is uncontracted and is directly linked to the UK market.
Mark Hanafin, Managing Director of Centrica Energy, said: "This is an attractive transaction that builds on our existing knowledge of the Statfjord field and represents a further step in our strategy to grow and deliver value from our upstream business. It also increases our level of gas reserves to supply British Gas customers and underlines our continued commitment to invest in North Sea production."
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1. The agreement is subject to Norwegian Government approvals.
2. The Statfjord field is operated by Statoil, with licence partners Centrica, ExxonMobil and ConocoPhillips.