UK-based Centrica, the parent company of British Gas, has reached an agreement with ConocoPhillips to acquire its non-operated interests in the gas and oil producing Statfjord field for £142 million.
The deal will see Centrica acquire a further 15.17 per cent interest in the field which, combined with its existing equity interest, will increase its overall stake to 34.30 per cent. It will also see the company increase its interest in the Statfjord satellites (Statfjord Nord, Statfjord Øst and Sygna), all of which are producing fields tied back to Statfjord. The gas produced from these fields is either uncontracted or already contracted to Centrica, and is directly linked to the UK market.
The fields are located across both the Norwegian and UK sectors of the northern North Sea.
The acquisition adds additional reserves of 36 million barrels of oil equivalent (mmboe) to Centrica’s portfolio—an increase of about nine per cent, split approximately 60 per cent liquids and 40 per cent gas. The resulting net increase in production will be over 11,000 boe per day.
Field development costs of approximately £200 million relating to the acquired interests will be required to maximise the long-term recoverable reserves from the fields, the company said.
Mark Hanafin, managing director of Centrica Energy, said: “Increasing our stake in Statfjord marks the latest stage in our drive to secure high quality sources of gas for our customers, adding both earnings and long-term value to Centrica.
“The acquisition, which follows our announcement last year of a new 10-year gas supply deal with Norway and acquisition of assets from Statoil, underlines our commitment to invest in North Sea production and secure future energy supplies for the UK.”
The transaction is expected to close in May 2012.
In November 2011 Centrica signed a £13 billion gas supply deal for the UK with Norway from 2015 and announced the £1 billion acquisition of producing and development assets from Statoil in the Norwegian North Sea, which is expected to close in the first half of 2012. When combined with the Statfjord acquisition announced today, this will represent an increase of nearly 40 per cent in reserves and over 30 per cent in production.
