Centrica inflates gas reserves

17th Sep 2010 07:01

British Gas owner Centrica has doubled its equity interest in the gas and oil producing Statfjord field in the Norwegian sector of the North Sea to 19.13%.The company is buying the non-operated interests of A/S Norske Shell and Enterprise Oil Norge AS (Shell) in the field for a total cash consideration of NOK1,370m (£144m). The consideration includes NOK670m (£70m) attributable to historic tax allowances.The acquisition bumps up Centrica's gas and oil reserves by 172bn cubic feet equivalent (bcfe) and provides an incremental 70m cubic feet (mmcfe) per day of natural gas and oil production in 2010.Additional field development costs of approximately £100m will be required over the next three years to maximise the recoverable reserves from the 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, the company said.As well as Shell's 9.44% stake in the Statfjord field Centrica is acquiring an 11.04% interest in Statfjord Nord, 5.52% in Statfjord East and a 6.07% 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.