Centrica plc, the UK owner of the British Gas utility business, has completed the sale of its Norwegian offshore exploration and production assets to Sval Energi of Norway and the interests in the Statfjord oil and gas field to Equinor for an initial $1.1 billion as the UK company pulls out of new offshore activities.
As part of the transaction all future decommissioning liabilities associated with the assets, about £800 million ($1Bln), will also transfer to the buyers.
“The final headline consideration may rise to $1.2 billion dependent on commodity prices,” said Centrica.
“Centrica's Spirit Energy subsidiary will now focus on maximising delivery of its gas production for the UK, repurposing assets for the energy transition and decommissioning activities,” added Centrica.
“Spirit will effectively be in run-off, and we will not explore for new hydrocarbon reserves,” stated the UK utility.
“We will focus on ensuring Spirit can fund its decommissioning liabilities while pursuing opportunities to leverage existing infrastructure to help the UK on its path to net zero,” it concluded.
Storage and trading
Centrica launched Spirit Energy in 2017 as a joint venture with German energy and infrastructure firm Stadtwerke München (SWM).
British Gas supplies energy to 9 million homes across the country and is an in-home servicing provider with a field force of around 7,500 engineers.
Centrica also still retains its Centrica Storage Ltd (CSL) assets to produce and process gas from the Rough gas field in the southern North Sea.
Gas is extracted offshore and sent via a pipeline to the Easington gas terminal in Yorkshire on the East Coast where it undergoes processing and is sent into the National Transmission System.
The company also has its Centrica Energy Marketing & Trading arm involved in LNG and power and gas markets.
It has main offices in London as well as in Aalborg in Denmark. It additionally has branches in Norway and Sweden and subsidiaries in Germany and Singapore.
In a recent trading update ahead of its 2022 interim results due on July 28, Centrica said it would deliver strong operational performance and currently expects full year adjusted earnings per share to be around the top of the range of expectations.
“In British Gas Services & Solutions we have seen some supply chain disruption and higher inflation impacting both the cost base and customer demand,” said the company.
“We expect those headwinds to continue to, at least partially, offset underlying operational progress for the duration of this period of higher inflation,” it added.
“However, volumes from our nuclear and gas production assets in the UK have been strong and our Energy Marketing & Trading business has secured increased volumes of gas and renewable energy to improve the UK and Europe’s security of supply,” it concluded.
