Centrica has announced an agreement with Britoil, a subsidiary of BP, to double its interest in the Statfjord oil and gas field in the northern North Sea. Under industry rules as an existing shareholder in the field, Centrica has exercised its pre-emption right to match a bid of £151 million to acquire BP’s 4.84 per cent interest.
Subject to completion during the second quarter and a successful development programme on the field, the agreement would add an additional 1.84 billion cubic metres of gas and 14.5 million barrels of oil to Centrica’s portfolio. Centrica acquired its original 4.84 per cent interest from Chevron Texaco in 2004.
As one of the largest fields discovered in the North Sea, Statfjord is in the process of completing a ‘late life’ depressurisation project to maximise future recovery of gas from the field for the 10 years following 2007. Statfjord is currently an oil producing field with associated gas which will be re-engineered to focus on gas production, increasing the level of recoverable gas reserves by more than five times as well as enhancing the ultimate level of recoverable oil reserves.
Centrica’s additional share of the associated capital expenditure for the project would be approximately £50 million. A new export pipeline from the Statfjord field to the FLAGS pipeline into St Fergus will also enable additional quantities of gas to be delivered to the UK market.