Centrica Mulls North American Shale Investment

UK utility giant Centrica said Wednesday that it is likely to invest further in North America, possibly in shale gas, as it seeks to diversify its production portfolio.

In its results statement for 2012, Centrica confirmed that the UK and Norway will remain an important part of its investment and activity as it looks to maintain an appropriate energy hedge in the future and it highlighted its involvement in the Cygnus and Valemon large-scale gas field development projects currently taking place in the North Sea. But while the firm also expects to make decisions regarding drilling opportunities in both the east Irish Sea and the North Sea in 2013, Centrica noted that the increasingly small and more expensive nature of North Sea projects means it is looking to diversify its production portfolio.

"This is likely to include further investment in North America, possibly in shale gas, and there is also the potential for gas exports later in the decade," the firm said in its results statement.

"We have built a good platform for growth in North America, with strong capabilities in energy sourcing and supply, risk management, energy services and upstream gas and power."

Centrica's North American total proven and probable gas and liquids reserves were 108 million barrels of oil equivalent (boe) at the end of 2012. The firm's total 2P reserves stood at 525 million boe after it added 170 million boe during the year.

Centrica reported that its total gas and liquids production in 2012 amounted to 56.7 million boe – up 18 percent on the 48.2 million barrels it reported for 2011. For the next few years the firm expects to deliver between 75 and 100 million barrels annually.

In a separate statement Wednesday, Centrica Energy Upstream Managing Director Jonathan Roger commented:

"Centrica Energy Upstream has seen another successful year, delivering against our commitment to grow the business through a combination of acquisitions and exploration activity. We have made important steps to secure and develop our cornerstone assets, as well as recruit talented people.

"Following record investment in the oil and gas industry last year, the strongest for more than three decades, Centrica Energy Upstream increased its profits by 20 percent for the third consecutive year. We are now well positioned to optimise and develop our portfolio, both in the North Sea and internationally, and will invest to increase our annual production up to 100 million boe." 


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