Centrica, Qatar Petroleum to Buy Suncor Gas, Oil Assets
LONDON - U.K.-based energy firm Centrica PLC and state-owned Qatar Petroleum International said Monday they have reached an agreement with Suncor Energy Inc. to acquire a vast chunk of its natural gas and crude oil business in Canada for $1 billion Canadian dollars (US$0.986 billion), marking the first investment the two companies have made together since signing an agreement to explore such purchases two years ago.
The deal is in line with Centrica's quest to become a more self-sufficient retail energy provider in North America where it owns the retail business Direct Energy, and marks its first big purchase after announcing two months ago that it would no longer invest in a new U.K. nuclear power plant, thus freeing up cash to invest elsewhere in its business.
For QPI, the international arm of Qatar Petroleum, the deal represents an attempt to diversify its business, which is heavily concentrated in oil and gas production in the Persian Gulf.
The assets will be jointly held by Centrica and QPI in a joint venture that will own be 60% owned by Centrica and 40% owned by QPI, with Centrica acting as the operator. The transaction is expected to close in the third quarter of 2013, subject to regulatory approval.
The assets are located in the Canadian regions of Alberta, northeastern British Columbia and southern Saskatchewan.
The business is forecast to produce about 250 million cubic feet of natural gas equivalent a day in 2013 or 15 million barrels of oil equivalent a year, and has proven and probable reserves of 978 billion cubic feet equivalent of natural gas of which 10% is crude oil.
"Growing our upstream gas operations is an important step to ensuring the company is a solid long-term partner to millions of residential and business customers across North America," said Wes Morningstar, senior vice president at Centrica in Calgary.
Once the transaction is closed, Centrica will be able to cover about 60% of its unregulated daily gas requirements from its growing North American Direct Energy retail energy business.
Nasser Al-Jaidah, chief executive officer of QPI, said the deal "is a significant step in the development of QPI's global upstream business. We look forward to continuing to advance QP's overall North American energy business."
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Sharp Fall In Applications For Norway's Arctic Oil Permits (Dec 05)
- Drilling of Well at Fogelberg Gas Discovery to Start in Feb/March -Centrica (Sep 01)
- Centrica Merges Oil Business with Bayerngas to Tap Younger Fields (Jul 17)
Company: Suncor Energy more info
- Suncor Says Makes Progress In Oil Sands Project Dispute With Total (Oct 26)
- Canadian Oil's High-Priced Run Set to End as Supply Surges (Oct 11)
- Suncor, Total Argue Over Cost Of Fort Hills Project (Jul 27)
Company: Qatar Petroleum more info
- Hoegh LNG: Pakistan LNG Import Project Consortium Folds (Nov 16)
- Qatar Says It's Fulfilling Oil and Gas Deals Despite Gulf Crisis (Sep 13)
- Cyprus Says to Push Ahead with Energy Plans Despite Challenges (Jun 29)