New joint venture for gas company to feature Bay assets
Centrica's Barrow gas terminals and Morecambe Bay operations are to be part of a new joint venture which is set to be launched this year.
The British Gas owner has put pen to paper on a deal to combine its European oil and gas exploration and production divisions with Norwegian firm Bayerngas Norge.
The energy giant will hold 69 per cent in the new company and Bayerngas will have 31 per cent.
This new entity will contain all of Centrica's oil and gas assets in the UK, Netherlands and Norway and Bayerngas Norge's in Norway, the UK and Denmark.
Iain Conn, the group chief executive of Centrica, said:"As part of our strategy of 2015, we have been aiming to develop a more focused and stronger E&P (exploration and production) business which will contribute to the resilience of the group while limiting Centrica's E&P participation.
"Alongside the recently-announced disposals of our Canada and Trinidad and Tobago assets, this joint venture creates a larger, more sustainable and more capable European E&P business and brings together like-minded shareholders who have a shared strategic vision on the role of E&P."
"As one of the largest independent E&P companies in north-West Europe, the new entity will have the possibility to participate in further consolidation and joint ventures, and creates future optionality for Centrica's shareholders."
Florian Bieberbach, chief executive of Stadtwerke München, the German parent company of Bayerngas Norge, said: "We are convinced that by combining our E&P activities we will create an even stronger and more sustainable business. With its similar background and strategy, Centrica is an ideal partner to develop and grow this joint venture together."
The deal was declared in an announcement to the London Stock Exchange and is expected to be completed in the final quarter of this financial year.
This venture will need the approval of the regulatory bodies which monitor both companies.
The management team will be led by Chris Cox, who is the current managing director of Centrica E&P. He will become chief executive officer of the joint venture.
After two years the new organisation may float on the stock exchange in its own right.