UK's Centrica Merges Oil Business With Bayerngas Norge

Geronimo Vena
Luglio 18, 2017

The energy giant - which operates the gas terminals in Barrow - will hold 69 per cent in the new company and Bayerngas will have 31 per cent.

The joint venture created by Centrica E&P's link-up with Bayerngas Norge could open the door to further M&A activity, an industry analyst has said.

A three-year drop in oil prices has led companies producing oil and gas in the costly North Sea region to find new ways to squeeze value out of their businesses, often by selling assets or joining up operations.

Centrica said the joint venture will create one of North-West Europe's largest independent E&P companies.

"As part of our strategy of 2015, we have been aiming to develop a more focused and stronger E&P business which will contribute to the resilience of the Group while limiting Centrica's E&P participation", Centrica's chief executive Iain Conn explained in the statement.

"Alongside the recently-announced disposals of our Canada and Trinidad & 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". The joint venture will contain a mix of producing assets, development options, and exploration licenses, as well as one operated United Kingdom onshore terminal at Barrow-in-Furness, Centrica said.

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. Bayerngas is SWM's upstream E&P vehicle.

After a two-year lock-up period on any transfer of stakes, the shareholders in the joint venture will have customary exit rights, including the ability to initiate an IPO of the joint venture, Centrica said.

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