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Centrica to sell Spirit Energy’s Norway assets for $1.1 billion

Centrica to sell Spirit Energy’s Norway assets for 800 million stg
Centrica to sell Spirit Energy’s Norway assets for 800 million stg   -   Copyright  Thomson Reuters 2021
By Reuters

LONDON -British energy supplier Centrica and its partner, German utility Stadtwerke Munchen, have agreed to sell their oil and gas assets off Norway for a total of $1.1 billion, Centrica said on Wednesday.

The buyers are Sval Energi, a unit of Norwegian private equity firm HitecVision, as well as state-controlled oil and gas firm Equinor.

Centrica, whose 69% share of the proceeds is expected to be worth around 560 million pounds ($741.38 million), said the deal was aligned with its strategy to reduce exposure to carbon-intensive oil and gas exploration and production.

Reuters reported on Nov. 18 that Sval Energi was close to a deal to buy assets from Centrica’s Norwegian venture Spirit Energy.

Sval said in a separate statement on Wednesday it would pay $1.03 billion for a majority of Spirit Energy’s assets, which it said was the largest deal on the Norwegian continental shelf since 2019.

The acquisition, which includes stakes in seven producing fields and several potential developments, will boost Sval’s production by around 40,000 barrels of oil equivalent per day (boepd) to 60,000 boepd by 2023, Sval added.

“Spirit Energy’s Norwegian portfolio adds material production and gives us a good asset base for further growth on the NCS,” Sval Energi’s Chief Executive Nikolai Lyngoe said.

Equinor will buy Spirit’s stakes in the Statfjord area licences for $50 million, plus contingent payments linked to British gas prices, the Oslo-listed company said in a separate statement.

Spirit’s daily output from the Statfjord area, which includes the Barnacle field on the British side of the maritime border, was around 21,000 barrels of oil equivalent per day (boepd) in the third quarter, it added.

The deals have an effective date of Jan. 1, 2021 and are expected to be completed in the second quarter of 2022.

Spirit Energy said it would continue operations in Britain and in the Netherlands, predominantly as a gas business.

($1 = 0.7553 pounds)