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Natural gas is looking too profitable of a venture for Centrica to make good on its previous plans to sell its UK North Sea natural gas fields, Centrica's CEO told reporters on Thursday.
After last year's natural gas crisis in Europe that sent prices sky high, CEO Chris O'Shea dubbed the previously taboo fields as "a key part of our portfolio".
Just a few short years ago, Centrica announced it would exit oil and gas exploration and production by the end of 2020 as the owner of British Gas planned on moving away from fossil fuels production and into low-carbon energy services.
"Today, we have announced our intention to exit oil and gas production. This will complete our shift towards the customer, as we focus on our distinctive strengths, with an emphasis on helping our customers transition to a lower carbon future," Centrica's then-CEO Iain Conn said at the time, adding that a refocusing of its portfolio would "unlock further efficiencies enabling us to be even more cost competitive.
But now, it's looking like the natural gas market—particularly in the UK—may be just too hard to quit. Instead, it said its UK gas developments “will decline naturally over time” and will be replaced with greener prospects.
Centrica announced major returns for shareholders on Thursday as its H1 profits skyrocketed on its British Gas supply business increasing to 969 million pounds vs 98 million pounds a year ago, as energy bills for British consumers rose.
“To be sustainable and stable you have got to make a profit,” O’Shea said on Thursday.
By Julianne Geiger for Oilprice.com
Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.