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UK energy group Centrica plans to exit oil and gas exploration and production by the end of 2020 as the owner of British Gas is moving away from fossil fuels production and further 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,” departing chief executive officer Iain Conn said in a statement.
“This major refocusing of our portfolio will unlock further efficiencies enabling us to be even more cost competitive, as we focus on being a leading Energy Services and Solutions provider,” added Conn.
Centrica plans to sell its 69-percent stake in UK company Spirit Energy, its oil and gas production business, by the end of 2020, expecting to do so via a trade sale.
“Spirit Energy is a robust, self-financing entity in a range of price environments. However, E&P is not strategically core for Centrica and our intended exit from Spirit Energy is aligned with the global transition to a lower carbon energy mix,” Centrica said in its strategic update.
Spirit Energy was set up in 2017 after Centrica combined its Exploration & Production business and Bayerngas Norge AS. Bayerngas Norge holds the other 31 percent in Spirit Energy, which produces around 50 million barrels of oil equivalent per year in Europe and works to tap into reserves and resources of more than 600 million barrels. According to the BBC, industry analysts peg Spirit Energy’s worth at more than US$1.8 billion (1.5 billion British pounds).
Apart from exiting the oil and gas E&P business, Centrica intends to sell its interests in nuclear power generation by the end of next year. At the same time, the company is boosting its services offering for electric vehicles (EVs), creating a partnership with Ford to deliver charger installations and energy tariffs for new Ford electrified vehicles in the UK and Ireland.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.