Centrica to Invest £700m in Upstream Oil and Gas Activity
04 March 2011Energy group Centrica said yesterday it would be spending around £700million this year on its upstream oil and gas business.
It also said the division would take on about 60 new people and hailed an “excellent” year for oil and gas operations in 2010 as it posted strong growth in profits.
Upstream oil and gas activities delivered operating profits of £581million during 2010, up from £444million the year before.
Pre-tax profits for the whole group came in at £2.8billion, up from £996million a year earlier. Excluding one-off gains, profits were up by 18% at £1.93billion.
The figures included the first full-year contribution from the Aberdeen business, Venture Production, Centrica acquired in a £1.3billion takeover deal during 2009.
Venture now forms part of Centrica’s Granite City-based upstream arm, whose 300 onshore employees are due to move into the £45million iQ building in Justice Mill Lane later this year.
Centrica, which in November announced plans to slim down its North Sea portfolio by offloading some non-core assets, said yesterday it was the sixth-biggest producer in the UK North Sea last year and one of the top three producers of gas.
Its drilling programme last year saw 11 successes out of 15 wells drilled.
Jonathan Roger, managing director of the group’s upstream business, said: “Centrica Energy Upstream had an excellent year, reflected in both our financial and operational results
“Our operating profits for 2010 were up one-third from the previous year and we had the most active exploration and appraisal drilling programme in the North Sea.”
Mr Roger said the upstream performance was “a great success story” for Aberdeen, adding: “We currently employ 850 people across the company both on and offshore and are looking to recruit around 60 more during the year.
“Almost half of Centrica’s planned £1.6billion investment in 2011 will be spent on progressing our upstream oil and gas business, reflecting its strategic importance to our business.
“This includes a £450million investment to develop our Ensign and York fields in the southern North Sea, which will strengthen our position further as we look to secure future energy supplies for the UK”.
The Ensign platform is already being built and due to be taken out to sea later in the year, with gas production expected to start before the end of 2011. Centrica said the York platform would be built later this year and installed in early 2012, with first output from it also coming in 2012.