Centrica snaps up Canadian oil and gas assets

Utility group Centrica, which owns the British Gas business, is buying several natural gas and crude oil assets in Canada jointly with Qatar Petroleum International (QPI).

The two groups will pay a combined C$1.0bn (£650m) in cash for the assets, which will be 60% owned and operated by Centrica.

The assets and associated infrastructure are located in South and Central Alberta in the Western Canadian Sedimentary Basin and are currently owned by Suncor Energy. They overlap with existing Centrica assets and are expected to provide the opportunity for cost savings.

Proven and probable reserves estimated by the partners are 978bn cubic feet equivalent of gas, averaging 250m cubic feet equivalent per day, equal to 15m barrels of oil equivalent per annum.

The deal is the first investment under the memorandum of understanding (MoU) signed between Centrica and QPI in December 2011.

Sam Laidlaw, the Chief Executive Officer of Centrica, said: "I am delighted to achieve our first investment with QPI under the MoU, and the establishment of a new partnership in North America. The acquisition provides attractive returns in a region we know well, and significantly increases the size and quality of our portfolio.

"It also presents exciting development opportunities, with the potential to improve returns further."