Centrica buys Canadian oil and gas assets

BRITISH Gas parent Centrica yesterday announced that it has partnered with Qatar Petroleum International (QPI) to buy gas and oil assets from Canada’s Suncor Energy, in a deal valued at CA$1bn (£650m).

Centrica will own a 60 per cent stake in the natural gas and crude oil assets and QPI, a wholly owned subsidiary of Qatar Petroleum (QP), will own the remaining 40 per cent.

The deal aligns with Centrica’s plans to make acquisitions in North America and follows last month’s deal with US liquid to natural gas producer Cheniere Energy.

“This is a modest-sized deal for Centrica and is in line with its strategy,” Peter Atherton, analyst at Liberum Capital, told City A.M. “The fact that it has partnered with QPI has added a twist.”

Malcolm Graham-Wood, oil and gas advisor at VSA Capital, agreed that QPI’s involvement was the surprising part of the deal. “A while ago, QP buying gas from somewhere else in the world would have been unbelievable bearing in mind Qatar’s natural resources,” he commented.

“However, it is quite sensible for QP to move away from their home base and they have the cash to do it.”

Centrica has received criticism in the past for making acquisitions abroad rather than exploring for gas in the UK. “They will probably get more stick for this deal now, but it would be a patriotic rather than economic decision to solely focus on the UK market,” added Graham-Wood.