The Sunday Telegraph (UK): Centrica tipped for BP stake in £400m gas field: “…Shell, which had revised its estimates down sharply in the wake of its overbooking of its proven oil and gas reserves earlier in the year.” (ShellNews.net)

By Sylvia Pfeifer and Andrew Murray-Watson (Filed: 31/10/2004)

Centrica has emerged as a leading contender for the £400m stake being sold by BP, the oil giant, in Ormen Lange, the Norwegian gas field. 

The utility company is understood to be on a shortlist of bidders drawn up by BP for its 10 per cent stake in the gas field, as well as its 10 per cent of the Langeled pipeline, which will be used to export gas from the field to UK and European markets. Centrica has made no secret of its desire to increase its exposure to North Sea gas assets.

Other shortlisted bidders are understood to include Gaz de France, the French energy group, and a German energy group, thought to be RWE. Final bids for the stake are due in the middle of next month.

The three companies could, however, still face competition for the stake from BP's partners on the field - Norway's Norsk Hydro, Royal Dutch/Shell, Petoro, Statoil and ExxonMobil.

Norsk Hydro, which is leading the development and operation of the field and owns an 18 per cent stake, has already said it is interested in acquiring BP's stake. However, Petoro, the state-owned Norwegian group, which controls 36.5 per cent of Ormen Lange, has the right to pre-empt the sale and acquire the stake itself.

Industry analysts have been surprised by BP's decision to sell the stake. Ormen Lange became the focus of a debate over how oil companies book their energy reserves earlier this year. The oil group faced questions over its optimism in booking oil and gas reserves when it stuck with guidance that it expected to extract 80 per cent of its share of reserves from Ormen Lange.

This compared with figures of 20 per cent from Shell, which had revised its estimates down sharply in the wake of its overbooking of its proven oil and gas reserves earlier in the year. ExxonMobil has booked 35 per cent of reserves from the field, Statoil 25 per cent and Norsk Hydro 49 per cent.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2004/10/31/cncent31.xml