British Gas in African sell-off

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The Independent Online
BRITISH GAS is pulling out of western Africa as part of a sweeping reorganisation of its international energy interests, writes Neil Thapar.

The company, which has interests in about 25 countries, said on Friday that it had put up for sale its oil exploration and production interests in Angola, Gabon and Nigeria.

The assets, worth up to dollars 100m, are considered peripheral to its activities and could be either sold for cash or swapped for assets elsewhere. The move is part of British Gas's strategy to refocus its overseas interests to develop an integrated gas-related business in high-growth markets, such as east Asia and Latin America.

A spokesman said: 'The sale is part of our normal course of managing our portfolio. Our principal business is gas and these are oil-producing assets.'

Six months ago it said it wanted to sell its 85 per cent interest in Consumers Gas, the main distributor to domestic users in Toronto, for pounds 570m. The deal is expected to receive regulatory clearance this year.

The west African assets were inherited by British Gas with the dollars 200m acquisition of the international energy division of Tenneco, the US conglomerate, in 1988.

They include a 50 per cent stake in three producing fields in Gabon and 20 per cent in the Abura field in Nigeria. The company also has 7.5 per cent stake in an exploration licence in Angola.

The fields contribute about 10,000 barrels of oil per day to British Gas's daily production, which totalled 270,000 barrels of oil equivalent last year.

High political risks associated with west Africa could restrict interest from potential buyers.

David Stedman, oil analyst with Daiwa Research, said: 'It is hard to value the assets because of political risks. They could worth anywhere between dollars 50m and dollars 100m.'

Despite the planned withdrawal, British Gas said it was committed to maintaining a presence in other parts of Africa. Its interests include 49 per cent in Cercina, an offshore Tunisian oilfield that began production last week.