Some of the UK’s leading natural gas utilities are honing their upstream investment strategies in response to the lower oil and gas price environment. Centrica’s new chief executive, Iain Conn, aims to scale back the company’s upstream portfolio to focus investment on its more profitable energy supply businesses such as British Gas. Centrica raised its upstream output by 9pc/yr from 2007 to just under 220,000 b/d of oil equivalent (boe/d) last year, by acquiring assets in the North Sea, Trinidad and Tobago, and Canada. But lower oil and gas prices have undermined upstream profitability and led to a ￡712mn ($1.1bn) impairment charge last year. “We are participating in five countries, which we believe is too stretching for our scale and capabilities,” the firm says.
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