Centrica has reached agreement with Britoil, a subsidiary of BP, to double its interest in the Statfjord oil and gas field in the northern North Sea. Under industry rules as an existing shareholder in the field, Centrica has exercised its pre-emption right to match a bid of $266 million to acquire BP's 4.84% interest.

Subject to a successful development program on the field, the agreement would add an additional 65 billion cubic feet (bcf) of gas and 14.5 million barrels of oil to Centrica’s portfolio. Centrica acquired its original 4.84% interest from Chevron Texaco in 2004. The deal is expected to be completed during the second quarter.

As one of the largest fields discovered in the North Sea, Statfjord is in the process of completing a ‘late life’ depressurization project to maximize future recovery of gas from the site for the ten years following 2007. Statfjord is currently an oil producing field with associated gas which will be re-engineered to focus on gas production, increasing the level of recoverable gas reserves by more than five times as well as enhancing the ultimate level of recoverable oil reserves.

Sir Roy Gardner, the outgoing chief executive of Centrica, said: We have delivered significant value from our current interest in Statfjord and now have the opportunity to increase our presence in one of the North Sea’s largest fields which will deliver additional gas into the UK market.

This is in keeping with our upstream strategy, to build our portfolio of high quality producing assets and medium term development opportunities to supply our British Gas customers.

Statfjord is situated on the border of UK and Norwegian waters. Centrica intends to increase its participation in the Norwegian oil and gas sector, having pre-qualified as an operator in Norway in 2005.