- Canadian assets are considered `non-core,' Centrica says
- Sale of assets may fetch less than the $880 million investment
Centrica Plc and state-run Qatar Petroleum are planning to sell out of their natural gas venture in Canada amid declining prices, according to people familiar with the process.
The companies expect to get less than the C$1.2 billion ($880 million) they’ve put into the venture since 2013, said the people, who asked not to be identified because the deliberations are private.
Centrica is working with the investment banking arm of Toronto-Dominion Bank to find potential buyers for the business, while Qatar Petroleum is in the process of appointing financial advisers to explore sale options, they said. A formal sale process is yet to begin, and the two parties may also decide not to sell their stakes, the people said.
Centrica, the biggest energy supplier to U.K. households, is looking for ways to cut costs after plunging energy prices forced it to cut its dividend and write down the value of some assets by almost 2 billion pounds ($2.9 billion), the company said in a statement Thursday.
“We have said that Canada is non-core,” Centrica Chief Executive Officer Iain Conn said on a call with reporters. There’s no timetable for selling off exploration and production assets “and it’s not a wise time given where prices are now. We are not in any rush.”
A spokeswoman for TD declined to comment. Representatives for Qatar Petroleum didn’t immediately respond to requests for comment.
Centrica and Qatar Petroleum agreed to buy natural gas fields from Canada’s Suncor Energy Inc. for C$1 billion in 2013, forming a venture called CQ Energy Canada Partnership. Qatar Petroleum also bought 40 percent of Centrica’s North American natural gas business for C$200 million in 2014 and agreed to fold it into the venture.
Centrica said in July it aimed to divest as much as 1 billion pounds from its exploration and production and wind businesses by 2017.