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with Jim Craig, Business Manager of Centrica Energy Upstream Netherlands, Centrica Energy Netherlands

12.01.2010 / Energyboardroom

Venture Production has gone through important transformations since the last time we had the chance to meet the company – last year in Aberdeen. How will your Dutch operations be affected by Centrica Energy’s acquisition of Venture Production and the complete change in its management board?

Although the Dutch business operates as part of the larger Centrica Energy organization it has its own targets and responsibilities. However, to ensure we obtain the maximum benefit from the combined organization we have started to integrate in the areas where clear savings and performance improvements can be realised. An example of this is the planned transfer of operatorship of the Centrica Energy’s Grove facility to the Dutch organization in order to have a single organization managing the assets and facilities surrounding our Markham facility.

Having said that, what are your main prospects in terms of growth for the Dutch market now that you count with such a financial and commercial strong arm?

The Dutch business is already major part of Centrica Energy’s activities. Gas from our Markham, Grove, Chiswick and Stamford fields are exported via the Dutch pipeline transmission system.

In addition to these fields we are bringing on stream a new field at the end of next year, F3-FA, which is located in the North of the Dutch sector and is being developed using an innovative mobile production platform. This is a re-useable platform which is self-installing and can be moved to a new location once production from the field is complete.

Both these production hubs have a number of interesting additional development opportunities in the surrounding area and we will be working to bring these opportunities into production wherever possible.

As Mr. Ruud Zoon – Managing Director of Cirrus Netherlands – highlighted, the Netherlands offer unique opportunities for companies aiming to take advantage of depleted fields thanks both to its growing operational opportunities coinciding with the leave of majors as well as its good and stable legal framework. What is your assessment of the Netherlands as a preferred destination for a company that portraits itself as a leader among the ‘new generation of Oil & Gas companies’?

Clearly one of the main advantages offered by the Netherlands is its stable fiscal and legal framework. In addition, developments such as the proposed fallow field initiative are encouraging.

However, it is clear that the Netherlands is entering a new phase. A significant amount of the gas we want to produce in the future will come from small fields and difficult reservoirs. In many cases the gas quality requires additional processing to reach current standards.

This is something the industry and the government have to keep an eye on and ensure that gas from these fields can be produced economically within a reasonable timeframe. Furthermore it is essential that activity levels can be maintained at a level to ensure pipelines, infrastructure and local suppliers remain operational and profitable.

For now I believe that the right incentives are being proposed, but we need to ensure that these initiatives do have the desired effect. Larger parties that are not developing their assets need to move out and allow these fields to pass to new owners within a time frame that can allow us to actually develop these assets.

Is Centrica Energy able to develop its recently acquired fields?

Absolutely. The major focus of Centrica Energy’s upstream business is to acquire, develop and bring stranded and under-developed fields into production.

This focus is well suited to the current North Sea environment. As a strong mid-stream and downstream player and biggest buyer of natural gas in the UK, Centrica is keen to ensure a secure, stable long term supply of natural gas and will still be producing gas long after many of the current operators have left the North Sea.

This is why the integration of Venture in Centrica Energy doesn’t change our focus. On the contrary – we are a low-cost efficient active operator who tries to get things done as safely and efficiently as possible and this is not going to change any time soon.

As an operator, what’s the relevance of partnerships for Centrica Energy and how do you assess EBN role as a quasi-mandatory partner in many cases?

In general Centrica Energy views partners as a sensible way of spreading risks on larger developments. In doing this, we can achieve the appropriate balance across our portfolio.

Ideally, partners should be aligned with our interests, be able to act in a constructive manner as a sparring partner and have a strong financial position. Our experience with EBN is a good example of a very positive partnership.

EBN sees us as a very active and constructive partner for developing marginal fields; hence, we have had a high level of support from EBN since day one. We are working together closely in the development of the F3-FA field.

EBN is also a good partner in terms of pushing back technically and the knowledge sharing between the two companies keeps on increasing. The most positive aspect about EBN is that it doesn’t want to become an operator – their aim is to be an equal partner in the field and they have been of great help for the development of the exploration and production industry in the Netherlands.

How is Centrica Energy dealing with the increased challenge of attracting and retaining the best talent inside the company in a moment when a large number of employees are close to retire and only a limited number of youngsters are available to replace them?

When the upstream market is growing the way it has done over the last few years everybody has the same problem – it is hard to find the good people and difficult to retain them. However, Centrica Energy is a great place for smart, proactive people because here you get a lot of responsibility and variety at a very early stage.

We have an active drilling and development program and graduates have the opportunity to work on a broad range of projects. This is why Centrica Energy has been very successful in bringing in graduates from many universities.

Furthermore, being part of a larger international organization gives our people a broader range of career development opportunities either within upstream or in the broader Centrica organization.

Looking towards the future, what are your main ambitions for Centrica Energy’s Dutch operations for the next three to five years?

Centrica Energy’s Chiswick and Grove fields were discovered in the 1970’s but had remained undeveloped due to technical challenges. Both these fields have been brought into production through a successful mix of technology, innovation and expertise. Our ambition for the future here in the Netherlands is to keep doing the same with subsequent assets.

As an example of that, next year Centrica Energy’s F3-FA field will be brought into production – again, the application of technology and innovation to create the mobile production platform has enabled the development of a field which had been discovered in the early 1970’s.

Our aim is to continuously find and develop fields that other people aren’t developing and bring them into production. It’s as simple as that. The North Sea is our sweet spot and will continue to be so.

What will be your final message to the readers of Oil and Gas Financial Journal about the future of the Dutch Oil and Gas industry and Centrica Energy’s role in it?

I am very optimistic about the future of the Dutch sector. But in order to fulfill its potential, companies and the government have to continue work together to ensure that we maintain and improve the business environment.

If so, the Dutch Oil and Gas industry will have a successful future and achieve the extra 30 bcm per year that the EBN has targetted by 2030. The opportunity is there, Centrica Energy is not wasting any time.



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