A move by Byerngas and Centrica to merge their companies presents a significant opportunity,
especially for Centrica. The good news is Centrica will now have access to minor fields and at the same
time avoid dealing with liabilities by itself. The two mergers expect to produce an estimated 53 million
barrels this year alone, and it is also said that they have access to 620 million barrels of oil and gas
reserves whose existence has been proved.
Centrica gets the bigger piece of the cake by owning 69% of the merger and pushing up interests in the
minor fields. Centrica is also said to be in the process of lowering its expenditures including its capital
investment. Beyerngas Norge, on the other hand, gets to enjoy more business, profit and steady growth
in the industry.
Largest minor gas and oil producer created by mergers
It is more likely for oil and gas firms to join up when there is something of more benefit for both players.
Bayern Gas and Centrica are both non-major oil and gas producers, and their partnership makes them
the biggest miners in the region. However, with access to more young oil and gas reserves, the merger is
expected to graduate into one large oil and gas producer globally.
Oil and gas investments can become a burden that can limit a company from fully exploiting its
potential. By deciding to become a single independent entity, the merger is going to be one of the major
economic entities as it will attract more business opportunities for Europe.
Overview of the merger
Mid size oil and gas exploration companies decide to merge up due to different reasons with the main
one being to make a profit. For a good joint venture to be productive, both players must focus on
improving the business. The newly born joint venture will have a strong portfolio with natural gas taking
up 66% of the total reserves. The merger will also possess a better portion of development assets.
The joint venture is going to have the power of the merged portfolio which is expected to operate 22%
of the production expected in 2017. Centrica will play sales and marketing role in the Joint Venture.
Joint venture management strategy
Although most oil and gas partnerships lead to changes in management structures of merging
companies, Bayerngas and Centrica joint venture is expected to operate as an independent entity
without recognizing either of the companies. The general management team will be led by the current
managing director of Centrica as the C.E.O. there will be four other representatives, two from each
independent company. This is to simplify the decision-making process on matters that require approval
from both sides.
The merger is expected to combine its man power in the joint venture, and each company is supposed
to play specific roles assigned to them by the joint venture which will be reviewed and evaluated on a