Gaz de France aims to triple output to 15pc of sales

Gaz de France said yesterday it wants to triple its own gas production to 15 per cent of its total gas sales by 2003, bringing forward by two years its previous target date.

"We want to have enough reserves to produce 15 per cent of our gas needs by 2003", Michel Przydrozny, GdF's executive vice-president, International told Reuters in an interview. "We want reserves of 600 million barrels of oil equivalent by 2003". GdF is currently heavily dependent on buying in gas, producing only two billion cubic metres a year.

Last week GdF acquired 12 exploration licences, with an average equity stake of 21 per cent, in the UK North Sea from Texaco near existing fields Britannia and Elgin-Franklin. Although the recent acquisitions are viewed as important, they are not expected to form part of the drive for the 15 per cent target since production is only likely after 2003 with a dozen wells set to be drilled between 2001-2004.

"The exploration blocks acquired last week will be developed over five years", said Przydrozny. The GdF executive said the deal with Texaco broadens the group's existing upstream assets portfolio in the UK North Sea, some of which are already producing or set to produce gas. "Elgin came on stream on March 31 and Franklin is expected in August 2001," he said.

In addition five minor fields clustered around the Caister Murdoch pipeline system (CMS) "should start producing by the end of 2003". The five fields are; Errol, Macadam, H44/22B, Q44/22B, and K44/22B. Przydrozny said its North Sea interests were likely to continue representing the majority of its gas production.

At the end of last year GdF's UK reserves amounted to 134 million barrels of oil equivalent (boe), representing about 55 per cent of the group's total reserves of 231 million boe. The GdF executive said the group would continue to look at opportunities in the exploration and production side of the business, but in addition its UK strategy was also focused on retailing gas and providing energy management services.

"Due to our position in the upstream we want to develop our retailing side", said Przydrozny, referring to GdF's UK retail arm GdF Supply Energy and Solutions, formerly Volunteer Energy. "We are dedicated to the industrial and commercial markets and have no plans to enter the residential gas market", he said.

In the area of energy management services, the GdF vice president said the group expected strong growth from its Heatsave Cofathec subsidiary. In the wider European context, Przydrozny said GdF would consider taking stakes in gas infrastructures such as pipelines, but only if the price was right.

"GdF in principle is interested in acquiring interests in gas infrastructure. We are looking for opportunities at the right price", he said.