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UPDATE 1-Engie eyes oil and gas exploration-production deals
May 28, 2015 / 12:56 PM / 2 years ago

UPDATE 1-Engie eyes oil and gas exploration-production deals

(Adds detail, executive comments, background)

PARIS, May 28 (Reuters) - French gas and power group Engie hopes to make acquisitions in the oil and gas exploration and production industry in the coming months, an executive at the company formerly called GDF Suez said on Thursday.

“We want to have reserves of more than 1 billion barrels of oil equivalent,” Engie head of international exploration and production Didier Holleaux told a seminar. “We have no timing for this target, but going above this level means acquisitions.”

Engie had reserves equivalent to about 760 million barrels of oil at the end of 2014, equal to 13 years of production at last year’s rate of 55.5 million barrels.

“We are looking at opportunities and we have good hopes of concluding some in the coming months,” Holleaux said.

Asked about Engie’s reported interest in Canadian oil group Talisman Energy early in 2014, Holleaux said the group had considered looking at a possible bid.

“We looked at it of course, but Talisman was too big ... We did not want to make a bid for the whole company as we had reservations about some of its assets,” he said.

Talisman was finally bought by Spanish oil group Repsol at the end of 2014.

Asked whether Engie had considered buying Britain’s BG Group , Holleaux said that BG had been a bit too big for Engie E&P (exploration and production), and even for Engie as a whole.

A takeover “would have significantly changed the shape of our company”, he said.

BG was acquired by Royal Dutch Shell in early April for 47 billion pounds ($72 billion).

Holleaux also said that because of low oil prices, Engie planned a 25 to 30 percent cut in its exploration and production investment budget, which has stood at around 1 billion euros ($1.09 billion) a year in recent years.

He added that large ongoing projects such as Cygnus in Britain, Touat in Algeria and Jangkrik in Indonesia would continue as planned.

The company said in February that the budget of its E&P unit would fall by 400 million euros in the 2015-2016 period.

Engie’s E&P unit had 2014 revenue of 2.8 billion euros and core profit of 900 million.

Last year, two thirds of its production was natural gas and one third was oil. ($1 = 0.6540 pounds) ($1 = 0.9173 euros) (Reporting by Geert De Clercq and Benjamin Mallet; Editing by Andrew Callus and James Regan)

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