By the OGJ Online Staff
LONDON, Oct. 2 -- Amerada Hess Corp. is preparing to put its UK gas and electricity supply business, Amerada Ltd, on the market with a price tag estimated by London energy analysts at $150-225 million.
The company, which is the third largest producer from the UK sector of the North Sea with production of 127,000 b/d of oil and 297 MMcfd of gas, operatorship of 9 fields, and an interest in 22 more.
It has 400,000 customers in the domestic, industrial and commercial sectors for its supply subsidiary and has 7% of the UK industrial and commercial market. It was the first company to enter the domestic gas business following the deregulation of the UK market, in which the previously state-owned British Gas Ltd. had a monopoly. However, it has faced tough competition from other utility suppliers.
Expected bidders for the Amerada Hess portfolio include Scottish and Southern Energy, Scottish Power, and Powergen. At least two US utility companies are also understood to be interested.
Amerada Hess said it wants to focus on its exploration and production business.
Caroline Harper, managing director of Amerada in London, said, "Our parent's upstream focus frees us to seek a strategic investor interested in developing a downstream energy business. Both our domestic and industrial and commercial businesses provide strong platforms for continued growth. We expect this move to strengthen our ability to offer competitive prices and products for our customers."