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Centrica and Statoil extend gas exploration partnership

Good news for British companies, says David Cameron.

Centrica, the parent company of British Gas, and the Norwegian oil and gas explorer Statoil have extended their gas exploration memorandum of understanding, signed in November 2011, until June 2013.

The memorandum, which has already resulted in the companies bidding jointly in the 27th UK North Sea licensing round, was signed to cement collaboration on gas-focused exploration opportunities in Norway and the UK.

In 2011, Centrica signed a ten-year gas supply agreement worth £13bn with Statoil, which secures sufficient gas to meet around 5 per cent of total UK annual demand and caters for around 3.5 million homes.

Centrica also recently completed a £1bn acquisition from Statoil of a package entailing the production and development of oil and gas assets in the Norwegian sector of the North Sea, increasing its reserves by 29 per cent.

Sam Laidlaw, chief executive of Centrica, said:

Centrica’s relationship with Statoil is vital for UK energy security as it brings together one of the world’s largest gas markets with one of the world’s largest gas exporters. 

Today’s announcement deepens this relationship and we look forward to working further with Statoil to explore untapped resources across the UK and Norway.

The UK Prime Minister, David Cameron, said:

I’m delighted that Centrica and Statoil are going to continue their successful gas exploration together in Norway and the UK. Gas plays a central role in powering our economy, and today’s agreement will ensure that British companies are at the forefront of discovering new energy sources, helping to secure diverse energy supplies well into the future.

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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.