Centrica Sees Challenging Conditions in 2014 on Rising Costs in North Sea

United Kingdom’s Centrica is switching its attention from the North Sea to Norway and North America, trying to reverse the on-going declining trend despite a difficult year ahead.

‘Market conditions are set to remain challenging in 2014 with margin pressures and unusual weather patterns on both sides of the Atlantic, rising unit costs in the North Sea and weak economics for gas storage and gas-fired power generation,’ Sam Laidlaw, Centrica Chief Executive, commented in a note released on Thursday. 

While operating profit and capital&acquisition expenditure respectively decreased by 2 and 6%, the company registered an encouraging 23% growth of its upstream gas business worldwide on a convincing performance of its assets outside the United Kingdom. 

The company also unveiled a 19% increase in international gas production to 3,557 mmth and a 12% increase of proven and probable reserves to 711 mmboe.

Centrica said it plans to reduce organic E&P capital expenditure by approximately 20% to around £900 million per year on average over the next three years.