SHARE
Centrica CEO Iain Conn. Image courtesy of Centrica.

UK-based Centrica said Thursday it will cut 6,000 jobs and shrink the size of its oil business as it refocuses on energy supply.

According to Reuters, the company will slash its headcount by about 6,000, although it expects to create 2,000 positions in new business areas.

Centrica has not disclosed details about the layoffs but said that half of the cuts will be made through redundancies.

The firm also plans to sell up to $1.56 billion worth of wind and upstream assets by 2017, Reuters added.

Centrica is targeting $1.171 billion, or about £750 million, in cost efficiencies per year by 2020, with about two-thirds of those savings expected to be delivered by the end of 2018.

CEO Iain Conn told investors that Centrica now considers its Canadian E&P business to be “non-core.”

“We will not look to grow our Canadian business and will seek ways to maximize value from our existing position in close coordination with our partner, Qatar Petroleum,” Conn said.

Centrica booked $1.56 billion in adjusted operating profit, up from $1.61 billion in the second quarter of last year, on $24.13 billion in revenues for the second quarter, down two percent year-over-year.

Profits at Centrica Energy, the company’s oil and gas arm, fell 78 percent in the first half of the year to $181.14 million.

The company plans to scale back its exploration and production efforts and focus its attention on the North Sea and East Irish Sea.

“While we have built an E&P business with good capabilities over the past six years, we are participating in five countries which we believe is too stretching for our scale and capabilities. As a result we will focus our E&P activity on the North Sea and East Irish Sea, where we are material enough to play a major part in the UK and Netherlands, and have the capability and presence in Norway to allow us to access additional value opportunities,” Conn told investors.

Conn said Centrica will shrink its oil production to around 40 million to 50 million barrels of oil equivalent per year, down from 75 million to 80 million barrels of oil equivalent per year during 2013 and 2014.

“The emphasis on growth will be in our customer-facing businesses and we have clarified the roles of E&P and our central power generation businesses….We have determined that a stable E&P business which produces around 40-50mmboe per annum, and requiresbetween £400-£600 million of capital expenditure each year, is sized to fulfil this role.” Conn added.