SCOTTISH Gas owner Centrica has doubled profits from its North Sea-focused oil and gas operation after shedding jobs in Aberdeen amid the crude price plunge.

The giant utility revealed the exploration and production arm made £187 million underlying profit in 2016 compared with £95m in the preceding year although the prices it got for oil and gas fell sharply.

The increase helped Windsor-based Centrica grow operating profits four per cent annually, to £1.5 billion, in what chief executive Ian Conn said was a year of progress in implementing its customer-focused strategy.

The group lost more than 400,000 UK energy customers during the year. Centrica said it stemmed the outflow in the second half of the year by launching new tariffs and improving customer service.

“We delivered our key objectives including improved customer service and more innovative offerings and solutions – while repositioning the portfolio, building capability and driving significant cost efficiencies,” said Mr Conn.

The cost cutting initiative involved more upheaval for Centrica’s operation in the North Sea where the company has slashed spending since 2014 with implications for employees and suppliers.

Last month Centrica cut 25 jobs in Aberdeen under a restructuring intended to remove duplication.

The company has reduced employee numbers in the Granite City by around a third since April 2015, to 310 from 400.

It has slashed capital spending on oil and gas projects from £1.1bn in 2014 to £520m last year causing pain across the supply chain. The E&P business is centred on the North Sea and has assets in the Americas, which it plans to offload.

Centrica said yesterday it had delivered initiatives across all its E&P assets last year to achieve cost savings, including supply chain improvements and collaboration with other operators.

The update provides fresh evidence of the scale of the retrenchment process that oil and gas firms have been working through in the North Sea, and which may have a way to run.

While the partial recovery in crude prices since November has boosted sentiment, many firms in the services sector have suffered two years of cuts in workloads.

However, Centrica appears to see the potential to make good returns from its slimmed down North Sea portfolio in what may be a long period of relatively low oil prices.

The company increased the valuation of its European E&P portfolio by £79m last year.

Centrica noted the highlights of the year included starting production from the Cygnus development in December. The company reckons this is the UK North Sea’s biggest producing gas field.

It generated £166m cash from the E&P portfolio, versus £86m last time, after cutting North Sea production costs by 15 per cent.

Centrica is working on big developments off Norway under plans to focus investment on what bosses see as its most attractive development options.

The update may be welcomed by some as a sign of continued interest on part of one of the biggest producers on the UKCS.

Centrica has been producing gas from bumper fields in Morecambe Bay for more than 30 years.

The company bought Aberdeen-based Venture Production for £1.3bn in 2009, partly to reduce its dependence on wholesale gas markets.

Centrica cut £1.5 billion from the valuation of its exploration and production portfolio in 2015.

It increased the valuation by £135m in total last year, including £56m in respect of assets outside Europe.

Centrica said it expects to cut around 1,500 jobs across the group this year, after axing 3,400 in 2016.

UK home customer numbers fell three per cent, 409,000, in 2016, to 14.25m. Centrica did not disclose Scottish Gas customer numbers.

The group’s British Gas arm is one of three so-called Big Six energy suppliers to have frozen standard tariff prices in recent months, but is still expected to face fresh calls to address tariffs for business and domestic consumers.

Mr Conn warned the government against imposing a price cap claiming the market works well.

The group held the full year dividend at 12p per share.

Centrica shares closed down four per cent, 8.6p, at 225.1p.