Britain has squandered its natural resources wealth in the North Sea and is paying for its failure to plan for the future, according to Sam Laidlaw, the chief executive of Centrica, the owner of British Gas.

Centrica unveiled half-year profits of nearly £1 billion yesterday, only hours after announcing record price rises.

Mr Laidlaw said that other countries, such as Norway, had prepared for depletion of their oil and gas reserves more effectively than Britain. “If you look at where oil prices are, those that have kept their reserves in the ground [are in a better position],” he told The Times. “They have proved to be much more valuable. Unfortunately that [opportunity] is now over.”

He said that Britain’s failure to invest proceeds from the North Sea in a sovereign wealth fund or to construct adequate gas storage capacity to prepare for rising imports all pointed to insufficient forward planning.

Mr Laidlaw was speaking as Centrica said that group operating profits fell by 20 per cent to £992 million in the year’s first six months – a day after announcing average price rises of 35 per cent for gas and 9 per cent for electricity.

He defended Centrica’s decision to raise gas prices by up to 44 per cent for some regions, blaming soaring wholesale gas costs and a need to import more gas.

Mr Laidlaw said that the UK energy market was entering a period of dramatic readjustment with the rest of Europe as North Sea resources run out.

This year, the UK is set to import 40 per cent of its gas, up from 27 per cent last year. The figure is expected to rise to 75 per cent by 2015. By 2020, virtually all of Britain’s gas will be imported, either by pipeline or ship as liquefied natural gas (LNG).

“It’s an historic step change in the structure of the UK energy market,” Mr Laidlaw said. “The UK has had 200 years of self-sufficiency in coal and 40 years in gas, but we are now losing that. We are moving away from a privileged position where we were well-endowed with oil and gas to one where we are not.”

Prices were rising because Britain was having to buy at international rates as it competed for imports with nations lacking their own resources, he said.

Oil and gas production from the UK North Sea peaked at about 2.7 million barrels a day in 1999, but has since been falling by about 10 per cent a year.

Mr Laidlaw said that Centrica needed to invest billions of pounds in power-generation capacity, including wind farms, and gas storage facilities.

Four years after becoming a net gas importer, Britain still has one of the lowest levels of gas storage capacity in Europe – enough to supply consumers for about two weeks. That is equivalent to 4 per cent of annual demand, against 20 per cent in France and Germany. Analysts say that this is a key factor amplifying volatility in the wholesale gas market. “Centrica needs to be a robust business if we are to invest,” Mr Laidlaw said.

Centrica announced a 16 per cent rise in dividend payout, to £145 million – a decision that Mr Laidlaw defended as a “purely mechanical” payout based on the company’s strong performance during the previous year.

Meter reading

Centrica’s half year to June 30

Group operating profits £992 million, down 19 per cent

Pretax profits £994 million, down 17 per cent

Group revenue £10.03 billion, up 17 per cent

Dividend 3.9p a share, up 16 per cent

British Gas Residential operating profits £166 million, down 69 per cent

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