Centrica Interim Management Statement

LONDON, May 11, 2010 - Centrica has performed well in the year to date. Downstream, the UK
residential energy supply business has benefited from its strong competitive
position, while upstream the business continues to face low gas prices and
modest clean spark spreads.

Our Downstream UK business, British Gas, has had a very strong start to
the year, and the number of joint energy and services households we serve
grew by 50,000 in the first quarter. Energy efficiency measures have
continued to reduce underlying average energy consumption, however the colder
than normal weather in each of the first three months of the year resulted in
average residential gas consumption being 7% higher and average residential
electricity consumption being 2% higher than the same period in 2009. Despite
this higher consumption, the total energy bill for a British Gas residential
customer was, on average, lower in the first quarter of 2010 than over the
same period in 2009, as a result of our market leading reduction of 7% in the
standard gas tariff at the start of February. This made British Gas the
cheapest supplier for both gas (
www.britishgas.co.uk/products-and-services/energy/gas.html) and
electricity, (
www.britishgas.co.uk/products-and-services/energy/electricity.html) at
average consumption, across Britain and helped to drive customer growth in
both fuels. At the end of April, we had over 15.9 million residential energy
accounts on supply, an increase of more than 200,000 since the start of the
year. Given current trading conditions, residential energy supply is expected
to perform strongly in 2010 with profit heavily weighted towards the first
half.

Our business energy supply and services segment is performing well. Our
focus continues to be on the SME market and on higher value Industrial and
Commercial customers, where we are able to offer high levels of service to
multi-site organisations and other accounts requiring more sophisticated
solutions. Improvements in operational performance, strong renewals and
higher than expected demand for energy as a result of the cold weather, have
enabled us to deliver further improvements in margin. We again expect to be
able to deliver strong year on year profit growth in this business.

The residential services business has continued to increase customer
numbers, with over 100,000 contracts added in the first three months of the
year, and we have now converted over one million contracts onto our new
insurance based offering. In addition, the number of central heating systems
installed was up around 20% on the same period last year, reflecting a more
competitively priced product range and benefits from the Government's boiler
scrappage scheme. However, the business experienced additional costs as a
result of the higher incidence of boiler breakdown callouts during the cold
weather in the first quarter.

We continue to make progress in developing those activities that will
underpin future growth in British Gas. By the end of April, we had installed
80,000 smart meters in homes and businesses and now have over 300 employees
working in our insulation business. We also remain on track to reduce the
like for like cost base in British Gas by more than the GBP100 million
originally targeted, allowing us to reinvest additional savings to capitalise
on our current strong competitive position.

In our Upstream UK business, wholesale gas prices have remained low. Gas
and oil volumes produced in the first quarter of 2010 were 59% higher than
2009 reflecting the additional contribution from the Venture portfolio, and
full year production volumes are currently expected to be in line with
previous guidance of around 300bcfe, subject to running patterns of flexible
production. Following the successful integration of Venture, we continue to
make progress with our gas development projects. The third development well
at our Chiswick field, in the North Sea, was successfully drilled and brought
on stream in early 2010 and the fourth well is currently being drilled. Both
the Eris and Ceres gas fields commenced production in March 2010. The first
of two appraisal wells in the western part of our non-operated Cygnus field
was also successfully drilled and development planning is ongoing. In
exploration we made discoveries with both the Olympus prospect in the
southern North Sea and the Fogelberg prospect in Norway. Results from both
wells are encouraging, and early indications are that these will be
commercial development opportunities. In February we announced the
acquisition of Suncor's portfolio of Trinidadian LNG assets. Field partner
consent for this deal has now been received, and the transaction is expected
to be completed around the end of May.

In power generation, the operating performance of Centrica's gas fired
power stations continues to be strong with reliability of the fleet running
at 99% year to date. Healthy UK system margins during the first quarter
resulted in clean market spark spreads averaging only GBP7.71/MWh, and a load
factor of 53% across our gas fleet. On the current forward curve, clean spark
spreads remain below GBP10/MWh for the rest of the year. Commissioning at our
885MW Langage power station is now complete and baseload operation commenced
in March. In February, we completed the joint venture agreement with DONG and
Siemens Project Ventures for the development of the Lincs 270MW offshore wind
project. All major contracts for this project have been awarded and onshore
works have commenced. In nuclear, Centrica's share of the output from the
British Energy fleet was 2.8TWh during the first quarter and we continue to
benefit from British Energy's forward sales, at prices above current market
levels.

In gas storage, our Rough asset continues to perform strongly. We
announced at the end of April that we have sold out all space for the 2010/11
storage year at an average SBU price of 39.7p, down from 46.8p in 2009/10.
This achieved price was partially impacted by a narrowing of summer / winter
spreads towards the end of the sales period.

In North America, our residential and business energy supply segments
have had a good start to the year, with underlying profitability above 2009
levels in the first quarter, in part reflecting improved customer retention
in Texas, and our focus on improving the quality of the customer base. In
addition we are beginning to see the benefits of improved operational
efficiency, with a reduction in operating costs compared to the same period
last year. However, low gas and power prices across North America continue to
impact the financial performance of our gas production assets in Alberta and
our power stations in Texas.

Outlook

In the UK, our integrated energy model is performing well in the current
low wholesale commodity price environment. Downstream our competitive
position, supported by our performance to date, should enable us to deliver
strong returns while remaining price competitive. Upstream the forward
outlook for gas prices will impact returns from our gas and oil assets, while
the industrial and commercial segment will benefit from a modest reduction in
losses from legacy contracts. In power generation, although the marginal cost
of gas fired generation remains below that of coal for most of the year,
forward clean spark spreads continue to be modest. In North America, the
ongoing operational improvements being made to our downstream businesses
should enable improved returns in 2010, while the weak commodity price
environment continues to impact the upstream business.

The Group's net interest charge is expected to be close to GBP200 million
in 2010, and given the profit mix currently projected the Group effective tax
rate is anticipated to be in the 35%-40% range. Net debt at the end of March
stood at GBP3.3 billion, including margin cash out of GBP700 million.

Overall the outlook for Group earnings for the full year remains
positive, subject to the usual variables of commodity price movements and
weather patterns.

Centrica is due to release its Interim Results on 28 July 2010 and plans
to publish its next Interim Management Statement on 17 November 2010.

    Enquiries:
    Centrica Investor Relations +44(0)1753-494900
    Centrica Media Relations +44(0)845-072-8001

Enquiries: Centrica Investor Relations +44(0)1753-494900, Centrica Media Relations +44(0)845-072-8001