LNG to be a key focus of BG group

Raleigh Times Thursday 9th February, 2012

LONDON - Oil and gas major BG Group plans to capitalise on strong global demand for liquefied natural gas to boost investments and growth prospects, the company said Thursday announcing $8.209 billion operating profit, a 19 per cent jump over 2010.

Group's Chief Executive Sir Frank Chapman said: "The outlook for global gas and LNG demand is strong. BG Group is well set to capitalise on these opportunities and is making good progress with delivering its plans."

He added that the group's "LNG supply is set to exceed our 2015 target of 20 million tonnes per annum (mtpa), but we believe that a BG Group supply portfolio of 30 mtpa by 2020 is now within reach. The near-term picture is also very positive and we are raising our LNG profit guidance for 2012 by over 30% to between $2.6 and $2.8 billion. Our LNG business is set fair with the prospect of excellent profit momentum for many years."

To realise its long term strategy, UK's third biggest oil and gas company is planning to sell $5 billion worth assets in the next two years to maintain investment and boost LNG operations.

Reporting results for the full year and fourth quarter (October- December) 2011, Chapman said the full-year revenues and other operating income rose 22 per cent year-on-year to $21.15 billion, while operating profit was up 19 percent from 2010 at $8.209 billion.

In the fourth quarter, revenues and other income was up 34 per cent from a year earlier at $5.83 billion and operating profit 19 per cent higher at US$2.15 billion.

Discoveries during the year in Norway, Tanzania and the UK, have helped the company raise its oil reserves to 17.1 billion barrels oil equivalent (boe) - that's 73 years production at 2011 levels.

"In 2012, we'll invest $1.5 billion in our exploration programme, targeting prospects in seven countries including new frontier plays in Australia, Egypt and Tanzania," Chapman said.

The company expects its production to get a boost with six projects in Bolivia, Egypt, Norway, Thailand and the UK to come onstream during the course of this year.

On funding and investment plans, Chapman revealed that in 2012-13, the BG plans a capital expenditure - on a cash basis to the tune of $22 billion, with non-cash items amounting to $2.3 billion.