BG down on production warning

Oil Rig09 September 2013, News Wires – BG Group’s shares have taken an early beating in London after the company dropped its 2014 production estimate on instability in Egypt and a likely delay to a Norwegian project.

The UK major will also reduce its rig count in the US which will chop yet more production next year and warned that 2015 production guidance is dependent on a recovery in gas prices and the situation in Egypt.

BG said its production guidance for this year is unchanged but that the continued social and political unrest in Egypt will delay phase 9A of the West Delta Deep Marine project. First production is now set to be later than expected next year, and this itself is dependent on the situation not getting any worse in the country.

In Norway first production on the Knarr project will likely be delayed four months until the second half of next year.

The combined impact on production of both of these issues will be approximately 30,000 barrels of oil equivalent per day.

BG also expects to operate fewer rigs in the US next year in response to low natural gas prices. As a result of the reduced rig count volumes will be shaves by around 17,000 boepd.

Although the 2015 guidance remains the same at between 775,000 and 825,000 boepd, this is dependent on a recovery in US gas prices and the situation in Egypt returning to normal.

Shares in BG sank around 4% before the opening of trading on the London Stock Exchange on Monday.

Egyptian unrest also made Irish independent Petroceltic International lower its 2014 production guidance by between 500 and 2500 boepd.

– Upstream

About the Author