BG Group Plc, the U.K.’s third- largest natural-gas producer, posted a 44 percent drop in profit because of lower demand as production fell short of its expectations following a delay in Tunisia.

Net income in the third quarter declined to 484 million pounds ($791
million) from 857 million pounds a year earlier, the Reading,
England-based company said in a statement today. BG fell the most in
almost three months in London trading after saying operations at
Hasdrubal in Tunisia won’t start until the end of November.

BG “reported positive business performance earnings this morning,” said
Jason Kenney, an analyst at ING Wholesale Banking in Edinburgh. “ING
prefers to remain conservative given the still likely possibility of
weak gas demand effects and assuming a slower ramp up of Tunisia
Hasdrubal.”

LNG spot prices in Asia slumped to $8 a million British thermal units
from about $18 at the end of last year as the global recession reduced
demand from utilities in Japan and South Korea, the world’s biggest
buyers of the fuel, according to Sanford C. Bernstein & Co.

Excluding disposals and other one-time items, profit was 474 million
pounds, beating the 444 million-pound median estimate of six analysts
surveyed by Bloomberg News.

BP Plc yesterday said third-quarter net income dropped 34 percent to
$5.34 billion as crude oil prices plunged. Earnings excluding one-time
items and inventory changes beat analyst forecasts. Royal Dutch Shell
Plc will report tomorrow.

Stock Performance

BG slipped as much as 3.8 percent and traded down 26.5 pence at 1,106
pence as of 10:52 a.m. The stock has risen 16 percent this year,
outperforming BP’s 11 percent gain and Shell’s 5.7 percent increase.

Third-quarter production increased 5 percent to 56.6 million barrels of
oil equivalent, or 615,000 barrels a day, from last year.

Output was 2 million barrels below the company’s expectations,
“predominantly due to a delay in the start-up of the Hasdrubal facility
in Tunisia.” The project is expected to start at the end of November.

BG is currently pumping 700,000 barrels of oil equivalent a day, up 12
percent from a year ago, Chief Executive Officer Frank Chapman said.

In July, BG delayed its 680,000-barrel-a-day production target for this
year into the first quarter of 2010 because of lower demand for fuels.

Guara Plan

BG, Repsol YPF SA and Petroleo Brasileiro SA are advancing with
projects in Brazil and now plan to secure a floating oil production
facility for the Guara field. The unit will have a 120,000 barrel-a-day
capacity and is expected to start production in 2012.

The U.K. explorer, Petrobras and Galp Energia SGPS SA are also
developing the Tupi field offshore Brazil, which is on plan to start
pumping at the end of 2010.

BG and Petrobras have completed testing operations at the Corcovado-1
well. The well flowed “very light crude condensate and gas,” Chapman
said.

The drilling of both the Corcovado-1 and Corcovado-2 wells “has
extended the partners’ understanding of the Corcovado structure” and
the venture is evaluating the test results “to determine future
drilling plans,” BG said.

BG, which is vying to become the third-largest producer of LNG, said it
needs to start its Queensland Curtis LNG project in Australia by early
2014 as rival projects threaten to saturate the Pacific Basin. It plans
to start the first unit, or train, to produce fuel from coal-seam
methane in late 2013. A second unit will be ready 12 months later.

In August, BG, Petroliam Nasional Bhd. and Edison SpA started gas production from the Sequoia field offshore Egypt.

Source: Bloomberg

Search to find what you want

• Yemen LNG says produce u0026quot in the

    Yemen LNG expects to start production from its new gas liquefaction plant in the “coming weeks”, the company’s chief executive said on Sunday. The first cargo was originally scheduled to be exported in August, but start-up problems, including leaking valves and minor glitches, delayed first production. “Well we are in

• Overall, says Bolivian Gas Field Ready to Start Production

     French oil major Total said the Itau gas field, located in the southern Bolivian province of Tarija, was ready to start production, with daily output estimated at 1.4 million cubic meters. A certificate of commercial viability for Itau was submitted to energy officials on July 31, opening the way for

• Mega liquefied natural gas facility in Qatar launches

    Qatar Petroleum and Exxon Mobil Corporation yesterday announced the completion and start-up of Qatargas 2 Train 5, one of the largest operating liquefied natural gas (LNG) production facilities in the world. This follows the start-up of the Qatargas 2 Train 4 in the second quarter of 2009. Each is designed with

• Russia s oil production to fall 2010, the Bernstein analyst,

    Russian oil output will stagnate in 2010 and begin to decline as mature fields lose production capacity and only one new project comes on line, oil analysts at Bernstein Research said on Wednesday. Russia, now the world’s largest oil producer, pumped 10.01 million barrels per day last month, up 0.4 percent

• Pertamina expect more than 10 percent of oil production increase in 2010

    State oil and gas company PT Pertamina expects to boost oil production by 10.93 percent next year, president director Karen Agustiawan told lawmakers Thursday. ?”We expect that Pertamina oil production will increase from 174,000 bopd barrels of oil per day, which is the production target for 2009, to 193,900 bopd

• Liberia iron ore production set to start in 2011

    Liberia is set to restart its ore mines in 2011 after the easing of political instability in the country, the International Monetary Fund (IMF) has said in a report on Liberia. According to the report, growth is to be boosted through positive spillover effects on other sectors as iron ore

• Total-to-ship first Yemen LNG cargo in South Korea

    Total SA will ship the first cargo of liquefied natural gas from its Yemen LNG venture in a “matter of weeks,” and the second production line will start in 2010, an official said. The first cargo from the 6.7 million metric ton-a-year LNG venture in Middle Eastern nation will be sent

• Galoc s oil production hits 3.6 million barrels

    The Galoc oil field in offshore northwest Palawan has produced 3.6 million barrels of oil to date and delivered 10 shipments to customers, Otto Energy Ltd. of Australia said Thursday

• Top Rio iron ore target set years after the slow start

    Rio Tinto Ltd/Plc could exceed an upwardly revised annual global iron ore production forecast, as its Australian mines produced at full tilt in the final months of 2009 following a slow start. But the added tonnage scheduled to show up in Rio’s fourth quarter production summary on Jan.

• Production at RasGas train 6 \ u0026quot; imminent \ u0026quot;: ExxonMobil

     ExxonMobil Corp said over the weekend that production from its new liquefied natural gas unit in Qatar is “imminent”. Ras Laffan Liquefied Natural Gas Co’s train 6 “was mechanically completed during the second quarter”, David Rosenthal, ExxonMobil’s vice president of investor relations, said. “Gas is flowing into the unit and first LNG

• BG profits drop on the Lower Gas Prices

    BG Group Plc, the U.K.’s third- largest natural-gas producer, said profit fell 38 percent in the fourth quarter because of lower prices for the fuel.

• UAE to cut oil production in February

    The Abu Dhabi National Oil Company, the largest such company in the United Arab Emirates, has announced it will cut back its production from February, the official WAM news agency said Monday. The move is “in line with (an) OPEC decision to cut production,” the report said without providing further

• Russia sees oil output in 2009 falling to 1 percent, gas

    Russia will produce 1 percent more crude oil this year than in 2008 but natural gas production and exports will decline as a result of lower demand, the country’s foremost energy official said on Monday. Russian oil production in 2009 is expected to reach 493 million tonnes, reversing last year’s

• China November finished steel production is growing strongly

    China’s crude steel production in November totaled 47.2623 million mt,up 12.8558 million mt or 37.36 percent year on year.

• Ras Laffan LNG train 3 begins production

    Ras Laffan Liquefied Natural Gas Company Limited (3) (Ras Laffan 3) today announced the completion and start-up of Train 6 at Ras Laffan Industrial City, Qatar. The project is a joint venture of Qatar Petroleum (70 percent interest) and ExxonMobil Ras Laffan (III) Limited (30 percent interest) and represents an expansion of