BG Group hails arrival of new boss Helge Lund as profits plummet

 
Caitlin Morrison
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Incoming chief exec Helge Lund, due to join BG in March, is expected to shake things up
Oil firm BG Group has reported a 26 per cent decline in operating profit for the third quarter of 2014, going from $1.8bn (£1.1bn) to $1.3bn.

The company attributed this decrease to significant profit reductions in Kazakhstan as a result of revenue falls, and in the UK as a result of the higher cost of new developments and shutdowns.

The reduction in operating profit in turn led to a 29 per cent fall in group earnings, down to $759m, and earnings per share.

The firm reported revenue of $4.6bn for the third quarter, up from $4.4bn posted for the same period of last year. Profit before tax was also up, increasing from $1.91bn to $1.99bn. However, production fell by two per cent to 569,000 barrels of oil equivalent per day (boed), in line with previous guidance.

The group said it would make no change to its guidance for 2014, which remained “at the lower end of the 590 to 630 kboed range”.

Andrew Gould, BG’s interim executive chairman, said: “We have made good progress with our key projects in the quarter and delivered a solid set of results.”

He also highlighted the recent appointment of Statoil’s Helge Lund as chief executive.

Commenting that Lund’s “track record in building a world class exploration and production portfolio speaks for itself”, Gould stated: “We believe we have the best person in the international oil and gas market to lead BG Group in its next phase of growth.”

Meanwhile, addressing the recent sharp fall in world oil prices, Simon Lowth, BG’s chief financial officer, said the company would wait until after Opec’s next meeting before taking any action. Lowth said: “So far we have felt very little impact, but we are running sensitivity tests and you can assume that as the price goes lower we will look at our debt coverage and look at the need to reduce expenses in the future.”

Shares in BG closed down 1.63 per cent yesterday.

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