BG Group profit hit by North Sea tax

Civil unrest in North Africa and floods in Australia conspired to hit British gas and oil producer BG Group's profit in the first quarter and forced it to cut its output growth forecast for this year.

Underlying pre-tax profit fell eight per cent, the company said in an update that missed forecasts and knocked 3.4 percent off the company's shares.

BG said its profit excluding non-cash accounting charges fell to £616.83m.

The company said gas and oil production fell five per cent due to field maintenance and the impact of the civil disorder in Egypt and Tunisia, among the countries where it operates.

BG said extensive flooding in Queensland, Australia, where it produces gas, also weighed on output.

Chief Executive Frank Chapman said the company now only expected modest production growth in 2011. Previously, BG had indicated seven per cent per annum long-term growth.

"The plans for a ramp-up in production in 2012 and 2013, as well as our 2020 goals, are unaffected," he said.

Analysts at Bernstein, who described the results as a "messy miss", said they still forecast 2001 growth of 3.5 per cent, 12 per cent in 2012 and, on average, 14 per cent each year from 2010 to 2015.

An increase in British North Sea taxes also hit profit. Stuart Joyner, oil analyst at Investec, said he had reduced his estimated 2011 earnings per share by ten percent following a review of the statement and incorporating the impact of the UK tax hike.