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BG looks to a bright future despite losses

BG GROUP, the oil and gas major, said yesterday that profits had tumbled on the back of an energy price slump, but maintained the outlook for the immediate future was bright. <br /><br />Profits at the group, which had pleased investors with a string of recent discoveries in Brazil, fell to &pound;838m, including one-time items, for the three months to September, down from &pound;1.53bn the previous year. <br /><br />Profit for the first nine months of the year dropped to &pound;3bn from &pound;4.2bn.&nbsp; &ldquo;It&rsquo;s been a difficult year,&rdquo; chief executive Frank Chapman said.<br /><br />BG blamed a 41 per cent dive in oil prices and a 60 per cent drop in gas prices, as revenue and other operating income slipped 32 per cent to &pound;2.25bn.<br /><br />But Chapman stayed confident, saying operations in BG&rsquo;s integrated gas business and increasing production levels gave him&nbsp; &ldquo;confidence in the outlook for the group&rsquo;s performance&rdquo;.<br /><br />The group also said yesterday it would report results in dollars from next year, but that dividends would still be paid in sterling. <br /><br />BG missed forecasts for output due to a delayed project, but the resilience of its liquified natural gas (LNG) business boosted the company. <br /><br />Many industry executives in recent months have predicted weak gas prices and demand in the coming 18 months or more due to spare capacity created by the global economic crisis.<br /><br />However, chief financial officer Ashley Almanza said there were signs of recovery in Asia and Latin America.<br /><br />&ldquo;Large buyers are still showing good appetite for big volumes,&rdquo; he said.<br /><br />BG said it had sold around 60 per cent of its North Sea gas production at an average price of 40p per therm.