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BG sees profit of at least $2.3billion after oil-price slump

BG news
BG news

BG Group Plc, which agreed to be acquired by Royal Dutch Shell Plc last April, expects to report full-year profit of at least $2.3 billion after crude oil prices extended their decline.

That profit for 2015 included a post-tax gain of at least $600 million, the Reading, England-based company said on Wednesday. BG reported preliminary numbers before a shareholder vote on the merger takes place next week.

Oil’s collapse to a 12-year low has driven down profit and revenue at energy companies around the world and forced them to cut spending, write down the value of assets, defer and cancel projects and fire employees. BG, the U.K.’s third-biggest oil and gas producer, is one of the few companies where output is increasing, a boon for Shell.

BG shares rose 1.2 percent in London on Tuesday, trimming this year’s decline to 4.6 percent. BG will report final quarterly and full-year results on Feb. 5.

Brent crude averaged $44.69 a barrel in the fourth quarter in London trading, 42 percent lower than a year earlier. It dropped below $28 a barrel on Monday.

Chief executive Helge Lund said: “Our excellent operational performance in 2015 is expected to deliver results in line with, or ahead of, our guidance for the year. Ramp up of both LNG trains at our QCLNG project in Australia and the start-up of our sixth FPSO in Brazil drove a strong E&P operational performance while our LNG Shipping & Marketing business delivered 282 cargoes, an increase of 58% on 2014, in difficult market
conditions.”

The strong posting comes as Shell’s earning took a nose dive.

Shell’s fourth quarter earnings are expected to be between $1.6billion and $1.9billion – a steep slide from last year’s $3.3billion.

The firm also confirmed 10,000 job cuts comprised of both Shell and BG staff.

Read more here.

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