BG Group Profits Rise but Egypt Woes Weigh
LONDON, July 31 (Reuters) – BG Group beat forecasts with a rise in second-quarter profits on Thursday driven by stronger gas prices and sales but warned of dipping production later this year and risks to its operations in Egypt.
BG, which counts on Egypt for about a fifth of its natural gas production, warned that the future of its liquefied natural gas (LNG) production there was at risk as it continues to encounter difficulties in expanding and selling volumes.
"In the absence of concerted action from the Egyptian government, the future commercial operation of Egyptian LNG remains at risk," it said in a statement.
Production in Egypt declined by more than half from a year earlier to 57,000 barrels of oil equivalent per day (boed) as a result of the depletion of the reservoir and as the local Egyptian market took more supplies for which BG received lower payments.
Egypt has undergone a period of political and civil unrest since President Hosni Mubarak was ousted in 2011.
BG's shares were up 2.75 percent at 1.212 pounds per share at 0715 GMT, leading the London Stock Exchange along with Royal Dutch Shell. The oil and gas sector was up 2.2 percent.
BG's largest gas project, Australia's Queensland Curtis LNG production facility, remained within budget and on track to deliver first LNG in the fourth quarter of 2014, the company said.
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