Gas exploration giant BG Group insisted it was making ‘good progress’ despite seeing earnings drop 3% to $986million for the second quarter of the year.
The company saw a 2% decline in production. with a planned shutdown and restart at the giant Karachaganak field in Kazakhstan and operations in the USA scaled back.
Liting costs in the UK were impacted by the grounding of the Eurocopter fleet, while higher than expected costs came in for repairs to the Everest and Lomond operations.
Disruption from Nigeria and Egypt hit production, but the company said it was not changing its profit guidance for 2013 despite the problems.
“In the second quarter, earnings were down 3%, reflecting lower volumes and higher unit operating and depreciation costs in the Upstream segment,” said chief executive Chris Finlayson.
“Both of these costs are expected to be around 50 cents per boe higher for full-year 2013 than originally forecast
“We have delivered the five key milestones promised for the first half of the year and also continued to de-risk the five remaining for the second half.
“At the same time, we have continued to progress with our major growth projects, in the Santos Basin offshore Brazil and QCLNG in Australia, which are both on track.”
Up to 20% of BG Group’s output comes from Egypt, with the company now owed $1.3billion by the Egyptian government for domestic gas sales, leading to concerns by the firm in the wake of the military coup and ongoing unrest in the country.
“Events in Egypt remain a primary concern and will continue to be so as the political, social and business environment evolves,” said Finlayson.
“While our offshore operations continue unaffected, higher than agreed gas volumes were diverted into the Egyptian domestic market during the quarter, impacting volumes available for LNG export. An agreement between Egypt and Qatar for an initial five compensatory LNG cargoes, with two allocated to BG Group, is a positive development.”
BG said its work in Brasil’s Santos basin was continuing to make progress, with excellent results being produced this month at Iara.
“Test results from our fourth appraisal well at Iara have shown excellent reservoir deliverability characteristics, significantly better than the Iara discovery well,” said FInlayson.
“These results are very positive for potential recoverable reserves and resources in Iara, which has oil in place comparable to Lula. The next two FPSOs due to start in 2014 are progressing well, with one already in Brazil for topsides integration.
“We are delighted to have won 10 offshore blocks in the Barreirinhas Basin, along the northern coastline, which we expect to expand further our inventory of high-impact exploration opportunities.”