BG Group says it expects to bring the Lomond field in the North Sea back online in the next few weeks as it looks to bounce back from a 10% production drop over the last three months.
The gas exploration giant said its planned maintenance programme was almost complete, with Lomond the last platform to restart, while the Jasmine field was closing in on its final stages of commissioning.
But the ongoing crisis in Egypt, where a fifth of the company’s output comes from, has left BG Group putting on hold funding for the next stage of its projects there.
The company saw earnings down 4% to $1.1billion for the three months to September, while operating profit fell 15% to $1.8billion. Higher operating costs and lower gas volumes brought the figures down, although earnings beat analysts expectations.
“The primary driver for the decline in Upstream volumes is the US, where BG Group has reduced its rig count in line with its strategy of pursuing value over volume,” said chief executive Chris Finlayson.
“We will see production recover in the fourth quarter with the completion of our North Sea maintenance shutdowns and new projects coming onstream, most notably Jasmine.”
The company is owned more than $1billion by the Egyptian government for domestic gas sales, with work on the West Delta Deep marine project delayed and more than 100 staff pulled from the country over safety fears after civil disruption earlier this year.
The situation remains ‘difficult’, admitted Finlayson, even as gas demand increased in the country.
“During the third quarter, domestic offtake was higher than expected, averaging almost 1 bcf of gas per day, which was partially offset by receipt of compensatory LNG cargoes from Qatar,” he said.
“In October, domestic gas offtake reduced, with current rates at 700 to 750 mmscfd. The Egyptian government has stated that the domestic offtake will remain around this level during the final quarter. Further assurances regarding future domestic offtake levels and a material improvement in the outstanding debt position are required before releasing funds for the next phase of development.”
The Jasmine discovery, nine-miles east of the North Sea Judy platform and thought to contain up to 170million barrels of oil equivalent, had been hit by delays but the company said it now expected the field to start up by the end of the year.
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