Oil and gas company BG Group said yesterday it had revised its production target for 2015 to 775,000-825,000 barrels of oil equivalent (boe) per day, down by around 20% on its previous target.
The group’s new chief executive Chris Finlayson, who took over at the start of the year, also laid out the firm’s future strategy.
With the company facing production challenges in Egypt and costly investments in Brazil and Australia, Mr Finlayson said the firm planned to focus on discovery and development projects in upstream oil and gas and in liquefied natural gas (LNG).
Exploration spending over the next three years was expected to be £1.2billion a year.
Higher margins were also targeted, with plans to treble the production of barrels producing cash margins of $50-plus.
Mr Finlayson said: “In a period where LNG demand is expected to grow twice as fast as overall gas demand, BG Group is well positioned to capitalise on this growing market.”
BG, which is strongly focused on gas, is also increasing its exposure to oil through its portfolio of reserves in Brazil’s Santos Basin. Mr Finlayson added: “We are making good progress with the execution of the (Brazilian) programme and, as our knowledge of these giant fields grows, we expect further development phases to accelerate production and increase recovery.”
The group said earlier this month it had achieved better-than-expected post-tax profits of £762million in the first three months of the year, ahead of consensus forecasts of £707million but 3% lower than the same period last year.
The drop in earnings was a result of a 3% dip in production because of the North Sea Elgin-Franklin field being closed for part of the quarter and difficulties with output in Egypt.
BG also has a 21.73% interest in the Nexen-operated Buzzard field in the Outer Moray Firth.
Austrian oil, gas and power firm OMV said yesterday production in the first quarter of the year had increased despite North Sea asset sales.
The company said daily output in the first three months of the year was 302,000 barrels of oil equivalent, up 1% on the same period last year.
OMV said production lost after selling a 5% stake in the Beryl North Sea field for about £75million had been offset by rising output in Libya and Yemen.
Chief executive Gerhard Roiss said: “In the first quarter of 2013, we again showed a strong operational performance and continued to deliver on our strategy.
“We managed to increase production . . . in spite of the divestments in the UK North Sea and production at Schiehallion being suspended in order to progress the field redevelopment.”
OMV said turnover in the quarter was up 4% to £9.2billion, while earnings before interest and tax rose 38% to £1billion.
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