BG again truly interested in exploration and LNG

BG Group PLc again much interested in LNG

BG Group PLc again much interested in LNG

It seems that BG Group Plc is ready to once again to concentrate on exploration and liquefied natural gas (LNG) as it wants to regain its investors’ favor. The company, which is the UK third largest natural gas producer, aims to engage its partners into investment as it will try to expand its operations.

BG’s strategy

BG Group Plc faced an unenviable situation as it lost the investors’ favor and trust due to a string of misfortunes, including substantial overruns it recorded in the past.  But it seems that the fortune one more time gives the UK third largest natural gas producer a chance.

On the 14th of May, BG Group Plc released its new strategy, underlining that according to its estimates, earnings would increase at faster rate than production. That would mean that shareholders might expect handsome dividends after all that time.

According to details, BG Group Plc will increase its spending on exploration to staggering $1.8 billion per year in the next three years. In 2012, the UK third largest natural gas producer spent only about $1.2 billion, thus the announced increase is indeed significant.  The investment strategy, which was presented by BG Group Plc, indicated that capital expenditure for the ongoing investment program would slump significantly to between $8 billion to $10 billion per year starting from 2015. As of yet, capital expenditure amounts to around $12 billion per year, according to the figures.

While presenting its new strategy, the company underlined that it was fully focused on meeting its 2013 targets. Chris Finlayson, chief executive officer at BG Group Plc, noted: “BG Group is a great company with a strong pipeline of projects and deep-set skills and expertise that differentiate us, particularly in exploration and LNG,” adding that the size of the company was its main strength which would lead to the future success.

In addition, the company also informed that it would boost its 2015 output as it aims to produce between 775,000 and 825,000 barrels of oil equivalent per day. As for 2013, the company estimates that its output target will range from modest 630,000 to approximately 660,000 barrels of oil equivalent per day.

Unquiet waters

Analysts note that BG Group Plc is entering unquiet waters as it aims to focus more on its oil and gas projects located in Brazil and Australia. The task is even more difficult as the UK third largest natural gas producer is currently witnessing a hard switch-over at the high level of management.

Indeed, these two projects look very lucrative. In Brazil, the UK company co-owns the Luna field which is estimated to be one of the richest deposits in the country.  It is worth reminding that BG Group Plc is the owner of other oil deposits in Brazil, just to mention the Sapinhoa field.

Interestingly, when it comes to BG’s plan for Australia, the company intends to start operating at its new facility starting from 2014. BG CEO Chris Finlayson, who has been at helm for about a year, underlined that the successful completion of the preparation stage might be regarded as a landmark in the company’s history.

With its high ambitions, BG Group Plc should be careful as it enters unquiet waters. Simply, the company has more modest means to handle critical situations, compared to its rivals – BP Plc or Royal Dutch Shell Plc. But the company is very positive about the future, highlighting that it is ready to face the music as it believes it would mange better its portfolio, including finding essential partners to bring better results.

Avatar
Anna Domanska
Anna Domanska is an Industry Leaders Magazine author possessing wide-range of knowledge for Business News. She is an avid reader and writer of Business and CEO Magazines and a rigorous follower of Business Leaders.

Recent Posts

Australia’s Officeworks stops sales of Apple’s AirTags on child safety concerns

Australia’s Officeworks stops sales of Apple’s AirTags on child safety concerns

Officeworks, the Australian office supply store chain, has pulled Apple’s newly launched AirTags from its store following safety concerns for children from its button battery
2 hours ago
Ex Google AI scientist joins Apple after resigning in protest for unfair practices

Ex Google AI scientist joins Apple after resigning in protest for unfair practices

Apple, Inc. has hired a former Google AI scientist who resigned in protest against the firing of two employees from the Ethics division. Sammy Bengio, the ex-Google employee, will
1 day ago
Solid Power raises $130 million in second funding round from Ford and BMW

Solid Power raises $130 million in second funding round from Ford and BMW

Solid Power, a solid-state battery system startup, has raised $130 million in Series B funding led by Ford Motor Company and BMW Group. The Louisville, Colorado-based SSB developer
1 day ago
Intel plans to invest $3.5 billion in New Mexico chip unit

Intel plans to invest $3.5 billion in New Mexico chip unit

Intel plans to invest $3.5 billion in its New Mexico factory as part of a plan to expand domestic manufacturing investments. This is one of the largest single investments by the co
2 days ago
Credit Suisse loses $5.4 billion in Archegos Capital collapse

Credit Suisse loses $5.4 billion in Archegos Capital collapse

Archegos is a family investment firm run by fund manager Bill Hwang, who borrowed billions of dollars from nine global banks to speculate on stocks. The implosion of the fund cause
2 days ago
Barclays sees triple net profit in latest quarter

Barclays sees triple net profit in latest quarter

Barclays PLC logged a stellar performance in its first quarter with net profit almost tripling on the back of a brighter economic outlook for both the UK and US. The stimulation pa
3 days ago