BG Group making good progress

BG_GroupBG Group provided an update on its strategy in the gas and LNG market which will help the company achieve its goals.

The company's Chief Executive Sir Frank Chapman said in a company statement : "The outlook for global gas and LNG demand is strong. BG Group is well set to capitalise on these opportunities and is making good progress with delivering its plans."

Key elements

Outlining some key elements, Sir Frank continued, "not only is our LNG supply set to exceed our 2015 target of 20mn tonnes per annum (mtpa), but we believe that a BG Group supply portfolio of 30 mtpa by 2020 is now within reach. The near-term picture is also very positive and we are raising our LNG profit guidance for 2012 by over 30 per cent to between US$2.6 and US$2.8 billion. Our LNG business is set with the prospect of excellent profit momentum for many years.

Exploration and appraisal

Sir Frank added, "in exploration, independent analysis continues to show BG Group as one of the industry's leading explorers over the last decade. In 2011, exploration and appraisal activity added another billion barrels of oil equivalent (boe) to our resource base. Our reserves and resources now stand at 17.1 billion boe - that's 73 years production at 2011 levels. In 2012, we'll invest $1.5 billion in our exploration programme, targeting prospects in seven countries including new frontier plays in Australia, Egypt and Tanzania."

Outlook on expectations

On production, Sir Frank gave an outlook on expectations saying, "in 2012, our base assets will continue to make a material contribution bolstered by new production due onstream in Bolivia, Egypt, Thailand and the UK. In terms of production for this year, we start the year with a production run rate of some 650 000 boe per day (boepd) and we expect to exit the year with a rate of some 750 000."

Funding and investment

On funding and investment plans Sir Frank said, "in actively supporting and managing the progress of our growth programme, we raised US$5.6 billion from the bond markets last year, increased our undrawn committed facilities to US$4.5 billion and signed a memorandum of understanding with the Bank of China for up to US$1.5 billion of potential funding support."

"In addition to this, we are planning to release some US$5 billion over the next one to two years with the continuing execution of our portfolio rationalisation programme. Over 2012-13, capital expenditure - on a cash basis - is expected to be US$22 billion with non-cash items amounting to US$2.3 billion."

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