Despite higher operating costs, BG Group (BG.) turned in half-year numbers ahead of market expectations, with adjusted operating profits up 4 per cent to $3.8bn (£2.2bn). Revenues rose on the back of increased volumes of liquefied natural gas delivered to customers, together with higher realised prices in Asia and South America. Receipts were also helped by a marked increase in the proportion of crude oil in BG’s production mix. This was partly attributable to the ramp up in production at the giant Sapinhoa field in Brazil, which is nearing capacity at 120,000 barrels of oil equivalent per day (boepd).
But all is not well. In particular, the continuing political and economic strife in Egypt casts a pall over prospects for the group. BG relies on its Egyptian assets for roughly a fifth of its natural gas production, but it was forced to declare force majeure on its operations in the country after local authorities diverted its gas for use in Egypt’s domestic market. And, if anything, matters appear to be deteriorating. Production from Egypt has contracted by more than half from the 2013 interim stage, and by 14 per cent between the first and second quarters of this year.