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BG Group blames T&T for shortfall
British oil and gas company the BG Group said lower margins from its operations in T&T is among the factors contributing to its gloomy outlook for 2014. In a statement this week, the energy giant said other causes were the ongoing turmoil in Egypt and shortfalls in US production. Following the news, BG’s stocks took a hit on the London Stock Exchange, losing more than £6 billion of its value.
The BG Group said in its release: “The contributions from the group’s growth assets are expected to be offset by reductions in Egypt. Additionally, the continued low rig count in the US will result in a volume decline similar to 2013. Overall, volumes from other base assets are expected to be broadly flat. Production will grow in the UK despite a slower ramp up at Jasmine along with a longer planned shutdown at Buzzard, and also in Norway and Bolivia.
“However, this is expected to be offset by declines to the rest of the base, notably in Trinidad and Tobago, where expected production sharing contract (PSC) production entitlement has been reduced due to higher realised prices in 2013.” The term “realised prices” is oil industry jargon for the final selling price of the oil produced.
BG Group said its “production volumes are expected to be in the range of 590 – 630 thousand barrels of oil equivalent per day (kboed) with base assets contributing in the range of 480 – 520 kboed, excluding portfolio changes”. This year, unit operating expenditure is expected to be in the range of US$15.50 - US$16.25 per barrel of oil equivalent (boe) at reference conditions, up from the US$12.17 per boe expected to be reported for 2013 full-year upstream results.
The BG Group reported total production from its T&T operations in 2013 to be 25.6 million barrels of oil equivalent per (mmboe), down from 26.8 mmboe in 2012. Its T&T rate of production fell from 73 kboed in 2012 to 70 kboed in 2013.