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BG Group Q2 profit jumps on higher oil prices


BG Group reported second quarter 2011 pre-tax profits of US$2.06 billion an increase from US$1.5 billion a year ago, with the rise down to higher oil prices and increased production.

In a company statement, BG Group showed that revenue and other operating income for the quarter increased 26 per cent to US$5.12 billion from US$4.05 billion in the same quarter last year, “reflecting higher commodity prices and a three per cent increase in Exploration and Production, or E&P.”

Sir Frank Chapman, Chief Executive of the company said, "We made good progress in both our E&P and LNG businesses."

E&P production volumes increased 3 per cent to 58.9 million mmboe. Volumes were held back by a poor first quarter in which BG cut its full-year growth targets citing civil unrest in North Africa and flooding in Australia.

Revenues and other operating income surged 35 per cent to US$2.79 billion. In Liquefied Natural Gas (LNG) revenues and other operating income was US$1.81 billion, up 23 per cent from last year.

“In our LNG segment total operating profit for the second quarter was US$553mn, 2 per cent higher than last year. This result was ahead of our expectations due to a change in the phasing of trade for the year,” commented Fabio Barbosa, Chief Financial Officer

International gas price realisations were 17 per cent higher at 39.02 cents per produced therm, reflecting changes in the production mix and the effects of higher oil prices, the company stated.

BG Group talked about their Egypt operation. In May, the company and its partner sanctioned Phase 8b, the next phase of investment in the West Delta Deep Marine Concession (WDDM) offshore the Nile Delta. This is one of a series of investments to maintain production from this concession that supplies gas for domestic and export needs. Phase 8b will bring seven additional wells onstream, allowing BG Group to meet its contracted gas commitments.