BG Group CEO sees no further disappointment on Egypt gas output
BY SELINA WILLIAMS
LONDON -- No further surprises or disappointments in output are expected at a BG Group gas field in Egypt, which was one factor behind a surprise production downgrade last year that caused a plunge in the company's share price, CEO Chris Finlayson said.
He said production at BG Group's West Delta Deep Marine concession offshore the Nile Delta was coming in where anticipated and that further volumes would be added next year as new wells being drilled were connected.
"When we talked last year about the reduced level of production in Egypt, what I can say now is we have no further surprises against that, Egypt has been producing exactly in line with what we anticipated and talked about at the end of last year" Mr. Finlayson told reporters on a conference call.
Last October, BG Group said its oil and gas production for 2013 would fall well short of analysts' expectations because of problems at fields in the United Kingdom, Egypt and Brazil, and low United States natural gas prices. At the time, BG Group cited a disappointing outcome from technical work that was supposed to arrest the decline of WDDM as the issue in Egypt.
In February, BG Group said the lower production forecast for this year had also pushed out its 2015 target.
The big change to BG Group's growth outlook, previously the best among large oil and gas companies, was a huge shock to the market and the company's shares are now around 15% lower than they were in October before the downgrades were announced.
In February, BG Group approved the next phase of development for WDDM. The 9a development is one element of the recovery plan to halt decline in the concession. Drilling has now started with first production scheduled for 2014, Mr. Finlayson said.
Dow Jones Newswires