BG Group, the exploration arm of the former British Gas, sold its majority stake in a Brazilian gas distribution business for $1.8bn (£1.1bn) as it unveiled a 21 per cent jump in first-quarter operating profits.
The group, whose chief executive is Sir Frank Chapman, said it was selling its 60 per cent stake in Comgas to Brazil's Cosan as part of a $5bn disposal programme to reduce BG's reliance on "downstream" activities, such as distribution and power generation, so it can increase its exposure to more lucrative "upstream" oil and gas exploration.
BG's strategy was given credence by the group's first-quarter profit growth, fuelled by high oil and gas prices and a 5 per cent rise in hydrocarbon production to 670,000 barrels of oil equivalent a day.
The company's liquefied natural gas (LNG) business also played a key role in BG's profits growth, with strong demand from Asia pushing the unit's first-quarter operating profit up by 42 per cent to $812m.
Spot prices in Asia, which buys the bulk of BG's LNG output, averaged $16 per million British therm unit in the first quarter of 2012, compared to $9.93 per million the year before.
Brent crude averaged $118.60 a barrel over the period, up 12 per cent from $105.43 last year.
Meanwhile, the average payment BG received per therm of gas (excluding LNG) increased 4 per cent to 41.15 cents, compared to the year earlier, despite prices tumbling by a third in the US over the period as the shale gas revolution greatly increased America's supply.
Although BG posted strong profits, its shares fell by 26.5p to 1,424.5p, as the group increased its estimate of the cost of a giant, new LNG project in Queensland, Australia – known as QCLNG – for the second time.Reuse content