Shares in BG Group fell by 14 per cent to hit a two-year low yesterday after the gas producer that was spun out of British Gas admitted that its 2013 production forecasts were wrong and told the City not to expect any growth next year.
Surprising investors by publishing quarterly results a day earlier than scheduled, BG said it expected 2013 output to be unchanged from this year, against City predictions of production growth of 10 per cent or more.
The explorer said it had fallen victim to a series of delays to projects in the North Sea, Brazil and Egypt which meant oil and gas production would be running at just 660,000 barrels of oil equivalent a day at the end of 2012, compared with its target of 720,000 barrels.
BG Group did manage a 16 per cent rise in third-quarter profits to $1.9bn, with production up 5 per cent compared with the same period last year. But it said it was held back in the third quarter by the shutdown of the North Sea Elgin/Franklin field in which it has a 14 per cent stake, and its decision to scale back drilling in the US because of low natural gas prices. BG is also being hit in Brazil, its major focus, where the operator and state oil company Petrobras wants to perform engineering work that involves some of BG's fields.
"As a result of these factors, along with the deferral of the Jasmine start-up [in the North Sea] to 2013, production growth in 2012 of some 3 per cent is now forecast," BG said. However, it said production plans beyond 2013 were unchanged.