Up, up and away
BG Group profits rise as Shell merger nears
BG GROUP has reported a return to profit in its final results ahead of its landmark merger with Shell.
FTSE 100-listed BG is due to be absorbed into the Anglo-Dutch giant by the middle of the month after its shareholders voted overwhelmingly in favour of a £40bn takeover.
The firm’s better-than-expected results stand in contrast to a string of dismal financial reports from major oil majors this week, including an 80pc profit plunge from Shell.
Analysts at Bernstein said BG’s portfolio will “contribute positively” to the merger, making the new company one of the investor’s top picks in the sector.
In its last year as a standalone company, BG managed to limit the impact from plunging oil prices to a 16pc drop in revenue for the year, racking up sales of $16.2bn. It disclosed a pre-tax profit for 2015 of $2.98bn, compared with a $2.3bn loss the previous year. It also grew its output by 16pc, beating its own forecasts by producing 704,000 barrels of oil equivalent per day. BG was helped by a ramp-up in its oilfields in Australia, Brazil and Norway.
BG boss Helge Lund, who will step down on completion of the merger, said the group had delivered “an excellent operational performance” in 2015, ahead of market expectations.
“The ramp-up of both liquefied natural gas (LNG) trains at our QCLNG project in Australia and the ramp-up in Brazil drove a strong exploration and production operational performance.”
LNG is a form of gas that is converted into liquid for transport. BG’s expertise in this field, and its offshore assets in Brazil, are among the reasons why Shell is acquiring the company.