BG boosts profits

British oil and gas firm BG Group today said profits gushed 28% higher in the third quarter after the price of oil hit record highs.

Reading-based BG banked £393m (€561.2m) in profits after receiving 32% more for each barrel of oil it sold during the three months to September 30.

There was also a sharp increase in profitability from liquefied natural gas (LNG) – a cleaner fuel that is seen as crucial to meeting the future energy needs of the UK and United States.

Rising margins helped to offset the impact of disruptions to production from maintenance work in the UK and problems at a Russian processing unit which receives fuel from BG’s field in Kazakhstan.

BG saw turnover rise 6% to £1.09bn (€1.6bn) in the third quarter and bottom-line profits lifted 34% to £215m (€307m) in spite of the weaker US dollar.

It followed oil giants Shell and BP in reporting bumper profits after the price of a barrel of crude climbed above $50 in September.

Chief executive Frank Chapman said: “The group is set for another year of excellent progress.”

BG was created in 1997 when British Gas shareholders approved the demerger and renaming of the former state-owned gas group’s retail arm, Centrica.

BG Plc was later renamed BG Group. The group’s distribution arm, Lattice, was later demerged and is now part of National Grid Transco.

The group has been investing heavily in LNG, where gas is cooled into a liquid to be transported by sea, and is jointly developing a terminal at Milford Haven in Wales to open in 2007.

Profits from the division were higher than expected by analysts, up 31% at £38m (€54.3m), scotching fears that producers were still struggling to generate sufficient returns from LNG.

In addition to Kazakhstan, the company is involved in projects in Trinidad and Tobago, Egypt, South America and India.