Gas firm BG plans increased production

UK gas firm BG Group gave a new lease of life to its North Sea operation today after pledging to increase production and target growth opportunities.

The former British Gas group said its strategy would push back the expected point of production decline in the North Sea beyond 2007.

The plans emerged as BG, which generates around half its business from the North Sea, announced a 36% improvement in underlying earnings for the final three months of 2004.

Despite the impact of a weaker dollar, the figure of £249m (€361m) helped full-year earnings to rise by 23% to £842m (€1.22bn).

Production volumes increased by 9% while the average realised oil price per barrel lifted 56% on a year earlier to $45.58 in the fourth quarter.

Chief executive Frank Chapman added that the group would now raise its previous projections for growth to the end of the decade and beyond.

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.