BG cheered by production boost

Oil and gas explorer BG Group said today higher gas prices and increased production levels around the world had helped boost profits.

The Reading-based firm said pre-tax profits in the three months to September 30 rose 31% to £723 m (€1bn) compared to the same period last year.

It enjoyed a 23% boost in third quarter revenues to £1.6bn (€2.39bn) as greater volumes of oil were pumped from operations in Egypt and Trinidad & Tobago.

BG produced 50.6 million barrels during the quarter compared to 41.2 million in 2005, which is the equivalent of 550,000 barrels each day.

Chief executive Frank Chapman said: "These results reflect a strong operating performance. In addition, our key projects continued to make good progress, we saw significant exploration success and continued to strengthen the portfolio of future opportunities."

BG pointed to the discovery of the Jasmine gas field in the North Sea, which it thinks will serve up 275 million barrels once pumping is started.

Meanwhile, the company is also hopeful of getting its Buzzard oil field - also in the North Sea about 100 kilometres from Aberdeen - up-and-running in the next quarter.

It has discovered oil in Brazil's Santos Basin and is working on a gas field in Algeria, while contracts have also been signed with the Bolivian Government.

The average price for a barrel of oil during the quarter was $71.43 during the period, compared to $63.02 US last year, while gas edged from 20.1p per therm to 25.5p.

BG has been eyed as potential takeover fodder for the likes of CNOOC, the Chinese state-owned oil group, as well as Royal Dutch Shell.

An analyst at Dresdner Kleinwort described the results as "good, but not outstanding". A note from DK added: "BG should be bought because of its financial performance and not because it is a takeover candidate."