BG keeps a nervous eye on Egypt as profits dip

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Oil and gas firm BG Group is keeping further investments in Egypt under review amid a period of civil unrest in the country, which accounts for about a fifth of its production.

The ousting of president Mohammed Morsi by the military earlier this month and the fact that BG is owed $1.3 billion (£845 million) by Egypt for domestic gas sales have heightened the company’s anxieties.

Chief executive Chris Finlayson said events in Egypt were a “primary concern” for the group, which is watching developments closely. State media reported yesterday that Morsi is under investigation for an array of charges, including murder.

Finlayson added: “The environment for investment in Egypt is clearly challenging.”

He was speaking as the group posted a 3 per cent dip in second-quarter profits to $986m. Production dropped 3 per cent in the first six months of the year.

Charles Stanley analyst Tony Shepard said: “Overall, first-half production was as expected and, after the summer maintenance season, production should begin to show a year-on-year increase in the fourth quarter.”

Despite the dip in earnings, BG said shareholders will receive an interim dividend of 8.51p a share on 6 September, up 10 per cent on last year’s payout.