BG GROUP yesterday abandoned its ambitions to become a one-million-barrels-a-day oil and gas producer by 2015 as it took further stock of setbacks that have hammered its share price in the past three months.
The company has been struggling to bring huge developments in Australia and Brazil onstream and shocked the market on 31 October when it forecast no output growth in 2013 due to project delays and a scaling back in United States shale gas activities as prices there fell.
New chief executive Chris Finlayson, announcing the first set of results under his stewardship, said yesterday that BG would not reach its output goal.
He also said production this year would be in the range of 630,000 barrels a day to 660,000, raising the possibility it could be lower than 2012’s 658,000.
In October, the group had predicted output would be flat this year and said it would sell a 40 per cent stake in part of its Queensland Curtis liquefied natural gas project to China’s CNOOC as it runs short of funds for development projects.
Its stock has fallen by almost a fifth since then. The group’s broader strategy is under review and an update is due in May.
The downgraded forecast highlights the scale of the task facing Finlayson, who joined BG from oil major Shell in 2010 and replaced long-standing chief executive Frank Chapman at the beginning of this year.
Santander analyst Jason Kenny said: “I think there’s an element of ‘kitchen-sinking’ with the new chief executive in play. A more conservative management style tempering all of the estimates as he starts out.”