BG gets boost with $350m payment from Egypt

Oil and gas exploration firm BG Group received a boost yesterday as it revealed the Egyptian government had paid it $350 million (£225m) as the state seeks to repay outstanding debts to the energy industry.

BG chief executive Helge Lund
BG chief executive Helge Lund

The group also said it was “working with the government on resolving the outstanding receivable balance” of $920m.

It comes after a year in which UK-based BG has been dragged down by problems in Egypt as well as the tumbling oil price, and been hit by controversy over pay plans for its new chief executive.

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A year ago, the firm slashed production targets on the back of continued difficulties in the north African country. It said too much of its gas was being diverted into Egypt’s domestic market instead of being made available for exports.

But in its latest update yesterday, BG noted: “While the group has been impacted by the reduction of LNG [liquefied natural gas] exports from Egypt, the company continues to investigate options for increasing the supply of gas.”

The update provided some stability to the group’s shares on the first day of stock market trading of the new year, following a dismal performance in 2014 which saw it shed about a third of its value.

BG has been hit by the collapse in the oil price which has halved since the summer with a barrel of Brent crude now trading below $60 a barrel. In November, the firm reported a 29 per cent fall in third-quarter earnings to £759m.

The company was created in 1997 when British Gas demerged into two separately-listed companies, with Centrica having responsibility for the retail side of the business (it trades as Scottish Gas north of the Border).

Last month, BG sidestepped a potential shareholder revolt over a £15m “golden hello” for its new boss Helge Lund by announcing a revised package.

Lund will instead receive total awards worth up to £14m, but under more stringent performance criteria. This is in addition to his annual pay package of up to £14m a year. He is due to take over as chief executive in March.

• Meanwhile, Aggreko, the Glasgow-based temporary power and cooling specialist, said yesterday that Chris Weston had officially assumed his position as its new chief executive. He previously headed the international downstream operations at Centrica.

Weston’s appointment was unveiled in May last year in the wake of Rupert Soames’s departure to outsourcing giant Serco.

Aggreko said its new boss would spend his first few months meeting employees and other key stakeholders, “in order to understand the business and its fundamentals”.

Weston said: “I am very excited to be joining Aggreko. It is a fascinating business with a great ­product, fantastic culture and attractive markets.”