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BG Group shares dive on Egypt output warning | BG Group shares dive on Egypt output warning |
(35 minutes later) | |
Shares in UK oil and gas firm BG Group have plunged almost 15% after it warned continuing problems in Egypt would hit production this year and in 2015. | Shares in UK oil and gas firm BG Group have plunged almost 15% after it warned continuing problems in Egypt would hit production this year and in 2015. |
It expects to produce 590,000-630,000 barrels of oil equivalent per day this year, at least 5% below forecast. | It expects to produce 590,000-630,000 barrels of oil equivalent per day this year, at least 5% below forecast. |
It said Egypt was using more gas for its domestic market than had been agreed, leaving less for export. | It said Egypt was using more gas for its domestic market than had been agreed, leaving less for export. |
It has issued a Force Majeure in the country, a sign to investors of circumstances beyond its control. | It has issued a Force Majeure in the country, a sign to investors of circumstances beyond its control. |
'Uncertainty' | 'Uncertainty' |
"We face short-term issues which are reflected in our revised 2014 guidance. This is very disappointing," BG's chief executive Chris Finlayson said. | "We face short-term issues which are reflected in our revised 2014 guidance. This is very disappointing," BG's chief executive Chris Finlayson said. |
BG counts on Egypt for about a fifth of its production. | BG counts on Egypt for about a fifth of its production. |
The firm said there was "continued uncertainty" over the level of future diversions to the Egyptian domestic market. | The firm said there was "continued uncertainty" over the level of future diversions to the Egyptian domestic market. |
"BG Group... will continue to negotiate with the Egyptian authorities and other stakeholders to seek a long term solution," it added. | "BG Group... will continue to negotiate with the Egyptian authorities and other stakeholders to seek a long term solution," it added. |
BG also cut its 2015 guidance to between 710,000 and 750,000 barrels of oil equivalent per day, lower than the 775,000 to 825,000 target issued in May. | |
BG also said its guidance had been hit by lower-than-expected gas prices in the US. | BG also said its guidance had been hit by lower-than-expected gas prices in the US. |
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