BG sees no production growth next year

Surprising investors with quarterly results published a day earlier than scheduled,BG said production in 2013 would be unchanged from this year.

Analysts had been expecting BG,which competes with BP ,Shell and Total,to raise output as a result of huge projects in Australia and Brazil scheduled to gradually come on stream in the next three years.

The company’s target is to increase production to more than 1 million barrels of oil equivalent (boepd) per day by 2015 from a forecast year-end rate of 720,000 boepd.

BG blamed the expected lack of growth next year on delays to its Jasmin project in the North Sea,a continuing shut-down at its North Sea Elgin field,problems in Brazil and Egypt and a scaling back of activities in U.S. shale gas.

The latest setback comes after BG downgraded its year-end production rate forecast in July. It said that production growth in 2012 would be 3 percent.

BG posted a 16 percent rise in third-quarter earnings to $1.189 billion on production that was 5 percent higher and helped by a robust performance in its liquefied natural gas (LNG) business. That just beat analysts’ average forecast of $1.1 billion.

LNG Deal

BG agreed to sell a 40 percent stake in part of its Queensland Curtis LNG (QCLNG) project to China’s CNOOC on Wednesday. Analysts expect BG to sell stakes in its big projects to help fund their development.

The $1.93 billion deal includes a 20-year supply contract which BG said will make it the largest supplier of LNG to China.

Santander analyst Jason Kenney said part of the drop in BG’s share price was due to the fact that investors had been expecting BG to achieve a higher price for its QCLNG stake.

There’s a lot of value in the LNG supply contract in addition to the asset sale that maybe the market is just overlooking at the minute,he said.