Business

BG Group shares dive on Egypt output warning

 

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 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.

'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.

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.

"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.

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