BG Group profits rise but Egypt woes weigh

BG Group on Thursday reported a rise in profits driven by stronger gas prices and sales but warned of dipping production later this year and risks to its operations in Egypt.

BG, which counts on Egypt for about a fifth of its production, warned the future of its liquefied natural gas (LNG) production in the country was at risk as it continues to encounter difficulties in expanding and selling volumes.

“In the absence of concerted action from the Egyptian government, the future commercial operation of Egyptian LNG remains at risk,” it said in a statement.

Production in Egypt declined by more than half from a year earlier to 57,000 boed as a result of the depletion of the reservoir and as the local Egyptian market takes more supplies for which BG received lower payments.

Egypt has undergone a period of political and civil unrest since President Hosni Mubarak was ousted in 2011.

BG’s shares were trading 2.88 percent higher at 1.214 pence per share on the London stock exchange at 0715 GMT (8.15 a.m. BST).