By Jon Yeomans: 30 Oct 2015
BG Group, which is due to be taken over by Shell early next year, has reported a slump in profits as the low oil price continues to take a toll on producers.
Net income at the Reading-based company fell 63pc to $280m (£182m) in the third quarter from $759m a year earlier. Nonetheless, this beat expectations, with some analysts pencilling in a result closer to $200.5m.
Including impairments, disposals and foreign exchange movements caused by the falling value of the dollar, BG recorded a loss of £101m.
Revenue fell 9pc to $4.15bn, reflecting “a significant fall in realised sales prices” – however BG said this was partly offset by higher production. Volume hit 716,000 barrels of oil equivalent per day (boed), up 26pc on the same period of 2014. The company now expects production for the full year to be 680-700,000 boed, higher than forecast.
Oil producers around the world are adjusting to low prices brought about by oversupply. Brent crude is trading at below $50 a barrel, down from over $90 a year ago.
“Our objective is to make sure we are resilient at current oil prices. We have to make sure we live within our means,” said Helge Lund, chief executive.
In line with its peers, BG is slashing capital expenditure – down 30pc year on year – and targeting $300m in costs savings this year.
“Production is up, capex is down, and our teams are delivering very well,” Mr Lund said.
The $70bn merger with Shell, agreed in April, was “on track”, having received antitrust approval from the European Commission in the quarter.
It still has to clear regulatory hurdles in China and Australia. An integration team has been working with Shell on forward planning and to ensure the two companies’ systems work together, Mr Lund said.
Shell, which reported a record quarterly loss yesterday, has said the deal will “springboard” it back to profitability.
The merger will boost Shell’s presence in the liquid natural gas market and give it access to BG’s oil resources in Brazil, although some analysts have questioned whether it still represents value for money.
Mr Lund, who only joined BG in February from Statoil, will leave the company once the merger completes. He attracted controversy on his appointment for the size of his pay packet, which BG later cut after pressure from investors.
“There’s only one thing on my horizon and that’s delivering a high-performing BG into the combined entity. I will think about next steps after that,” he said.
This website and sisters royaldutchshellplc.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.
Royal Dutch Shell conspired directly with Hitler, financed the Nazi Party, was anti-Semitic and sold out its own Dutch Jewish employees to the Nazis. Shell had a close relationship with the Nazis during and after the reign of Sir Henri Deterding, an ardent Nazi, and the founder and decades long leader of the Royal Dutch Shell Group. His burial ceremony, which had all the trappings of a state funeral, was held at his private estate in Mecklenburg, Germany. The spectacle (photographs below) included a funeral procession led by a horse drawn funeral hearse with senior Nazis officials and senior Royal Dutch Shell directors in attendance, Nazi salutes at the graveside, swastika banners on display and wreaths and personal tributes from Adolf Hitler and Reichsmarschall, Hermann Goring. Deterding was an honored associate and supporter of Hitler and a personal friend of Goring.
Deterding was the guest of Hitler during a four day summit meeting at Berchtesgaden. Sir Henri and Hitler both had ambitions on Russian oil fields. Only an honored personal guest would be rewarded with a private four day meeting at Hitler’s mountain top retreat.
IN JULY 2007, MR BILL CAMPBELL (ABOVE, A RETIRED GROUP AUDITOR OF SHELL INTERNATIONAL SENT AN EMAIL TO EVERY UK MP AND MEMBER OF THE HOUSE OF LORDS: 
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A head-cut image of Alfred Donovan (now deceased) appears courtesy of The Wall Street Journal.
