Oil and gas market tightens

BG Group's FPSO Cidade de São Paulo. Photo courtesy of BG Group
BG Group's FPSO Cidade de São Paulo. Photo courtesy of BG Group

Tougher times in the oil and gas industry have been confirmed by the release of trading statements from two leading players in the market this morning.

 

The UK’s BG Group, the country’s third biggest energy company, that grew out of the former British Gas, reported a bigger than expected fall in its third quarter operating profit as production declined in Egypt and oil prices continued to fall.

 

Crude oil prices have now fallen by around 25% in recent months due to falling global demand and oversupply. BG’s share price has fallen by some 30% this year.

 

BG reported operating profit of US$1.3Bn against a consensus forecast from analysts of £1.4Bn. Production from Egypt fell 50% due to a depleting reservoir. Third quarter revenues however rose four per cent to $4.6Bn as more costly production came on stream in Brazil and Australia, with Brazil producing over 100,000 barrels of oil equivalent a day.

 

The company is undertaking a radical asset review to identify projects that are weighing on its financial performance, and other oil companies are also looking for cost cutting opportunities as oil prices fall.

 

Norway’s Fred Olsen Energy also reported below expected third quarter profits and warned that the global rig market will face lower demand and over supply as companies cut activity and new rigs continue to enter the market. Day rates have fallen in all market segments and a growing number of idle rigs can be seen, particularly in international midwater and deepwater markets, the company said.

 

Olsen’s operating profit fell by over 80% to US$15.4M and the share price is down by some 65% this year.

Please rate

Comments 

Name
Email
  Ctrl + Enter

Most Read

Turner & Townsend wins £23.3m Lower Thames Crossing contract

Turner & Townsend wins £23.3m Lower Thames Crossing contract

The award of the commercial partner marks the completion of the Lower Thames Crossing integrated client team, comprised of National Highways, a technical partner, and an integration partner.   The eight-year contract will see Turner & Townsend work as part of National Highways

HS2 prepares to host biggest ever ‘Meet the Contractor’ event

HS2 prepares to host biggest ever ‘Meet the Contractor’ event

Businesses from across the UK are being invited to register to attend the online meet the contractor event, and snap up the opportunity to participate in one-to-one meetings with HS2’s contractors. HS2 will be offering meetings with Tier 2 contractors, providing even more opportunities

One year on: HS2 reaches 20,000 jobs landmark

One year on: HS2 reaches 20,000 jobs landmark

Companies right across the country are now forming part of HS2’s ever-growing supply chain. Contracts have already been awarded to over 2,200 businesses, 97% of which are UK-based.   HS2’s jobs boost is also benefitting those in need, with bespoke initiatives designed to

This website uses cookies to enhance your user experience. By continuing to use this site, you consent to our use of these cookies. See our Cookie Policy.