BG Group

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BG Group plc
Type Public limited company
Traded as LSEBG.
OTCQXBRGYY
Industry Oil and gas
Founded 1997 (Demerger of Centrica)
2000 (Demerger of Lattice Group from BG Group)
Headquarters Reading, United Kingdom
Key people Andrew Gould
(Interim Executive Chairman)
Products Crude oil, natural gas, petrochemicals
Revenue US$19.192 billion (2013)[1]
Operating income US$7.120 billion (2013)[1]
Net income US$2.450 billion (2013)[1]
Employees 5,713 (2012) [2]
Website www.bg-group.com

BG Group plc is a British multinational oil and gas company headquartered in Reading, United Kingdom.[3][4] It has operations in 25 countries across Africa, Asia, Australasia, Europe, North America and South America and produces around 680,000 barrels of oil equivalent per day.[5][6] It has a major Liquefied Natural Gas (LNG) business and is the largest supplier of LNG to the United States.[7] As at 31 December 2009 it had total proven commercial reserves of 2.6 billion barrels (410,000,000 m3) of oil equivalent.[8]

BG Group is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index. As of 6 July 2012 it had a market capitalisation of £44.9 billion, the seventh-largest of any company listed on the London Stock Exchange.[9]

History[edit]

Origins[edit]

The company was created in 1997 when British Gas plc divested Centrica[10] and became BG plc, which was reorganised in 1999 as BG Group plc.[11]

2000 to present[edit]

On 23 October 2000, a further demerger separated the company into Lattice Group and BG Group.[11] Lattice took ownership of Transco (the gas transporter for the UK), Advantica (gas engineering and consultancy specialist) along with the property and transport companies and BG Group took ownership of gas fields and other assets.[11] In 2002, Lattice merged with National Grid Company to become National Grid Transco which was renamed National Grid in 2005.[11]

In September 2007, BG Group delisted its ADRs from the New York Stock Exchange after expressing concerns over the tougher rules and high costs associated with the Sarbanes-Oxley Act.[12] Instead its shares began trading on the US over-the-counter market known as the Pink Sheets "International Premier QX".[13]

In June 2008 BG Group launched a US$13.1 billion hostile and ultimately unsuccessful bid to acquire Origin Energy, Australia's largest coal-seam gas producer; BG Group were outmanoeuvred by ConocoPhillips, who offered to invest US$9.1 billion in a joint venture with Origin.[14] In October 2008 BG Group agreed to buy Queensland Gas for US$3.4bn so enabling it to operate in Asia's liquified natural gas market.[15]

On 1 November 2010, BG Group Announced plans to invest £9.3bn on the world's first project to liquefy and ship gas produced from coal deposits. This will be the first in a series of "coal seam methane" projects in the region of eastern Australia and will be operational by 2014. BG Group will construct a 540 km underground pipeline in Queensland which will transport gas producing coal deposits to a terminal in Gladstone on the east coast.[16] In October 2011 BG Group signed an US$8 billion deal with Cheniere Energy to export liquefied natural gas from the United States.[17][18]

In October 2012, BG sold its 65% majority stake in Gujarat Gas Company for $470 million to the state-run Gujarat State Petroleum Corporation.[19]

In January 2014, BG Group announced the spudding of an oil exploration well offshore Kenya.[20]

Operations[edit]

The former President of Brazil Lula da Silva posing with the team responsible for the hypothetical discovery in the pre-salt area of the Tupi oil field.
BG Group Place in Houston, United States, the North American headquarters of BG Group.

BG Group's main business is the exploration and extraction of natural gas and oil and the production of liquefied natural gas. It sells these products to wholesale customers such as retail gas suppliers and electricity generating companies. It also owns some gas pipelines and is involved in some power generation projects. It is active around the world, with only a minority of its business being in the UK. BG Group is a multinational company with operations in 27 countries. Key areas for the company include:[21]

  • Australia
  • Brazil
  • Egypt
    • Operates the Rosetta and West Delta Deep Marine gas fields, LNG export
  • India
    • Interest in the Panna-Mukta and Tapti fields, and Mahanagar Gas Limited (a city gas distribution company operating in Mumbai).
  • Kazakhstan
  • Norway
    • Exploration licences with several discoveries
  • Thailand
    • Interest in the Bongkot gas field
  • Trinidad & Tobago
    • NCMA gas fields, Dolphin gas field, LNG export
  • Tunisia
    • Operates the Miskar and Hasdrubal gasfields
  • UK
    • Interests in several oil and gas fields in the UK continental shelf, including operating the Armada, Everest and Lomond gas fields and the Blake oil field, Interest in the Dragon LNG import terminal
  • USA

Senior management[edit]

Sir Frank Chapman was appointed Chief Executive of the BG Group in October 2000. His remuneration for this role in 2008 consisted of £1,081,588 base salary and a £1,944,000 bonus.[22]

Chapman stood down at the end of 2012 after 12 years as CEO, and was be replaced by Chris Finlayson, previously managing director for 'BG Advance', a business function within the Group. Chapman continued as an advisor to BG Group until he retired in June 2013.[23] Finlayson lost the confidence of the Board in 2014 and resigned, replaced by Andrew Gould.[24]

Controversy[edit]

RepRisk listed the BG Group as seventh in its top ten of "Most Environmentally and Socially Controversial Companies of 2010". Reasons for the company's inclusion are as follows. The BG Group were associated with deep-sea drilling plans in the Sicilian Strait. Karachaganak Petroleum Operating (KPO) consortium that includes BG was reportedly fined USD 21 million for environmental violations at the onshore Karachaganak Oil and Gas Field. BG subsidiary Queensland Gas Company's Queensland Curtis LNG Project had caused controversy in Australia. The exploitation of the Tarija natural gas reserves in Boliva where another BG subsidiary operated. The report also criticized the remuneration given to its chief executive who had received GBP 28 million in cash, shares and pension contributions in 2009.[25]:8

References[edit]

  1. ^ a b c "Preliminary Results 2013" (PDF). Retrieved 9 March 2014. 
  2. ^ "Sustainability Performance Report 2012". BG Group plc. Retrieved March 2013. 
  3. ^ "General contacts." BG Group. Retrieved on 5 November 2010. "Address: BG Group plc Thames Valley Park, Reading, Berkshire, RG6 1PT United Kingdom"
  4. ^ "Directions to BG Reading." BG Group. Retrieved on 5 November 2010. PDF Map.
  5. ^ "BG Group Profile". BG Group plc. Archived from the original on 17 August 2010. Retrieved 24 August 2010. 
  6. ^ "2010 Second Quarter & Half Year Results". BG Group plc. Retrieved 31 August 2010. 
  7. ^ "Liquefied Natural Gas – an enabling technology". BG Group plc. Retrieved 31 August 2010. 
  8. ^ "Annual Report and Accounts 2009". BG Group plc. Archived from the original on 21 December 2010. Retrieved 9 November 2010. 
  9. ^ "FTSE All-Share Index Ranking". stockchallenge.co.uk. Retrieved 26 December 2011. 
  10. ^ British Gas to split in February 1997[dead link]
  11. ^ a b c d "Competition Commission Report Page 313" (PDF). Archived from the original on 19 May 2011. Retrieved 18 April 2011. 
  12. ^ "Sarbos strikes again: BG to delist from NYSE". Itbusinessedge.com. Retrieved 18 April 2011. 
  13. ^ "Pink Sheets Press Release (25 September 2007): BG Group plc Joins International OTCQX". Findarticles.com. Retrieved 18 April 2011. 
  14. ^ "BG Group admits defeat in bid for Origin". International Herald Tribune. 29 March 2009. Retrieved 18 April 2011. 
  15. ^ "BG Group to buy Queensland Gas for $3.4bn". International Herald Tribune. 28 October 2008. Retrieved 18 April 2011. 
  16. ^ "BG invests £9.3bn in first of its kind LNG project". Added latest project details. Archived from the original on 4 November 2010. Retrieved 16 November 2010. 
  17. ^ "BG Group signs 'ground-breaking' $8bn gas deal with US". The Telegraph. 26 Oct 2011. Retrieved 2 November 2011. 
  18. ^ "Cheniere and BG ink $8 bln deal to export US LNG". Reuters. 26 Oct 2011. Retrieved 2 November 2011. 
  19. ^ Reuters (3 October 2012). "BG offloads Gujarat Gas stake for $470 mln". Reuters. 
  20. ^ BG Group and partners strike oil offshore Kenya, Africa: Oil Review Africa, 2014 
  21. ^ "Data Book 2010". Bg-group.com. Retrieved 18 April 2011. 
  22. ^ "Remuneration report". Annual Report & Accounts 2008. BG Group. Retrieved 23 August 2009. 
  23. ^ "BG names industry veteran Finlayson as CEO". Reuters. Reuters. 13 December 2012. Retrieved 13 December 2012. 
  24. ^ "No 'sacred cows’ as BG considers asset sell-off". The Telegraph. 1 May 2014. Retrieved 19 May 2014. 
  25. ^ Karen Reiner (December 15, 2010). "Most Environmentally and Socially Controversial Companies of 2010". Zurich: RepRisk. Retrieved 19 May 2014. 

External links[edit]