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BG Group

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BG Group plc
Company typePublic
LSE: BG.L
IndustryOil and gas
Founded1997; 27 years ago (1997) (Demerger of Centrica)
2000 (Demerger of Lattice Group from BG Group)
DefunctFebruary 15, 2016 (2016-02-15)
FateAcquired by Royal Dutch Shell
HeadquartersReading, United Kingdom
ProductsCrude oil, natural gas, petrochemicals
RevenueUS$19.289 billion (2014)[1]
US$6.155 billion (2014)[1]
US$(1.044) billion (2014)[1]
Number of employees
5,200 (2015)[2]
ParentShell plc
Websitewww.bg-group.com Edit this on Wikidata

BG Group plc was a British multinational oil and gas company headquartered in Reading, United Kingdom.[3][4] On 8 April 2015, Royal Dutch Shell announced that it had reached an agreement to acquire BG Group for $70 billion, subject to regulatory and shareholder agreement. The sale was completed on 15 February 2016. Prior to the takeover, BG Group was listed on the London Stock Exchange (BG.L) and was a constituent of the FTSE 100 Index. In the 2015 Forbes Global 2000, BG Group was ranked as the 583rd largest public company in the world.[5]

Prior to its acquisition by Shell, BG Group had operations in 25 countries across six continents and produced around 680,000 barrels of oil equivalent per day.[6][7] It had a major liquefied natural gas (LNG) business and was the largest supplier of LNG to the United States.[8] As at 31 December 2009, it had total proven commercial reserves of 2.6 billion barrels (410,000,000 m3) of oil equivalent.[9]

History

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Origins

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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 2016

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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.[12] Instead its shares began trading on the US over-the-counter market.[13]

In June 2008, BG Group made a US$13.1 billion bid to acquire Origin Energy, Australia's largest coal-seam gas producer, but were outmanoeuvred by ConocoPhillips, who offered to invest US$9.1 billion in a joint venture with Origin.[14] However, in October 2008, BG Group bought Queensland Curtis LNG for US$3.4bn in order to operate in Asia's liquefied natural gas market,[15] and 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 – the first in a series of "coal seam methane" projects in the region of eastern Australia; by late 2014, this was sending gas produced from coal deposits by pipeline to a terminal in Gladstone on the east coast.[16] In October 2011, BG Group signed a 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 initial drilling of an oil exploration well offshore in Kenya.[20]

In April 2015, Royal Dutch Shell announced that it had reached an agreement to acquire BG Group for $70 billion, subject to regulatory and shareholder agreement. The deal gave BG shareholders 19% of the combined group, and gave Shell extensive access to BG's LNG assets, accelerating its global LNG and deep water strategy.[21][22] Finalisation of the BG acquisition by Royal Dutch Shell was completed on 15 February 2016.[23]

Operations

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Launch ceremony for oil platform P-52, which operates in the Campos Basin.
BG Group Place in Houston, United States, the former North American headquarters of BG Group.

BG Group's main business was the exploration and extraction of natural gas and oil and the production of liquefied natural gas. It sold these products to wholesale customers such as retail gas suppliers and electricity generating companies. It also owned some gas pipelines and was involved in some power generation projects. It was active around the world, with only a minority of its business being in the UK. BG Group was a multinational company with operations in 27 countries. Key areas for the company included:[24]

  • Australia
    • QGC, coal seam gas upstream plays in Queensland's Surat and Bowen basin, and Curtis Island based LNG plant
  • Brazil
  • Egypt
    • Operates the Rosetta and West Delta Deep Marine gas fields, LNG export
  • India
  • 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 gas fields
  • 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

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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.[25]

Chapman stood down at the end of 2012 after 12 years as CEO, and was 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.[26] Finlayson lost the confidence of the Board in 2014 and resigned, replaced by Andrew Gould.[27]

On 15 October 2014, the company announced that Helge Lund, former CEO of Statoil, would become CEO.[28][29] Lund left the company on 15 February 2016, following successful completion of the Shell acquisition and was replaced by a Shell appointed transition CEO.[30]

Controversies

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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 US$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 Bolivia 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.[31]: 8 

References

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  1. ^ a b c "Preliminary Results 2014" (PDF). BG Group. Archived from the original (PDF) on 26 February 2015. Retrieved 15 March 2015.
  2. ^ "BG Group at a glance". BG Group plc. Retrieved 15 March 2015.
  3. ^ "General contacts Archived 21 October 2010 at the Wayback Machine." 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 Archived 5 October 2010 at the Wayback Machine." BG Group. Retrieved on 5 November 2010. PDF Map Archived 22 December 2010 at the Wayback Machine.
  5. ^ "Forbes Global 2000". Forbes. Retrieved 30 July 2020.
  6. ^ "BG Group Profile". BG Group plc. Archived from the original on 17 August 2010. Retrieved 24 August 2010.
  7. ^ "2010 Second Quarter & Half Year Results" (PDF). BG Group plc. Archived from the original (PDF) on 21 December 2010. Retrieved 31 August 2010.
  8. ^ "Liquefied Natural Gas – an enabling technology". BG Group plc. Archived from the original on 7 June 2010. Retrieved 31 August 2010.
  9. ^ "Annual Report and Accounts 2009" (PDF). BG Group plc. Archived (PDF) from the original on 21 December 2010. Retrieved 9 November 2010.
  10. ^ "British Gas to split in February 1997". Archived from the original on 20 February 2009. Retrieved 10 August 2008.
  11. ^ a b c d "Competition Commission Report Page 313" (PDF). Archived (PDF) from the original on 19 May 2011. Retrieved 18 April 2011.
  12. ^ "Sarbos strikes again: BG to delist from NYSE". Itbusinessedge.com. Archived from the original on 24 February 2009. 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 October 2011. Retrieved 2 November 2011.
  18. ^ "Cheniere and BG ink $8 bln deal to export US LNG". Reuters. 26 October 2011. Archived from the original on 28 October 2011. Retrieved 2 November 2011.
  19. ^ "BG offloads Gujarat Gas stake for $470 mln". Reuters. Reuters. 3 October 2012. Archived from the original on 6 March 2016.
  20. ^ BG Group and partners strike oil offshore Kenya, Africa: Oil Review Africa, 2014
  21. ^ "Shell agrees deal to buy energy rival BG Group for $70bn". The Telegraph. 8 April 2015. Retrieved 8 April 2015.
  22. ^ "Recommended Cash And Share Offer For BG Group PLC By Royal Dutch Shell PLC" (PDF).[permanent dead link]
  23. ^ Jess McHugh (15 February 2016). "Shell-BG Group Acquisition Complete, As Energy Giant Focuses on Liquefied Natural Gas". International Business Times. Retrieved 15 February 2016.
  24. ^ "Data Book 2010". Bg-group.com. Archived from the original on 29 May 2011. Retrieved 18 April 2011.
  25. ^ "Remuneration report". Annual Report & Accounts 2008. BG Group. Archived from the original on 14 June 2011. Retrieved 23 August 2009.
  26. ^ "BG names industry veteran Finlayson as CEO". Reuters. 13 December 2012. Archived from the original on 11 January 2016. Retrieved 13 December 2012.
  27. ^ "No 'sacred cows' as BG considers asset sell-off". The Telegraph. 1 May 2014. Retrieved 19 May 2014.
  28. ^ "Currently CEO of Statoil, Helge Lund will join @BGGroup from 2 March, 2015". twitter.com. BG Group. Retrieved 15 October 2014.
  29. ^ "Helge Lund blir toppsjef i britiske BG". DN.no. 15 October 2014. Retrieved 15 October 2014.
  30. ^ Bousso, Ron. "Shell names top executive to head BG during complex integration". Reuters UK. Archived from the original on 18 January 2016. Retrieved 6 February 2017.
  31. ^ Karen Reiner (15 December 2010). "Most Environmentally and Socially Controversial Companies of 2010" (PDF). Zurich: RepRisk. Archived from the original (PDF) on 19 May 2014. Retrieved 19 May 2014.
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