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BG Group intends to go back to its roots as a gas explorer and producer in the next five to 10 years in the hope to regain investor confidence in the independent gas firm.
Chris Finlayson, the group’s Chief Executive, is to formally unveil the firm’s long-term strategies to a group of investors and analysts later today at 12:00 GMT that will see the company’s portfolio more focused towards liquefied natural gas production.
BG Group fell out of investors’ favour last year, losing a fifth of its market value, when it reduced its operating profit by over half a billion dollars in the nine months from January to September 2012 after the company wrote off the value of its assets and reduced its target production and forecast for this year.
Later, Mr. Finlayson is to announce the company will increase its expenditure for exploration to US$1.8 billion a year in the next three years, maintain a portfolio of about 10 to 15 high quality assets, and increase its dividend to add value to its investors.
“BG Group believes this strategy will deliver industry leading growth in shareholder value, driven by its world-class exploration and distinctive LNG model,” the company said in a statement.
Mr. Finlayson asserted “BG Group is a great company with a strong pipeline of projects and deep-set skills and expertise that differentiate us, particularly in exploration and LNG.”
The CEO projects the demand for LNG to double the demand for overall gas demand and supply for LNG to increase by 9% to meet the total demand.
“I look forward to delivering this strategy for BG Group, ensuring we become a high growth, high quality, global E&P and LNG company delivering excellence in execution and industry leading growth in shareholder value,” Finlayson stated.
Shares of the London Stock Exchange’s third largest oil firm by market value rose 0.7% to £11.94 a share minutes before the presentation, but still down 11% compared to its value back before it revealed losses in October 2012.
