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Reuters: BG profit doubles in first quarter

BG profit doubles in first quarter
Wed May 3, 2006 7:37 AM BST

LONDON (Reuters) – Gas and oil company BG Group reported a 109 percent jump in first quarter net profit excluding non-operating items on Wednesday on higher production and strong prices.

BG (BG.L: Quote, Profile, Research) said in a statement its net profit before exceptionals was 563 million pounds, compared with an average forecast of 531 million pounds from a Reuters poll of nine analysts.

BG's production rose 28 percent to 55.8 million barrels of oil equivalent (boe) in the quarter, compared with a poll forecast of around 55.17 million boe.

This contrasts with falling production at bigger rivals BP (BP.L: Quote, Profile, Research) and Royal Dutch Shell (RDSa.L: Quote, Profile, Research).

BG's operating profit jumped 98 percent to 958 million pounds, compared with a consensus forecast of 931 million.

The main profit driver was BG's upstream gas and oil production unit, which saw operating profits climb 88 percent to 726 million pounds.

However, costs also rose in this unit due to higher input costs, tariffs and royalties, reflecting an industry-wide trend.

BG faces the potential loss of its Bolivian assets, which account for under 4 percent of proved reserves, after President Evo Morales nationalised the hydrocarbons industry.

“BG Group is carefully reviewing this new decree and developments in Bolivia and will be engaging with the Bolivian Government in the coming months,” the firm said.

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