Oil and gas explorer BG Group put out its half-year report on Friday and it makes for pretty grim reading — just look at the revenue breakdown below.
Those are huge double-digit falls across the board. The biggest was in upstream, which is industry speak for exploration and production of oil, as opposed to refining it.
BG’s earnings before tax and exceptional costs collapsed 45% in the first half to $US2.96 billion (£1.9 billion).
The tanking revenues and earnings are down to the slump in the oil price over the last year. Oil is currently trading around $US53 a barrel, compared to an average of $US107 a barrel in July last year.
As a result BG is cutting back on investment — it slashed investment in operations by 34% in the first half. Shell, which is in the process of buying BG, is also making big cuts. It said on Thursday that it’s axing 6,500 staff and selling $US20 billion of assets just to compete with the slump.
There were some bright spots of BG’s results though:
- Oil production rose by 19% to 703 kboed (thousand barrels of oil equivalent per day); full year guidance moved to the upper half of 650 – 690 kboed range.
- Unconditional anti-trust approval of the Shell offer from Brazil in July; one of five pre-conditions to the offer.