BG Group Price Plunges 14% Over Egypt Turmoil
British energy giant BG Group has seen its share price plunge over falling output owing to ongoing turmoil in Egypt.
It announced a 'force majeure' for gas supply agreements, saying the decline was beyond its control.
BG Group also said it has calculated a writedown of £1.44bn in the value of assets in the Middle Eastern country and in the United States.
Just under half of that figure relates to the writedown in the US, where fracking has revolutionised gas and oil production and lowered prices.
BG is a supplier of liquefied natural gas (LNG), and said this year's output would likely be in the range of 590,000 to 630,000 of barrels of oil equivalent a day (BOED), down from 633,000 barrels in 2013.
But it said production was likely to recover in 2015 to between 710,000 and 750,000 BOED.
The warning sent shares in BG tumbling nearly 14%, causing it to be the worst faller on the FTSE 100 and dragging down the index.
The company's production has been dogged this year by political unrest in Egypt.
The force majeure limits its liabilities owing to circumstances beyond its control.
"Despite the good progress we have made in 2013 we face short term issues which are reflected in our revised 2014 guidance. This is very disappointing," BG chief executive Chris Finlayson said.
"We have elected to issue force majeure notices in Egypt reflecting the ongoing diversions of gas volumes to the domestic market.
"Year-on-year decline in Egypt and the US are the drivers of volume decline from 2013 to 2014, with the rest of the base portfolio broadly flat overall."
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