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BG books US$6 billion impairment charge on weak oil prices
[LONDON] Britain's BG Group wrote down the value of its business by nearly US$6 billion in 2014 on the back of the steep drop in oil prices, forcing it to slash its 2015 investment budget by around 30 percent compared to the prior year.
Oil companies across the globe are scrambling to deal with a halving in crude prices that has eaten into profits, with investments and jobs being cut across the board.
BG, Britain's third-largest energy company, said full-year total operating profit fell 14 per cent year on year in 2014 to US$6.5 billion, while earnings slipped 8 per cent to US$4 billion.
After years of high investments in new projects mainly in Australia and Brazil the group plans to reduce its capital expenditure to US$6-7 billion this year, compared with the US$9.4 billion spent in 2014. "In the new environment we are well placed to manage the downturn as we are reaching the end of a high capital expenditure cycle and will continue to add further production in 2015 from Brazil and Australia," Executive Chairman Andrew Gould said.
BG Group, which has been without a chief executive for nearly a year, has poached long-serving Statoil Chief Executive Helge Lund, who will start taking the reins at the company on March 2.