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Thursday, July 30, 2009
BG Group is pulling some funding out of Nigeria and putting them it into Australia. The company said that funding in Nigeria’s Olokola LNG project will be reduced and that its newly acquired assets in Australia would be the focus of new investment.
BG said that the Nigerian government has “refocused its priorities on a number of domestic projects” and that has caused the slowing down of LNG investment. , BG head CEO Frank Chapman told Bloomburg. “We are slowing down our funding of OKLNG to a very low burn rate.”
“At the appropriate time there will be further opportunities” in Nigeria,” Chapman said. “For today, it’s a low priority.”
The company plans to switch its investment spending to other arenas, most notably Australia. It is also planning to expand its business in the US and Brazil. “In the future, access to resource is going to be difficult,” Chapman said. The two countries along with Australia “are very good examples in BG’s portfolio where we believe we will be able to make very good progress in the future.”
While the company saw a bit of its loss for the quarter, net income dropped £234 million, mainly attributed to the decreased demand for natural gas it still plans to invest heavily in gas production. The company will also invest in shale gas production in the US and Brazil.
The US “is world’s largest most liquid gas market,” Chapman said. “There is no doubt in my mind that shale gas is going to be an increasingly important element in the US gas supply chain.”
BG Group recently had a couple of firsts in its LNG business with first cargo deliveries being made to the Dragon LNG import terminal in Milford Haven and the first-ever cargo of LNG to Chile.
In the near term the company will see new production out of Tunisia and Egypt.
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