BG plc plans to invest £5 billion in development projects in a bid to double the output of its BG International division, in energy-equivalent terms, during 1999-2003.
In June, BG restructured to separate its international operations from its U.K. transportation business (OGJ, July 5, 1999, p. 30). Last year, the assets comprising BG International produced 25.1 million bbl of oil and 61.7 million boe of gas.
A BG official told OGJ the capital investment would be split as follows: 55-60% to exploration and production projects, 20% to power and liquefied natural gas, and 20-25% to transmission and distribution.
The outlay would be for projects that have already been announced, notably Karachaganak field in Kazakh- stan, the Atlantic LNG Co. project in Trinidad and Tobago, production and distribution in Egypt, power generation in the Philippines, and gas pipe- lines in South America.
The official said that central to the plan is the company`s aim to achieve a 20% average return on capital employed by 2003. As part of this, BG International intends to reduce exploration and development costs to $3.20/ boe by 2003 from $4.20/boe last year and operating costs to $2.40/boe from $3.60/boe.
Frank Chapman, president of BG International, said: "Following the merger of our international downstream and exploration and production businesses, a reorganization around an asset-based structure is being undertaken, and this will assist us in creating still greater performance focus and in achieving efficiencies."
