London Stock Exchange-listed BG Group has taken $6.8 billion of impairments on its Australian business, a majority of which has been booked on the newly producing Queensland Curtis LNG plant.
In a report of their fourth quarter and full year results, BG Group said part of the write-down was a result of the sale of the QCLNG pipeline announced in December.
A majority of the write-down was driven mainly by a reduction in the group’s assumptions of future commodity prices, which would cut revenues from QCLNG by an estimated US $4.1 billion.
BG Group’s Interim Executive Chairman Andrew Gould said “BG Group made substantial progress on a number of fronts in 2014. The start-up of QCLNG and the continued introduction of FPSOs in Brazil were notable operational successes.
“The infrastructure transactions in the North Sea and Queensland coupled with improved collections from Egypt provide greater assurance on the Group’s cash position. However, the sharp deterioration in commodity prices in the second half of the year has led us to recognise significant asset impairment charges in the fourth quarter.
“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. We will proactively manage our costs, both capital and operating, to adapt to the new business circumstances. We look forward to welcoming Helge Lund as our new Chief Executive shortly.”