Gas price surge fuels BG profits

BRITISH energy giant BG Group has cashed in on soaring wholesale gas prices to post bumper profits for the first three months of the year.

BG today smashed City forecasts by reporting operating profits of £486m for the quarter, up 44% on the same period 12 months ago. Turnover was up 26% at £1.1bn.

Chief executive Frank Chapman said: 'BG has made an excellent start to the year.'

The company supplies almost 10% of the gas used by industrial and residential customers and has managed to raise production to take advantage of the higher prices on world markets.

Oil and gas output rose 7% in the three months to March to 486,000 barrels of oil equivalent with increased production from the group's huge Karachaganak field in Kazakhstan, and from Canada and Egypt.

The wholesale gas market has surged in the past year on the back of record crude prices and growing fears of a supply crunch as the UK becomes a net importer.

Centrica yesterday warned it may have to raise fuel bills again this year after two increases in 2004. Former BG chairman Sir Richard Giordano split BG from Centrica and Lattice Group eight years ago.