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BG Profits jump 140% in Third Quarter

The UK based company said oil production rose 11% where other companies were cutting production

The company made £857m in that period - but also warned that rising costs have forced it to delay a key project.

BG said oil production rose 11% in the quarter to 587,000 barrels per day, compared with falling output at most rivals.

Shell's production fell 7% in the third quarter, while Exxon Mobil's was down 8%.

An 11% rise in hydrocarbon production and large profits from shipping liquefied natural gas (LNG) around the world also helped the firm.

The recent collapse in crude oil prices from $147 a barrel in July to around $63 a barrel is now forcing oil companies to rethink their most expensive development projects.

BG has postponed a decision on whether to proceed with Phase III of the Karachaganak project in Kazakhstan.

Chief Executive Frank Chapman said the project aimed to lift oil production to 16 million tonnes per annum (tpa) from 11 million tpa.

But the company is now in talks with the Kazakh state oil company KazMunaiGas about the rescheduling and gave no target for the startup of Phase III production.

Delays in the start-up of the Kashagan oil field prompted the Kazakh government to demand tougher terms from the partners in that project.

This echoes a decision by Royal Dutch Shell last week to delay the expansion of an oil sands project in Canada, due to rising costs.

BG also used the third-quarter update to confirm that it was on track to sustain a 6 to 8% annual growth rate in production from 2005 to 2020.

Author: Jo Amey