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BG Group hit by Egyptian woes

SHARES in BG Group tumbled yesterday after the oil and gas exploration firm slashed production targets on the back of continued problems in Egypt.

It said too much gas was being diverted into Egypt's domestic market instead of being made available for exports. The issue will contribute to output this year being around 590,000 to 630,000 barrels of oil equivalent per day, compared with 650,000 forecast in the City. Shares fell by around 15% as the company also cut its guidance for production next year.

BG chief executive Chris Finlayson said: "Despite the good progress we have made in 2013, we face short term issues which are reflected in our revised 2014 guidance."

He pointed out that key growth projects in Brazil and Australia remain on target but that BG's growing asset base was leading to higher unit operating costs in 2014.

BG has issued force majeure notices in Egypt, where it is one of the country's largest gas producers.

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