BG profits slip on weak prices before takeover by Shell

By Karolin Schaps

LONDON (Reuters) - Britain's BG Group (BG.L), in its last results update before its takeover by Shell (RDSa.L), reported a 22 percent fall in fourth quarter core earnings to $1.43 billion on Friday as low energy prices ate into profits.

The large gas producer, set to become part of Shell on Feb. 15, took a hit in its oil and gas production and liquefied natural gas (LNG) segments from another roughly 20 percent fall in oil prices in the quarter.

A surge in production in Australia and Brazil, key growth areas that Shell has singled out to justify its takeover, helped BG beat its own yearly output target to 704,000 barrels of oil equivalent per day.

Shares in BG were trading up 1.1 percent at 0909 GMT.

BG's prized LNG unit also delivered 63 percent more volumes in 2015 mainly thanks to the smooth ramp-up of its Queensland Curtis LNG export project.

The additional volumes were mostly absorbed by buyers in Asia, with the number of cargoes to the region rising 72 percent year-on-year to 208.

In a sign that BG has increased opportunistic trading, the company said it had purchased 13 more cargoes on the spot market in the fourth quarter.

Weaker demand and a steady ramp-up in fresh supplies meant low LNG prices provided more spot trading opportunities, complementing deals under long-term contracts.

BG's successful LNG business will turn Shell into the world's largest LNG trader, betting on continued growth driven by governments' ambitions to make their economies less carbon-intensive.

"We believe BG's quality portfolio in both Brazil and LNG will contribute positively to the Shell-BG combined entity," said analysts at Bernstein.

(Editing by Alexander Smith and Adrian Croft)