The company said it was taking the hit after oil prices – down by half since last summer – fell more steeply than it had expected.
It said it would cut investment by almost a third this year to between £4bn and £4.7bn, after the lower oil price contributed to a £1.5bn pre-tax loss in 2014.
“Planned capital expenditure on a cash basis in 2015 is expected to be significantly lower than 2014, as projects complete and the group reacts to a lower oil price environment,” BG said.
The company said it would also cut operating costs this year by 10%, including some job losses. BG employs 5,000 people around the world, including about 1,500 in Aberdeen and at its head office in Reading. Last year, BG cut its workforce by 15%, including shedding 300 jobs at Reading.
Benchmark Brent crude oil has fallen from a high of about $115 a barrel to $46 last month, and is trading at around $57 following a rally over the last two days.
Andrew Gould, BG Group’s interim executive chairman, said: “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.”
The £1.5bn pre-tax loss in 2014 followed a £2.6bn profit in 2013. Revenue was flat at £12.8bn. The full-year dividend was unchanged at 28.75c a share (17.99p) and the shares fell 1% to 926p on Tuesday morning.
Helge Lund was appointed as BG’s chief executive in October following the resignation of Chris Finlayson in April last year, who left after a little more than a year in the job. Lund, who joins from Norwegian oil and gas company Statoil, will take up the role on 2 March.
In December, BG was forced to cut the £25m pay deal it had offered Lund, after shareholders warned that they would vote against the package. The BG board cut his share award from £10m to £4.7m.
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