BG sees weak gas prices

BG said it expected to grow output at the upper end of its compound annual growth rate target range of 6 to 8 per cent to 2020, after it made big oil and gas discoveries in Brazil and bought US shale gas assets.

This target compares to a target of 1-2 per cent at BP, Europe's largest oil and gas company, and a target of 2-3 per cent at Royal Dutch Shell.

Nonetheless, one analyst said BG's failure to commit to strong growth in 2010 meant some investors may wait to see delivery before rewarding the shares.

BG shares were down 3.1 per cent in early trading.

Weaker than expected output in the fourth quarter produced lower than expected profits in that period.

BG said fourth-quarter net profit was 465m. Excluding one-offs and non-operating items the result was 592m, just short of an average forecast of 606m.

Gas prices have been hit by an increase in production in the US and low demand caused by the global recession

The result compares with Shell's 75 per cent drop in profits in the fourth quarter compared to the same period in 2008, a 37 per cent drop at Chevron and a 23 per cent drop at the largest company in the sector by market value, Exxon Mobil

BG said it was lifting its capital investment plans to pay for growth plans. Nonetheless, BG still lifted its final dividend 3 per cent to 6.73p per share, while most peers held their payout's steady.