What is the BG Group?

Published by Thomas Herold in Economics, Investments

'BG Group' is explained in detail and with examples in the Investments edition of the Herold Financial Dictionary, which you can get from Amazon in Ebook or Paperback edition.

The BG Group, or British Gas group, was once the largest multinational gas company headquartered in Britain. It was based in Reading, England. The company became acquired via an agreement announced on April 8th of 2015 by Royal Dutch Shell to take the company over in a friendly acquisition which saw 19% of the stock in the newly combined entity going to the former BG shareholders.

The purchase price for BG was $70 billion. Regulatory approval and shareholder agreement were reached amicably so that the sale became completed on February 15th of 2016. Before this friendly takeover commenced, the BG Group had been prominently listed on the London Stock Exchange as a constituent member of the internationally renowned FTSE 100 Index.

Before this game changing acquisition spelled an end to the independent life of the BG Group, the company had considerable global operations throughout more than 25 nations across Asia, Africa, Australasia, North America, South America, and Europe. The company produced fully 680,000 equivalent barrels of oil per day. It’s Liquefied Natural Gas LNP business proved to be so large that it became the biggest LNG supplier to the United States. The proven commercial reserves of the company as a standalone operation were 2.6 billion barrels of oil equivalent as of December 31st in 2009. The company originally arose as the original British Gas Plc divested itself of Centrica to become BG Plc. The group then reorganized yet again in 1999 as the BG Group Plc.

The company produced a wide variety of products, the most significant of which were natural gas, crude oil, and petrochemicals. Their revenues as of 2014 were $19.289 billion, their operating income was $6.155 billion, and their profit or turnover was $1.044 billion. As of 2015, they employed 5,200 individuals in more than 25 countries around the world.

Shell gained control of all the natural resource assets of the BG Group as a result of this friendly takeover. They also gained access to the extensive assets in LNG that BG dominated in the industry, which catapulted Shell’s deep water natural gas and global LNG strategies years into the future.

The main business lines of the BG Group had been the discovery of and extraction of both natural gas and crude oil, as well as the production, sales, and distribution of liquefied natural gas. The British energy giant vended such products to its wholesale mega customers like retail electricity generating firms and gas suppliers throughout the globe. It owned some of its gas pipelines and had a stake in a few power-generating projects around Britain and the world in general.

The company proved to be globally active and only kept a minority percentage of its primary businesses in its home market of Great Britain. BG Group proved to be a true multinational energy player till the end, controlling its sizeable operations in fully 27 different nations.

Among its chief operations and markets were Australia, Brazil, Egypt, India, Kazakhstan, Norway, Thailand, Trinidad and Tobago, Tunisia, the United Kingdom, and the United States. This continued all the way up until February 15th of 2016, the date upon which substantially larger rival Shell/Royal Dutch Petroleum acquired the company’s full issue of publically traded stock, and it ceased to be as an independent going concern.

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The term 'BG Group' is included in the Investments edition of the Herold Financial Dictionary, which you can get from Amazon in Ebook or Paperback edition.