Advertisement

BG Group, KBR align in low price era

Oil producer says teaming up with KBG an evolution in business operations.

By Daniel J. Graeber

LONDON, Jan. 29 (UPI) -- An alliance with contracting company KBR is an opportunity to cut costs in a low price environment, an official from oil and gas producer BG Group said.

Both companies signed a deal to form a single-partner alliance that extends through at least 2021. KBR under the terms of the deal provides technical support and management expertise to front end engineering and design work for BG's portfolio in the exploration and production sector.

Advertisement

"In a lower oil price environment, this is an important aspect of the alliance which enables BG Group to help minimize its fixed costs whilst retaining access to high value technical expertise and support," the company statement read.

Energy companies, and those in secondary industries like steel, are cutting back on spending as oil continues to trade in a bear market. BP, which cut staff from its North Sea division and enacted a pay freeze to cope with the low price environment, this week announced it was partnering up with its U.S. counterparts Chevron and ConocoPhillips to join in 24 offshore leases in the deep waters of the Gulf of Mexico.

Advertisement

For BG Group, the alliance with KBR represents a "significant evolution" in the way it conducts business.

"We will be taking a more integrated and collaborative approach in which we can fully capitalize on the high caliber of people and the knowledge that our partner KBR can bring to our business," Chief Operating Officer Sami Iskander said in a statement Wednesday.

BG Group has operations in more than 20 countries.

Latest Headlines