The first batch of earnings statements from Europe's top oil and gas firms offered glimmers of strong upstream growth and cash-flow progression in coming months as flagship projects come to fruition. But beyond the positive messages trumpeted, second-quarter results featured a potential impediment to that growth — geopolitical disruptions. In BG's case, newly appointed Chief Executive Chris Finlayson flagged growing concern about the group's operations in Egypt, where ongoing turmoil could create a cashflow crunch. Egypt accounted for some 15% of BG's profits and 20% of its production last year. But now Cairo owes BG $1.3 billion for domestic gas sales — a not insignificant hiccup given that Egypt serves as a major source of funding for BG's S20.4 billion Queensland Curtis LNG project in Australia coming on line next year, as well as its nonoperated production ramping up in Brazil's Santos Basin. Combined, these projects account for the bulk of BG's $12 billion capital budget this year.
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