BG slips on worries about valuation of Brazilian assets

BG has been boosted in recent times by hopes for its developments in Brazil, and earlier this year it doubled the reserves estimates in the Santos basin.

There has also been a spate of bid speculation, with suggestions the Chinese could be interested in buying the whole company, or perhaps taking a stake in the Brazilian assets.

Now comes news that the Chinese have indeed taken a stake in the area, but at what appears a disappointing price. State owned oil firm Sinopec has taken a shareholding in deep sea oil assets owned by Portugal’s Galp Energia, paying $3.5bn for a 30% stake. Santander analyst Jason Kenney told Reuters it was not the “commercial valuation we were all expecting to see.” He added:

    If you can’t get the value for the assets in a commercial transaction then people do begin to question the value of the underlying asset base and so therefore the readacross for BG is negative on that basis.

BG is currently down 25.5p at £13.54, leading the fallers in the FTSE 100 index.