BG Group Plc has written £4 billion off the value of its oil and gas business in the fourth quarter to reflect the slump in the price of oil, forcing it to cut budgets and jobs this year.

UK North Sea output was up by 5% in 2014 as BG slumped to pre-tax losses of £1.5billion, from profits of £2.58million a year earlier. Revenue and other income was 2% higher at £12.9billion.

BG Group, has approximately 500 people working from its Aberdeen offices, cuts will be paired with a planned 10 percent reduction in operational expenditure this year, which includes jobs.

The group, cut 15% of its staff last year including 300 from its Reading office, did not say how many more jobs would be shed.

BG, which has been without a chief executive for nearly a year, has appointed Ernst den Hartigh previously of Statoil as, Managing Director of European Exploration and Production, in a statement he said: “We safely increased production for a second successive year. Our priorities for 2015 are to complete the offshore investment campaign we started last autumn and ensure we reduce operating costs to a more sustainable level.”

Andrew Gould, Executive Chairman added: "In the new environment we are well placed to manage the downturn as we are reaching the end of a high capital expenditure cycle and will continue to add further production in 2015 from Brazil and Australia,"

The Executive Chairman painted a gloomy picture for prospects in the North Sea, which he said was unlikely to enjoy a resurgence in light of the recent plunge in oil prices.

Any tax breaks introduced by Chancellor George Osborne in his next Budget would help the UK industry but the long-term outlook was poor, he said.

He added: “I really don’t think the future of the North Sea is a discussion on the operating costs. It is a discussion based on the reserve left in mature fields.

“Anything the government does to reduce the immediate tax burden will stimulate investment but I don’t think you can, at these (oil) prices, expect a major resurgence.

“There are a lot of other places in the world where the reserve life is a lot more promising.”

The company is targeting a 2015 production level of between 650,000 and 690,000 barrels of oil equivalent per day (boepd), up from 630,000 last year, betting on increases from Brazil and Australia.

BG also chimed with fellow oil producers in maintaining dividend payments, announcing a payment for 2014 of 28.75 cents per share.

Its full-year operating profit fell to $6.5 billion, while net earnings slipped 8 percent to $4 billion.

Its key LNG business, a driver for profits in recent years, is expected to be hit by weaker oil prices this year, BG said, forecasting an operational profit between $0.7 and $1 billion.

Shares in BG were down 0.9 percent at 0946 GMT, reversing an earlier rise to 944.9 pence, their highest since early December.

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