Energy explorer BG Group today warned that it would miss production targets for the year as it revealed its wound from the falling cost of crude and gas.

The UK's third titan of oil and gas after BP and Royal Dutch Shell said that weak demand for gas worldwide has forced it to cut its targets for 2009 from 680,000 barrels of oil equivalent a day to between 656,000 and 662,000.

Demand for gas from industry has slumped in the recession as energy-hungry companies in the manufacturing and construction sectors have suffered.

BG's shares dropped 9p to 1073p after revealing that profits in the second quarter slumped to £513 million from £747 million the previous year.

Sales of oil, gas and liquefied natural gas dived 28% to £2.3 billion, while its debts have doubled to £2 billion in the past six months. But Frank Chapman, chief executive, was relatively upbeat: “These results demonstrate a resilient performance and rapid progress with the development of our business.”

BG has reduced its funding for its Nigerian liquefied natural gas project because its government is prioritising its gas infrastructure for domestic use. BG has shifted its focus, most notably to its lucrative coal seam gas projects in Australia.

The dividend is raised to 5.62p a share.