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BG Group

BG Group PLC has staked out its own piece of turf in the oil patch: production and transport of gas. In the past few years, BG, which was carved out of the old British Gas in 1997, has trimmed its exposure to emerging markets and concentrated on big industrial countries, particularly Britain and the U.S., where deregulation offers high prices. But BG is still a big supplier to fast-growing Brazil and India. The results look good: The company reported an 18% increase in profits in 2004 as demand surged.

Indeed, there was never a better time to be in the gas business. With traditional gas supplies in the North Sea and the Gulf of Mexico falling behind demand, the world is hungry for new sources such as imported liquefied natural gas (LNG)--a fast-growing business for BG. Chief Executive Frank Chapman plans to increase production rapidly in 2006. He said in an e-mail that he has high hopes that an LNG project in Egypt will substantially increase production. Being a relatively small company well positioned to deliver a hot commodity means that BG is the subject of frequent merger rumors. So far, however, it has seen more profit in rejiggering its own portfolio than in selling out.