UPDATE 1-BG Group targets job cuts to rein in costs

(Adds BG Group comment, dateline)

LONDON, March 20 (Reuters) - Oil and gas producer BG Group

BG.L has begun offering voluntary redundancy to staff at its British headquarters, the company said, as it seeks to reduce headcount and trim costs.

BG Group has been hit by lower than expected production rates, having downgraded output forecasts several times over the past two years, and is now focusing on streamlining its operations.

"We have invited UK contracted employees based at our head office in Reading to express their interest in a voluntary redundancy package," a company spokesman said on Friday.

BG Group employs 1,100 staff at its head office in Reading, England, and has a total workforce of 5,200 worldwide.

"There is no target for the number of applications (to the voluntary redundancy scheme)," the spokesman said.

The Times newspaper reported on Friday that BG Group was cutting nearly 300 jobs in Britain and planning significant job cuts in Australia. (http://link.reuters.com/jyr77v)

The energy company warned in January that turmoil in Egypt would hit its output this year and next and that costs would rise because of new investments in Australia and Brazil.

(Reporting by Karolin Schaps in London; Additional reporting by Richa Naidu in Bangalore; Editing by Lisa Shumaker and David Goodman)

((karolin.schaps@thomsonreuters.com)(+44)(0)(207 542 6622)(Reuters Messaging: karolin.schaps.reuters.com@reuters.net))

Keywords: BG GROUP REDUNDANCIES/