E.Guinea says to punish Exxon and blasts BG profit

LONDON (Reuters) - Equatorial Guinea will penalise U.S. oil major Exxon Mobil (XOM.N) for failing to stop gas flaring in the country, a senior state official said on Tuesday.

The country had also expressed its concern to British gas producer BG Group (BG.L) about "extremely unfair profit" it was making in the small West African gas and oil producer, he said.

"Exxon will be penalised because it could not stop flaring," Gabriael Nguema Lima, the vice minister of the Mines, Industry and Energy of Equatorial Guinea said at a conference in London.

"Exxon will be penalised. We will announce it soon. It will be in the press in a month," he told Reuters after his speech to the conference. He did not say what the penalty would be.

Gas flaring produces greenhouse gases, which are blamed for global warming. Equatorial Guinea is ranked tenth in gas flaring in the world, according to the World Bank-backed Global Gas Flaring Reduction (GGFR) initiative and it plans to stop the flaring completely eventually.

Lima also said: "The ministry is unhappy about (BG's) windfall profit." Asked if the ministry would take any action, he said, "Nothing. That is just a message."

Some oil producing countries have criticised foreign oil firms for not sharing windfall profits from record high prices with producer governments. Some firms have been forced to accept revised profit sharing contracts or give up valuable assets.

(Reporting by Ikuko Kao; editing by James Jukwey)