BG profits shoot up by 70% to £1.4 billion

BG, which also launched a £6 billion takeover bid for a major Australian gas and electricity supplier, said operating profits for the first three months of the year jumped 70% to £1.4 billion.

It came just a day after BP and Shell delivered combined profits of £7.2 billion for the first quarter, sparking a fresh row as the rising cost of oil drives petrol prices ever higher. Profits across the industry have been boosted by the soaring price of oil and gas, which has sent household bills and petrol prices rocketing.

Consumer groups and other critics claim oil and gas producers are ripping off the public. The City argues such profits bolster pension funds, and are vital for investment in finding new supplies of energy.

BG's results came as itmoved to buy Origin Energy, one of Australia's largest gas and electricity suppliers, for A$12.91 billion.

BG, one of the world's most active liquefied natural gas (LNG) traders, is seeking to establish itself as a major player in the Pacific region, where LNG demand has been forecast to grow strongly.

The unsolicited bid of A$14.70 a share represents a 40% premium to last night's price of A$10.47 and sent the stock soaring to a record high of A$14.60 in Sydney today.

Origin is looking forward to a bumper year, having raised its profit forecast in February on higher tariffs and the prospect of the start-up of a natural gas project that will boost second-half earnings.

Citigroup analysts expect Origin's earnings to grow by 16% annually for the next five years.

The Australian company said that it would talk to BG and consider the proposal.

BG has been on the prowl Down Under. It completed an agreement with Brisbane-based Queensland Gas on 11 April for a proposed liquefied natural gas venture in a deal that also gives an opportunity for the Australian company to enter a natural-gas venture in India.

BG chief executive Frank Chapman hailed "an excellent start to the year" for the firm, "driven by increased production volumes, higher commodity prices and strong first-quarter performance in LGN".

Production of oil and gas rose 4% to 674,000 barrels of oil equivalent per day - less than the 3.5 million barrels at Shell and 3.9 million at BP but on the rise, unlike its larger rivals, where production was flat. BG's profits were well ahead of City analysts' expectations of £1.24 billion, but the shares today fell back 7p to 1301p.

The price of oil in New York rose 18 cents to $115.81 a barrel today, having hovered around the $120 mark in recent days.

Opec this week warned crude could hit $200 a barrel if the dollar continues to weaken against other currencies around the world.