BG Group put the tumbling quarterly profits at older and bigger rivals Royal Dutch Shell and BP in context today as it increased earnings in the final three months of 2008, sending full-year profits up by 65%.

The City was also excited about the group's plans for expansion, including production growth estimates of up to 8% a year for the next decade as world-class developments such as those in the Santos basin off Brazil come on line.

Shell and BP this week reported slumps in underlying profits, and quarterly losses on the writedowns in the value on their oil inventories as the price of crude halved in three months.

However, BG today reported that it is storming to new heights, making the most of its position as an international gas play, its burgeoning earnings from the seaborne liquefied natural gas (LNG) market and the fact that gas prices have not crashed nearly as badly as crude.

Underlying operating profits were 13% higher at £1.1 billion in the final quarter of 2008, giving a full-year out-turn of £5.3 billion against £3.2 billion in 2007. Chief executive Frank Chapman was today cranking up investor expectations as the news sent the shares 59p or 5% higher to 1010p.

"We have established ourselves as a leading global gas company and extended our 12-year growth trend by delivering record results this year with strong performances in exploration and production and LNG," he said. "Major reserves and resources addition were achieved with 2P [proved and probable] reserves up 64%.

"There was transformational strategic process in Australia and Brazil - two ventures that will support BG's growth over the next two decades."

The company - a relatively young major player, having split from the old privatised British Gas group a decade ago - today said it expects annual production growth of between 6% and 8% until 2020.

That would see it producing the equivalent of 1.6 million barrels of oil a day, putting it in the big league of world producers, where supermajors such as Shell and BP are currently putting out up to four million barrels a day.

It also confirmed calculations that not only have the finds off Brazil and the recent £2.4 billion purchase of Queensland Gas Company brought its proved and probable reserves up to the equivalent of 5.8 billion barrels of oil but also total potential reserves are now standing at the equivalent of 13 billion barrels - 31% higher than a year ago.

In Brazil, BG is partnering with state oil company Petrobras in developing the giant Santos basin. In particular, finds in the Tupi field are expected to catapult Brazil into the front line of global producers. BG said the results of key Tupi production-well tests are expected within the next three months, with first commercial production by the end of 2010.

It added that its profits from LNG could be as high as £1.5 billion in 2009, some £200 million more than previously forecast. Capital expenditure is likely to average £4 billion per annum over the next four years. The full-year dividend rises 20% to 11.23p.