BG Group today made an unsolicited A$12.9 billion (£6.1 billion) takeover bid for Australia’s second-biggest energy retailer as it seeks to tap into soaring Asian demand for gas.

The British natural gas producer, more usually the subject of takeover speculation, made its tilt at Origin Energy as it announced a 78 per cent increase in first-quarter profit.

BG's net profit rose to £767 million pounds from £432 million pounds in the same period last year, on the back of high gas and oil prices and increasing production. Shares in the gas group dropped 39p to 1269p, in early trading.

Stripping out one-off items, the result was £789 million, ahead of an average forecast of £691 million. BG’s result compares with a 12 per cent rise in first-quarter profit at Shell and a 48 per cent rise at BP.

Frank Chapman, chief executive of BG, said: "BG group has made an excellent start to the year driven by increased production volumes, higher commodity prices and strong first-quarter performance in LNG."

BG’s core upstream, gas and oil production unit had a 50 per cent jump in profit thanks to a more than 10 per cent rise in average gas prices and around 70 per cent rise in crude prices.

Production of gas and oil also rose, up 4 per cent to over 674,000 barrels of oil equivalent per day, as compared with flat output at BP and Shell. The higher production came from the Buzzar field in the North Sea and BG's Indian interests.

This weekend's shutdown of the Forties pipeline, due to the Grangemouth refinery strike, has hit production at Buzzard, which supplies 200,000 barrels a day, but BG said that production was back up to half by Tuesday evening.

High prices in Asia for liquefied natural gas (LNG) meant that 90 per cent of cargoes were diverted to the continent, helping the company’s LNG division to triple its profit.

BG is proposing to pay A$14.70 in cash for Origin Energy's shares — a 40 per cent premium to the closing price on Tuesday. Origin is the leading player in the fast-growing Australian coal-seam gas sector.

Shares in the target company soared by 39.4 per cent today suggesting that investors were not expecting a better offer. The view was backed by analysts, who said that the chances of a counterbid were slim.

“It's a pretty high price and premium. And it’s all cash so its going to be hard for Origin to turn it down,” said Jason Mabee, a utilities analyst at ABN AMRO in Sydney.

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