Oil and gas explorer eyeing Australian energy firm
Oil and gas explorer BG Group have set its sights on one of Australia's biggest energy firms after unveiling a £6 billion takeover proposal.
Its pursuit of Sydney-based Origin Energy was revealed as the UK business posted first-quarter profits of £1.4 billion on soaring oil prices.
BG is eyeing Origin as a route to expanding its presence in the region and bolstering its assets in coal-seam gas - methane gas trapped underground in deep coal seams by water.
Origin has undeveloped coal-seam assets in the Surat Basin and Bowen basins in southern Queensland containing unusually "clean" methane with very small amounts of nitrogen and carbon dioxide.
BG's latest move onto the acquisition trail comes after it formed an alliance with the Queensland Gas Company in February - buying a 20 per cent stake in its coal-seam assets and a 9.9 per cent stake in the firm itself for £299 million.
Its plans include the construction of a new liquefied natural gas terminal to supply Asia-Pacific markets.
BG proposes to fund the Origin deal from its own cash reserves as well as debt from a banking syndicate.
It said: "Origin has not yet considered the proposal. Discussions between the parties will take place and shareholders will be advised of the outcome."
Origin Energy also has more than 2.7 million customers in Australia, New Zealand and the Pacific alongside its exploration and production activities. It has around 3,000 staff and was demerged from Boral, Australia's biggest construction and building materials firm, in 2000.
As well as finding natural gas, it also produces environmentally-friendly power from solar, wind and hydro-electric generators.
Seymour Pierce analyst Peter Hitchens said the potential bid was "good news" for the group. He added: "We believe that there is better shareholder value in building up the business to take advantage of the strong operating environment."
Image: BG Group has taken a keen interest in Australian firm Origin Energy