OREANDA-NEWS. London-listed energy group BG increased its production in the second quarter thanks to a ramp-up of output in Brazil and Australia, and it expects to see output by the end of the year at the top end of its forecast range.

In April, Shell announced a ?47bn ($73bn) cash and share offer for BG. The deal is set to complete early next year.

The firm's production increased by 19pc to 703,000 b/d of oil equivalent (boe/d), although this was partly offset by lower output in Egypt, the US and the UK. Production from Brazil and Australia more than doubled on the year to 143,000 boe/d and 80,000 boe/d, respectively.

But UK output fell by around 10,000 boe/d to 102,000 boe/d. The Armada, Everest, Lomond and Erskine fields in the UK North Sea were shut in for the entire first quarter. Armada and Everest resumed in April, while Lomond and Erskine are expected to return to production "in the coming weeks", BG said today.

In Brazil, BG's production is now above 150,000 b/d of oil equivalent (boe/d) and its share of production in the Santos basin reached 159,000 boe/d this month. Production will continue to increase throughout the rest of this year, BG said today, as additional wells are connected to the two floating, production, storage and offloading (FSPO) vessels in the area. The 150,000 b/d Cidade de Itaguai (FPSO 6) for Iracema North will start up during this quarter. Other FPSO's are due onstream next year.

BG's first-quarter profit, which includes disposals and impairments, rose to $2.22bn from $1.36bn in the first quarter, boosted by the QCLNG pipeline disposal. Excluding disposal gains and other one-off items, profit was down to $429mn from $1.21bn on lower oil prices.

The company's capital expenditure (capex) amounted to $3.1bn in the first half of this year. This year's capex will be "significantly lower than 2014, as projects complete and the Group reacts to a lower oil price environment." Capex forecasts for 2015 are unchanged at $6bn-7bn, around 30pc lower than last year.

Shell, which is planning its own capex of $30bn for this year, announced yesterday that the enlarged company's capex is projected to be $35bn next year "in the current environment".