BG Group strikes oil in Brazil

City A.M. Reporter
BRITISH oil and gas firm BG Group said yesterday it found oil to the west of the Tupi discovery off the coast of Brazil, giving it further confidence in its recently upgraded resource estimates for its Brazilian oil fields.

BG said yesterday that initial results from the well, drilled 11 kilometres from the first Tupi well near the Rio De Janeiro state coast, were encouraging enough to prompt BG and its partners to consider allocating another Floating Production, Storage and Offloading (FPSO) vessel to Tupi.

Tupi, in which BG has a 25 per cent stake, is the world’s second largest oil discovery of the last decade and so far has one FPSO, which started production in October, and another one due to begin in 2013.

BG in November lifted estimates for total recoverable resources from Tupi and two other fields in Brazil by 34 per cent, raising its net resources from offshore Brazil to 2.8bn barrels of oil equivalent.

“The information obtained from this well adds further certainty to our recoverable reserve and resource estimates for the Tupi field,” the company said in a statement.

Further tests would now be carried out on the well, BG said, adding that it had found light oil in a 90 metre zone.

The news follows a similar large find off the coast of China, which BG announced on Wednesday.

The company found oil-bearing sands in the South China Sea, which will now be tested for viable hydrocarbons alongside a second well in the region.

Shares in BG, which have risen 20 per cent in the last three months, closed 0.5 per cent higher at 1,307p yesterday.