BRITISH gas producer BG Group said it had doubled its best estimate of its oil and gas reserves in Brazil’s Santos basin to 6bn barrels following new tests.
The upgrade of the fields, co-owned with Petrobras and Spain’s Repsol, highlights the prospectivity of the area, which represents one of the industry’s largest new provinces in recent decades.
Chief executive Frank Chapman said production capacity would rise steadily to reach more than 2.3m barrels of oil equivalent per day by 2017.
“I believe this ... will transform the scope, scale and value of BG Group,” he said in a statement.
A spokesman said the economics of developing the reserves were also improving, partly because the per barrel costs fell with higher reserves estimates.
Broker Evolution Securities said that, significantly, 96 per cent of the new reserves figure is based on existing discoveries with the risked upside stretching to 8bn barrels of oil equivalent.
The broker says yesterday’s announcement should also add further confidence to the production growth target of six to eight per cent per annum to 2020.
Shares in BG Group jumped 4.7 per cent on the news to close at £14.14.
City A.M. Reporter