Oil discovery by BG trumps BP's big find

OIL giant BG Group said yesterday its Guara discovery off the coast of Brazil will trump the &ldquo;giant&rdquo; find BP made in Mexico last week.<br /><br />The company, which is the UK&rsquo;s third-largest oil and gas producer announced its Guara site could contain between 1.1bn and 2bn barrels of oil. BP said last week its site, Tiber, held approximately 3bn barrels, but only around 500m would be extractable.<br /><br />&ldquo;The well test results on Guara were excellent and underscore again the outstanding potential in BG Group&rsquo;s extensive position in the world-class Santos Basin,&rdquo; BG chief executive Frank Chapman said.<br /><br />&ldquo;It is clear the Santos Basin will make a very material contribution to the production and cash flow of BG Group for many years to come,&rdquo; he added.<br /><br />BG has a 30 per cent stake in the site, Petrobas 45 per cent and Repsol 25 per cent.<br /><br />Production at Guara could start as early as 2012, while BP said production at Tiber would not start until &ldquo;late next decade&rdquo;.<br /><br />BP, which is the second largest oil group in Europe, said last week its well was &ldquo;one of the deepest ever drilled by the oil and gas industry&rdquo;.<br /><br />It is located in Keathley Canyon, about 250 miles south east of Houston and is in 4,132 feet (1,259 metres) of water.<br /><br />BG Group slashed its production targets in July, as it responded to a slump in demand for fuel, and a surplus of liquefied natural gas.<br /><br />It pushed back output targets of 680,000 barrels of oil and gas per day by three months, to March next year.<br /><br />Earlier this year, the company said its earnings had dropped by almost a third to &pound;513m in the three months to 30 June.