BG Announces New Discovery In Santos Basin, Brazil - BUY BRL?
By Alexander Kolyandr and Bernd Radowitz
Of DOW JONES NEWSWIRES
LONDON -(Dow Jones)- U.K.-based BG Group PLC (BG.LN) said Friday it has made a new oil discovery in offshore Brazil, in the same oil block as the promising Carioca find, sending its shares up more than 3%.
The global energy giant said the discovery, the size of which has not yet been announced, is in the Santos Basin within the BM-S-9 concession area, in which it has a 30% interest.
Brazililan state-run energy giant Petroleo Brasileiro SA (PBR), or Petrobras, has 45% in BM-S-9, and Spanish-Argentine energy group Repsol-YPF (REP) holds the rest.
"On completion of the well, the partners will undertake further assessment to define the dimensions and characteristics of the reservoir prior to submitting an Evaluation Plan to the National Petroleum Agency," the company said in a statement.
BG's Chief Executive, Frank Chapman said: "This new discovery extends the very significant potential of this world class hydrocarbon province. Together with our partners, we will now continue to advance our evaluation and development program, targeting initial production from the pre-salt Santos Basin during 2009."
BG's new oil discovery will be taken positively by the market Friday, David Thomas from Citigroup (C) in London said.
"I expect the news will also have a positive read across for Petrobas and Repsol," he added. He reckons BG's shares have been weak against the sector recently, and reckons this news will help share-price movement.
At 0706 GMT, BG shares were up 32 pence, or 2.5%, at 1274p.
In April, the head of Brazil's National Petroleum Agency, or ANP, sent a shockwave through the global oil industry when he said reserves in the area around Carioca could be as much as 33 billion barrels of oil equivalent, or BOE. Company officials so far had declined to confirm the estimate and said that further drilling was needed before any estimate on volumes could be made.
Petrobras, BG and Repsol have announced a series of oil discoveries in the pre-salt layer of the Santos Basin in recent months, including the massive Tupi oil field. In November, Petrobras estimated that Tupi could have recoverable reserves of up to 8 billion BOE. Tupi lies in an area close to the BM-S-9 block.
More important, a gigantic geographical structure that industry experts and analysts believe could contain several oil discoveries the size of Tupi crosses the BM-S-9 block, as well as three other exploration blocks: BM-S-8, BM-S-21 and BM-S-22.
Company Web site: bg-group.com
|
