Brazil: BG Group Announces Certified Resources Upgrade of 2.7 bboe to Tupi, Iracema and Guara fields

BG Group today announced a 2.7 billion barrels of oil equivalent (boe) upgrade to estimates of gross resources for the Tupi, Iracema, and Guará fields in the Santos Basin, offshore Brazil.

BG Group’s new aggregate best estimate of economically recoverable gross resources* for these fields amounts to 10.8 billion boe, representing a 34% increase to the 8.1 billion boe mid-point of the Group’s previous indicative resource range.

As a result of the upgrade, BG Group’s aggregate best estimate of its economically recoverable net resources on Tupi, Iracema and Guará now stands at 2.8 billion boe.

BG Group’s latest analysis is based on the development by the Group of new and significantly more sophisticated reservoir models which have assimilated and interpreted substantial amounts of information (much of it new and gathered over the last year) including:

* 3 200 square kilometres of 3D seismic data;

* results from 9 completed wells (including the 2 original discovery wells on Tupi and Guará);

* 10 drill stem tests; and

* the detailed insights gained from the extended well test on Tupi, which has produced 7.6 million boe to date.

BG Group engaged the oil and gas consulting firm Miller and Lents, Ltd (MLL) to provide expert independent verification of the estimates of resources on Tupi, Iracema and Guará. MLL were provided with full access to BG Group’s data and development models for these fields and have certified their best estimate for gross resources for these fields to be 10.8 billion boe in aggregate.

Development progress

The certified resources upgrade on Tupi, Iracema and Guará comes as BG Group and partners continue to make significant progress with the commercialisation of these resources. Key field development planning and implementation highlights to date include:

* the first permanent Floating Production, Storage and Offloading (FPSO) facility is now on station on Tupi and commenced production in October 2010****;

* two further FPSOs have been ordered, to be deployed on the Tupi field and on Guará;

* negotiations are progressing on the deployment of additional production modules for Tupi, Iracema and Guará; and

* the gas export pipeline to Mexilhao has been completed.

BG Group Chief Executive Frank Chapman said: “This is a material upgrade to what was already a world-class resources position. Only four years have elapsed from first discovery to first production in a play that is at the centre of BG Group’s growth plans over the decade ahead. We now have a materially enhanced resource position, production underway from permanent facilities on Tupi and first-phase development plans coming to fruition on fields which we expect to deliver substantial shareholder value for many years to come.”

[mappress]

Source: BG Group, November  2, 2010;