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The latest find by BG in the deep water off Brazil is a “supergiant” field and one which will outshine BP's “giant” discovery last week in the Gulf of Mexico, the company said today.
BG, the UK-based international oil and gas explorer, said today its Guara oil find in the oil and gas-rich Santos Basin in the south Atlantic contains between 1.1 to two billion recoverable barrels. That would indicate that Guara would dwarf Tiber, the major find south of Houston which BP trumpeted last week.
BP said Tiber, at six-and-half miles one of the deepest wells ever drilled, could contain as much as 3 billion barrels of oil though with today's technology only 500 million of that would be recoverable. That would make the Guara at least twice as big as Tiber and potentially four times as big.
Guara, however, is not by any means BG's biggest find in the Santos Basin where it is searching for and developing oil and gas prospects with its partners Petrobras and Repsol.
The Tupi find in the region is reckoned to hold as much as 30 billion barrels though the recoverable amount will be much less.
The Santos Basin's potential memorably led one City oil analyst to ask in the title of one research note “Are you Saudi in disguise?” indicating hopes that Brazil's reserves and production may at some stage rival the richest Middle Eastern states. BG chief executive Frank Chapman has long chided stockmarket investors for failing to wake up to the opportunities that the company is uncovering off Brazil.
Today he told shareholders: “The well test results on Guara were excellent and underscore again the outstanding potential in BG Group's extensive position in the world-class Santos Basin.
“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.”
A spokesman for the company said: “This is significant. It is big and bigger than we first thought.”
BG which owns 30% of Guara says that during testing oil flowed at 7200 barrels a day and indications are that a permanent production well would be capable of producing initial rates of up to 50,000 barrels a day targeting first production from 2012.
A production rate of 50,000 barrels a day from Guara is the equivalent of the daily output of the whole of Venture Production, the North Sea gas producer which last month was bought by Centrica for £1.3 billion.
BG said Guara would come on stream after the first phase of Tupi which is forecast to produce 100,000 barrels a day by the end of next year.
Malcolm Graham-Wood at broker Hanson Westhouse said: “BG have announced very positive news from its Guara prospect.
“This is much better than had been expected and adds a significant amount to our valuation. Although investment levels are very high the rewards are exceptional. We feel this news should propel BG to more than make up the ground it lost to the rest of the market … BG remains one of the outstanding investment opportunities in the sector and indeed the market.”
BG shares were 18p better at 1074p.
Reader views (8)
Right!! That's it! Grab your boots George, we're of to war with Brazil, forget messing about in the desert with the Taliban, Brazil here comes Uncle Sam, with Flash Gord (advised by Tony) in his wake.
- Chicken Little, Essex
CO2 is not the cause of increased temperature on Earth. Mars & all the planets were heating up in the same way as earth according to eminent scientists who control and run the observatories such as the Keck, Aracebo and others that are worth many £billions. These men are not hacks bought off by a cult lobby lead by Gore & huge money. It is now making a fortune for their banking buddies.
It’s not our CO2 emissions that have caused Mars and the other temperatures to increase. It is the great furnace in the sky that all men can see, it’s the Sun that went through high activity together with black spots! Having quietened down over the past few years the embarrassing fact is the temperatures world wide have also fallen.
The fact the 1700’s was the coldest century on record even though the CO2 count was far higher than today. If today’s science is correct and CO2 was the problem then it would have been hotter in the 1700’s not colder. The Thames froze over during that time. The famous but unpublished IPCC report withdrew this fact and many scientists demanded their names be withdrawn, hence besides the tea boy and cleaners there are few recognisable signatures on that report. Incidentally Gore’s version of the unpublished report was so full of errors that it was nearly rejected as a scientific paper. The Green Cult are mad as hatters & will take us back to the stone age. Oh! the CO2 is only 1/3700 of 1% of the air mix on the planet.
- Jas, Camberley UK
Perhaps they can stop stealing the oil from Nigeria, Afghanistan, Gaza...
- Neil, London, London UK
more coruption
- Rsaviour, lonodn england
Great...just what the world needs, more of the black poison...cheaper oil, less investment in renewables, what is it that sends humanity hurtling towards the abyss for the sake of short term cash?
- Dave Henderson, England UK
And of course the price of ALL fuels will increase.
- G.Diamond, Romford Essex
It isn't in a politically unstable or hostile area, that makes it good news for all of us.
- Dave Morris, Sunderland
The Chancellor will be pleased.
- Shallotman, Basildon
