Up to 100,000 B/D Brazil Tupi Field Output By 2011

LONDON (Dow Jones Newswires), July 24, 2008

A 50,000 to 100,000 barrel of oil equivalent a day pilot production scheme on Brazil's offshore Tupi field is planned to begin in 2011, the chief executive of BG Group PLC (BG.LN) Frank Chapman said Thursday.

Speaking in a conference call he said an extended well test, with production in the range 10,000 to 20,000 barrels of oil equivalent a day, will begin on Tupi later this year in advance of the pilot program.

BG and Petroleos Brasileiro SA (PBR) are in an advanced stage of procurement for all the equipment for the extended well test on Tupi and, "are making super progress with Petrobras in terms of contracting and soliciting tenders for equipment for that pilot scheme," he said. The first phase of full field development is planned for 2013, Chapman said.

"The numbers for the overall field developments are in the tens of billions of dollars, but these fields are strongly economic at prices significantly below the prices we have today," he said. Tupi is estimated to contain 8 billion barrels of oil equivalent in recoverable reserves.

Chapman said he was extremely pleased with the way Brazil is going.

"It isn't very often in your career that you enter a virgin basin and drill five wells on the bounce and they are all successes of this sort of magnitude," he said.

"We are very happy with Guara," a discovery BG announced in the BM-S-9 offshore block in the Santos basin in June, Chapman said. "It's possibly the best well yet in terms of reservoir conditions that we've found and gave us some real clues as to how we might develop other parts of the field.

"We will next year drill a well called Igaucu, also in BM-S-9, which will help us determine the extent of the connectedness of these various fields," he said. "My sense is...we're going to drill a whole sequence of successful wells and we are really delighted to be in the middle of this very important new play," Chapman said.

BG has filed plans for further drilling on the Carioca discovery with Brazil's oil agency ANP, and in 2010-2011 they plan extended well tests there.

Harold Lima, the head of ANP, said in April Carioca could contain reserves of 33 billion barrels of oil equivalent.

Copyright (c) 2008 Dow Jones & Company, Inc.


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