BG’S big profit hope on oil find

Source: Stock Market Digital

Date :15/04/2008 11:46:18

Shares in UK gas producer BG Group Plc rose six percent in morning trading due to eager investors betting on the potential size of Carioca oil discovery in Brazil.

Chief of the Brazil’s petroleum agency revealed the site, which is situated in a field in the Santos Basin, off the coast of Rio de Janeiro, could contain 33 billion barrels of oil equivalent.

BG have 30 percent stake in the field, Petrobras (Brazil’s state-owned oil group) owns 45 percent, with Spain’s Repsol owning the last 25 percent.

Tupi

It could be five times bigger than the size of the giant Tupi oil field, discovered last November.

Official estimates claimed that its resources were anywhere from 12 billion to 30 billion. Recoverable reserves were estimated at five billion to eight billion.

BG owns a 25 percent stake in Tupi, Petrobras, the project operator, holds a 65 percent stake and Galp Energia holds the last ten percent.

Largest oil find

Tupi’s value net to BG is said to be 50 pence to 300 pence based on estimates of 12 to 30 billion boe. Carioca is said to be 250 pence to 1,500 pence, and that even at the lower end of the range Tupi and Carioca’s combined worth could be around 300 pence to BG.

Once the field is fully developed around 2015, BG said that Tupi has the capacity each day, to produce around 500.000 to 1.0 million barrels of oil equivalent.

Carioca (also known as Pan de Azucar or Sugarloaf), would become the world’s largest oil find in 30 years. However Brazil’s head of National Oil Agency, Haroldo Lima, cautioned that the estimates were, “unofficial.”

April 15, 2008