BG Group Plc, which plans to invest $30 billion in Brazil in the next decade, said it needs fewer wells than first estimated to reach plateau production at offshore fields.
Appraisal drilling and initial production show wells will flow for longer at higher rates and cost less per barrel than expected, said Chief Executive Officer Frank Chapman. Last month, the company doubled its estimate of reserves and resources in Brazil’s Santos Basin to about 6 billion net barrels of oil equivalent.
“We expect all of this resource to be recovered using the same surface facilities we’ve envisaged in our field development plans,” Chapman told reporters on a conference call. “We now expect an earlier ramp-up to plateau production from fewer wells.”
BG rose 61.5 pence, or 4.3 percent, to 1,486 pence in London, the highest price since May 3. It was the best performer on the 102-member FTSE 100 Index.
BG, Petroleo Brasileiro SA, Galp Energia SGPS SA and Repsol YPF SA plan to use as many as 13 floating, production, storage and offloading vessels, or FPSOs, to pump oil and gas off Brazil’s coast. They will have a combined capacity of 2.3 million barrels of oil a day. The Lula, Guara, Cernambi, Iara and Carioca fields account for 95 percent of BG’s total reserves and resources in the Santos Basin, the company said today in a statement.
20 Percent ‘Feasible’
The partners plan to increase FPSO capacity to allow higher extraction rates at “higher aggregate plateau production,” Chapman said. “You can de-bottleneck all those facilities, which is a common goal for all offshore facilities, and numbers up to 20 percent could be feasible, but I am not giving this as a target.”
BG and Petrobras will connect the first export gas pipeline from the Lula field, formerly known as Tupi, via the Mexilhao platform to the land terminal “in the coming days,” Chapman told investors on a conference call.
To date, BG has exported about 1 million barrels of oil net to the company from the Lula field, the largest oil discovery in the Americas in more than 30 years. The wells off Brazil can pump 25,000 to 50,000 barrels of oil a day, Chapman said.
To transport oil from the Brazilian fields, BG took delivery of the Windsor Knutsen oil tanker, which was converted from a conventional Suezmax vessel into the world’s largest shuttle tanker, with capacity of 1.1 million barrels, BG said.
In June, BG agreed with Teekay Offshore Partners LP to charter four more Suezmax-size shuttle tankers with expected deliveries between 2013 and 2014. Samsung Heavy Industries Co. will build the vessels in South Korea.