BG Starts Commercial Oil Output From Brazil’s Pre-Salt Sapinhoa
BG Group Plc (BG/) started oil production at the Sapinhoa field off Brazil, one of the “Big Five” discoveries in the pre-salt Santos Basin.
Along with Petroleo Brasileiro SA (PETR4) and Repsol YPF SA (REP), BG plans to pump an initial 25,000 barrels a day from the deposit in BM-S-9 Block, the Reading, England-based producer said today in a statement. Sapinhoa holds about 2.1 billion barrels of recoverable oil and gas, according to Petrobras, Brazil’s state- controlled oil producer.
The Cidade de Sao Paulo floating production, storage and offloading, or FPSO, will reach peak output in the first half of 2014.
BG slumped the most on record on Oct. 31 after saying output growth would stall in 2013 following delays at projects in the U.S., North Sea, Brazil and Egypt. The company plans to invest $30 billion in Brazil, where it expects to pump about a third of its worldwide output by 2020.
This is a “reassuring step forward” in light of the production warning, Simon Hawkins, a London-based analyst at N+1 Singer Ltd., wrote in an e-mailed report.
Sapinhoa is the second of the so called “Big Five” fields in the BM-S-9 and BM-S-11 blocks where investors plan to install 15 FPSOs. The Lula field, formerly known as Tupi, was the first find in the pre-salt deposit in the Santos Basin, and started production in October 2010.
BG has a 30 percent interest in the BM-S-9 Block, of which Petrobras is the operator with 45 percent and Repsol Sinopec Brasil has 25 percent.
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