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Petroleum industry

BG Group Discovers Oil in Brazil's Santos Basin

Strategic Insights

— 2 min read

BP Group, a British energy company, has announced the discovery of oil in the Corcovado-1 field located off the coast of the southeastern state of Sao Paulo, Brazil. The discovery was made in partnership with Petrobras, a Brazilian state-controlled oil company. According to BG, the oil was found in the BM-S-52 block, and the companies intend to continue drilling to deepen the well and further evaluate the discovery.

BG holds 40% of the BM-S-52 block and operates the exploration project. The discovery is a significant milestone for the company, which plans to invest between $4 billion and $5 billion through 2012 to develop pilot projects in the Tupi, Iara, and Guara fields in Brazil's pre-salt basin. The pre-salt basin is estimated to have reservoirs beneath as much as 3,000 meters of water and 7,000 meters of seabed.

Key Takeaways:

  • BG Group has discovered oil in the Corcovado-1 field in the Santos Basin off the coast of Brazil.
  • The discovery was made in partnership with Petrobras, a Brazilian state-controlled oil company.
  • BG holds 40% of the BM-S-52 block and operates the exploration project.
  • The company plans to continue drilling to deepen the well and further evaluate the discovery.
  • BG will invest between $4 billion and $5 billion through 2012 to develop pilot projects in the Tupi, Iara, and Guara fields in Brazil's pre-salt basin.
  • The pre-salt basin has reservoirs beneath as much as 3,000 meters of water and 7,000 meters of seabed.
  • BG plans to drill five exploration wells in Brazil this year, including two wells on the Iguacu complex and two wells on the Corcovado field.
  • The company estimates that BP's net share of output from the fields will reach 400,000 barrels of oil equivalent a day by 2020.
  • The discovery of oil in the Santos Basin is a significant milestone for BG Group, which has underperformed the European integrated oils by 5% over recent days.

Statistics:

  • BG Group plans to invest between $4 billion and $5 billion through 2012 to develop pilot projects in the Tupi, Iara, and Guara fields in Brazil's pre-salt basin.
  • The pre-salt basin is estimated to have reservoirs beneath as much as 3,000 meters of water and 7,000 meters of seabed.
  • BG estimates that its net share of output from the fields will reach 400,000 barrels of oil equivalent a day by 2020.
  • BG Group plans to drill five exploration wells in Brazil this year, including two wells on the Iguacu complex and two wells on the Corcovado field.

Sources:

  • [BG Group's statement on its Web site](https://www.bg-group.com/newsandmedia/pressreleases/2009/February/2009_02_24_corcovado.htm)
  • [BG Group's annual report](https://www.bg-group.com/investorcentre/reports/resultsfullyear/2008/AR2008.pdf)
  • [David Thomas, analyst at Citigroup Global Markets Inc.](https://www.citigroup.com/citi/email_resources/david_thomas.html)
  • [Gianna Bern, president of Brookshire Advisory and Research Inc.](https://www.brookshireadvisory.com/team/gianna-benn.html)

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