BG Group said yesterday that production from the first permanent floating production vessel on the Tupi field in block BM-S-11 in the Santos Basin, offshore Brazil had begun.
The Cidade de Angra dos Reis, initially connected to well RJS-660 (known as Tupi-P1), is expected to produce up to 100,000 barrels of oil and up to 177million cubic feet of gas per day.
Tupi-P1 is close to the 3-RJS-646 well (known as Tupi Sul) where the Cidade de Sao Vicente production vessel has been conducting an extended well test since May 2009.
This has produced 7million barrels of oil to date.
BG Group chief executive Frank Chapman said: “The extensive exploration and appraisal programme, and subsequent analysis to date, confirms the huge resource potential, excellent reservoir characteristics and robust economics of the discoveries.
“Extended well testing and the commissioning of the first permanent Tupi facilities deliver tangible momentum and certainty to our development plans in a play that underpins a substantial part of BG Group’s growth plan extending over the next decade.”
It has been estimated that the Tupi area could hold 5-8billion barrels of oil equivalent. BG Group has a 25% interest in the BM-S-11 concession while operator Petrobras has 65% and Petrogal 10%.
Shares in south Atlantic oil and gas explorer Desire Petroleum fell back nearly 23% to 90.75p after soaring on Wednesday on speculation of a bid approach for the Falklands-focused explorer plus rumours of an oil find.
Desire said yesterday it noted press speculation and confirmed it had not received any approaches concerning a possible offer.
The company said earlier this month it would drill a sidetrack well on its Rachel prospect in the North Falkland Basin after the original well failed to find oil.
It said yesterday the well had reached its target depth on Wednesday and the process of pulling out of the drill hole was under way.
Once this was complete, logging operations would start and a further announcement made once the results were known.