BG Group has confirmed high productivity from well tests on the Tupi North-East field in the Santos Basin, offshore Brazil.
The oil and gas operator said yesterday a test had shown productivity of 5,000 barrels of oil per day (bpd) at flow rates constrained by the capacity of the test equipment.
It said potential production from the well was estimated at about 30,000bpd.
The UK company added that an appraisal well had confirmed the widespread presence of an excellent-quality, light oil-bearing reservoir with high production capacity across the Tupi field. Chief executive Frank Chapman said: “The encouraging appraisal results on Tupi North-East provide more valuable information for the ongoing analysis of reserves in Brazil.
“We will continue to work with our partners to optimise development options for our interests in this outstanding area.”
Partners in Tupi are BG (25%), Petrobras (65% and operator) and Galp (10%).
BG has interests in five concessions in the deepwater Santos Basin, four operated by state oil company Petrobras, and one by BG.
The group also said yesterday it had agreed a deal with China National Offshore Oil (CNOOC) to supply 3.6million tonnes a year of liquefied natural gas (LNG) for 20 years, worth about £26.66billion to BG at current prices.
CNOOC will be supplied with LNG from a plant on Curtis Island, Queensland, Australia.
Additionally, BG Group may also supply CNOOC from its global LNG portfolio.
The Curtis Island site is being developed by BG’s wholly owned Australian subsidiary QGC and will be supplied with coal-seam gas from its extensive acreage.
The plant is due to come on stream by 2014.
The deal marks the first sale of LNG from coal-seam gas into China, the world’s fastest growing gas market.
BP chief executive Tony Hayward was reported yesterday to have said that if crude oil prices fell much below $60-$70 a barrel for any length of time investment in new sources of supply would stop.
Mr Hayward also said the plentiful deepwater oil resources in areas such as the Gulf of Mexico and Brazil, plus Canada’s oil sands, needed an oil price above this level to attract investors. He said Opec countries, in particular Saudi Arabia, also needed oil prices at $60-$70 to expand capacity and meet their domestic financial needs.