BG Group moves towards production on Brazilian oilfields

Gas explorer BG Group has taken a step towards starting production from three oil and gas fields off the coast of Brazil.

BG said its partner Petróleo Brasileiro (Petrobras) had submitted declarations of commerciality (DoC) to the Brazilian National Agency of Petroleum, Natural Gas and Biofuels (ANP) for three separate oil and gas accumulations in the Iara area. Petrobras runs block BM-S-11 in the pre-salt Santos Basin.

Iara is about 250 kilometres off the coast of Rio de Janeiro, in water depths of around 2 270 metres. All fields contain good quality oil, BG said.

The DoC submission follows an exploration and appraisal programme which began in 2008 and consisted of acquiring 3D seismic data, drilling seven wells as well as performing an extended well test.

"The encouraging results from this programme continue to reinforce BG Group's view of gross recoverable volumes in the BM-S-11 Iara area," BG said.

The three fields extend outside the BM-S-11 Iara concession area and into the Entorno de Iara transfer of rights area which is 100% operated by Petrobras and will therefore be subject to unitisation agreements.

The regulation requires a development plan to be submitted within 180 days of the DoC. However, because of the need for unitisation agreements to be negotiated, the ANP may amend this deadline and allow submission of a unitised area development plan when the unitisation agreement is signed.

BG said: "The DoC is another major milestone in the first phase of development of BG Group's significant interests in the region, marking the start of the production period of the fields."

BG has a 25% interest in the BM-S-11 concession, with Petrobras owning 65% and Petrogal 10%.