BG Finds Oil at Another Well in Brazil’s Santos Basin (Update2)

By Guy Collins and Eduard Gismatullin
June 5 (Bloomberg) -- BG Group Plc, the U.K.’s third- largest natural gas producer, said it discovered oil at another well in the pre-salt Santos Basin off Brazil’s shore.
The Iracema well is under 2,210 meters (6,850 feet) of water and located about 250 kilometers (160 miles) from Rio de Janeiro and 33 kilometers northwest of the Tupi well. Petroleo Brasileiro SA and Galp Energia SGPS SA of Portugal are the project partners.
A “test confirmed the presence of light oil located at depths of around 5,000 meters,” Reading, U.K.-based BG said today in a statement. “Drilling is ongoing.”
Tupi is part of the so-called pre-salt area, which may hold 50 billion to 100 billion barrels of oil, enough to supply all U.S. needs for seven to 13 years. Tupi is the largest oil find in the Americas since Mexico’s Cantarell was discovered in 1976.
Petrobras said yesterday the Iracema well “reinforces expectations” its Tupi discovery holds five to eight billion barrels of oil and natural gas.
The partners last month announced the start of commercial oil production at the Tupi field. They also said they planned to start drilling a second well, Tupi P1, this month.
BG plans to invest as much as $5 billion through 2012 to develop pilot projects in the Tupi, Iara and Guara fields. Its share of output from the fields will reach 400,000 barrels of oil equivalent a day by 2020, BG said in its annual report.
Together with Petrobras and Repsol YPF SA, BG reported a discovery of light oil at the Iguacu well in the Santos Basin in April. It also found oil at the Corcovado-1 well in the same region. BG plans to drill the Sagittario well off Brazil’s shore this year.
Galp, Portugal’s biggest oil company, is expanding exploration in regions including the Santos Basin and Angola to gain greater access to crude supplies and rely less on refining and distribution of fuel in Iberia. It plans to invest a total 4.3 billion euros ($6.1 billion) through 2013 to develop projects including Tupi.