| Block |
BG Group (%) |
Partners (%) |
Fields/prospects |
| BM-S-9 |
30 |
Petrobras 45, Repsol YPF Brasil S.A. 25 |
Carioca, Guará, Abaré West, Iguaçu |
| BM-S-10 |
25 |
Petrobras 65, Partex 10 |
Parati, Macunaíma |
| BM-S-11 |
25 |
Petrobras 65, Petrogal 10 |
Lula, Cernambi, Iara |
| BM-S-50 |
20 |
Petrobras 60, Repsol YPF Brasil S.A. 20 |
Sagittario |
| BM-S-52 |
40 |
Petrobras 60 |
Corcovado |
Excellent progress has been made with BG Group’s Santos Basin interests. There has been a second material upgrade* to gross resource estimates; production has commenced from the first permanent floating production, storage and offloading (FPSO) module on Lula; and the consortium is progressing the contracting of a further 12 FPSOs.
In June 2011, BG Group issued a material reserves and resources upgrade* for its interests in the pre-salt Santos Basin. Mean total reserves and resources are now estimated to amount to some 6 billion barrels of oil equivalent (boe) net to BG Group, with an upside potential of 8 billion boe net.
The mean total reserves and resources represents a doubling of BG Group’s previous best estimate of 3 billion boe prevailing at the time of the Group’s February 2010 Strategy Presentation. The aggregate range of total reserves and resources net to BG Group is from 4 billion boe (P90) to 8 billion boe (P10).
The Lula, Guará, Cernambi, Iara and Carioca fields account for 95% of BG Group’s total reserves and resources in the Santos Basin.
BG Group’s new estimates are based on analysis of a wealth of drilling and appraisal data that has been gained in the Santos Basin, including:
- 29 wells drilled in existing discoveries;
- 19 drill stem tests (DSTs) on current discoveries;
- the shooting and analysis of over 14 400 square kilometres of 3D seismic;
- analysis of the extended well test (EWT) on Lula South and early results from the Guará EWT;
- production from the first permanent FPSO on Lula;
- development plans that include enhanced recovery processes to improve ultimate recovery factors; and
- cost optimisation, potential de-bottlenecking of facilities and greater well productivity.
Significantly, BG Group expects that virtually all of the additional resources announced in June 2011, contained within the Lula, Guará, Cernambi, Iara and Carioca fields, will be recovered from the same surface facilities envisaged in BG Group’s field development plan prior to the resources upgrade.
The incremental volumes are thus of a substantially higher value and are expected to result in significant unit cost reductions and higher unit value for the now increased total resources base.
In December 2010, BG Group provided additional data* on operational and capital costs. The cost update related to the first two FPSOs on the Lula field and the first FPSO on the Guará field. The three FPSOs are expected to recover total gross reserves of approximately 2.2 billion boe – approximately 600 mmboe net to BG Group – within the concession periods, utilising a total of approximately 40 production and injection wells. In light of the outstanding reservoir characteristics and high recovery per well, BG Group anticipates very low unit technical costs for this initial phase of development, amounting to: capital costs of $5/boe and operating costs of $9/boe.
BM-S-9
In 2007, the Carioca well on BM-S-9 (BG Group 30%) was declared a discovery and the Guará well was announced as a discovery in 2008. Since the initial discoveries there have been further drilling successes including: Iguaçu, Abaré West, Guará Norte, Carioca North-East and Guará Sul.
The exploration success with Guará has led the partnership to fast-track a 120 000 bopd and 177 mmscfd FPSO initial development phase, with the objective of achieving first production in 2013. Further development phases on Guará are expected to lead to additional production capacity of up to 150 000 bopd oil and 212 mmscfd gas. An EWT commenced on Guará in December 2010 and was completed at the end of July 2011.
The Carioca North-East well was announced as a discovery in early 2011. The well discovered light oil, nine kilometres north-east of the original Carioca discovery well. An EWT will follow later in 2011. The Carioca Sela appraisal well is also planned for later in 2011.
BM-S-10
In 2006, the Parati well in BM-S-10 (BG Group 25%) was declared a discovery. A second well, Macunaíma, was declared a discovery in February 2011. Further evaluation of this discovery continues.
BM-S-11
Lula and Cernambi
Lula and Cernambi in BM-S-11 (BG Group 25%) are very large structures with significant reserves potential. Lula discovery well was drilled in 2006 and the Cernambi discovery well which confirmed the presence of light oil in the north-west of the evaluation plan area was drilled in 2009.
There has been significant activity on Lula and Cernambi since the original discoveries were made including appraisal wells, DSTs, EWTs and the start-up of the first permanent production facility. The first EWT on Lula flowed first oil in May 2009 and completed operations in December 2010. A second EWT on Lula North-East commenced operations in April 2011. The Lula North-East EWT is utilising the BW Cidade de São Vicente FPSO. Current gross production has peaked at 18 000 bopd, constrained by facilities.
In October 2010, BG Group announced that production from the first permanent FPSO on the Lula field had commenced. The Cidade de Angra dos Reis FPSO, which is initially connected to Lula-P1, is expected to produce up to 100 000 bopd oil and up to 177 mmscfd gas.
In December 2010, BG Group announced that its partner Petrobras, as the operator of block BM-S-11, filed the Declaration of Commerciality (DoC) with the Brazilian National Agency of Petroleum, Natural Gas and Biofuels for the accumulations of light oil and gas in the Lula and Cernambi areas. The DoC is another significant milestone in the development of the Group’s substantial interests in the region, marking the start of the commercial production phase for the fields and setting the licence period to run to 2037.
Iara
In 2008, BG Group announced the completion of drilling on the Iara well also in the BM-S-11 concession on a step-out block. In March 2011, BG Group announced the successful completion of drilling on the Iara Horst well. The well encountered good quality oil in a thick reservoir section. Initial results from Iara Horst have demonstrated superior reservoir characteristics to the discovery well located around eight kilometers away. A DST, completed in April 2011, confirmed reservoir quality and well productivity. Further evaluation activity continues, including a third appraisal well late in 2011 and an EWT is planned for 2013.
BM-S-50 and BM-S-52
An exploration well is planned for early 2012 on Sagittario (BM-S-50). On BM-S-52, BG Group has a 40% interest in the concession. Two exploration wells were drilled in 2009. The first, Corcovado-1, encountered hydrocarbons in April 2009. The rig then went on to drill a second well, Corcovado-2. The partners are progressing with the evaluation of these results.
FPSOs
BG Group is progressing the contracting of a further 12 FPSOs, four leased and eight owned, in addition to the one currently producing on Lula. These are due to come onstream progressively over the period to 2017, to yield a total scheduled production capacity of approximately 2.3 million boed.
Oil evacuation
During the second quarter of 2011, BG Group took delivery of the oil tanker Windsor Knutsen, which is being used to transport BG Group’s equity oil from Brazil. The Windsor Knutsen was converted from a conventional Suezmax tanker into the world’s largest shuttle tanker, with the capacity to hold 1.1 million barrels of crude oil. First crude oil from the Lula FPSO was lifted in July 2011 and delivered in August 2011. BG Group has also committed to charter four further Suezmax shuttle tankers which are expected to be delivered in the period 2013 to 2014.
Gas evacuation
Development plans for the associated gas resources in the Group’s Santos Basin interests have continued to advance. To evacuate the gas from Lula and across the Santos Basin, the partners are considering different options.
In 2010, a new pipeline was installed connecting the Lula field to the Mexhilão gas hub. This pipeline has the capacity for three FPSOs and further pipelines to other areas are under study, the first being planned for start-up in 2014.