BG Group announces completion of drilling on Iara well in Santos Basin, offshore Brazil

BG Group today announced the completion of drilling on the Iara well (1-BRSA-618-RJS) in the BM-S-11 concession in the deep water, pre-salt Santos Basin. The exploration well discovered 26-30 API gravity crude oil.

The well discovered a particularly thick Sag reservoir interval with excellent porosity. This is another first class reservoir discovered in the Santos Basin in which BG Group has several interests.

Gross recoverable volumes are currently estimated to lie between 3 and 4 billion boe. Further appraisal and production testing is planned. The well will be suspended with the view to performing a future Drill Stem Test.

The discovery of Iara was first announced on 7 August 2008. It is the third well to encounter hydrocarbons within the BM-S-11 concession area. The first well, Tupi, was announced on 4 October 2006 and the second, Tupi Sul, on 21 September 2007. BG Group holds a 25 per cent interest in the concession together with the operator Petrobras (65 per cent) and Galp Energia (10 per cent).

The Iara well lies approximately 230 kilometres off the coast of Rio de Janeiro in water depth of 2 230 metres and reached a total depth of approximately 6 080 metres.

The Iara well discovery is the sixth consecutive drilling success in the deep water, pre-salt Santos Basin since BG Group and its partners began their drilling programme in 2005.

BG Group has been present in offshore Brazil since 2000 and has interests in seven concessions in the Santos Basin covering a total area of approximately 7 450 square kilometres.

BG Group Chief Executive Frank Chapman said: “These results from the Iara well met our best expectations and further enhance our confidence in the pre-salt Santos Basin as a most important future driver of BG Group’s growth. Brazil will become a very major production centre for our company and will sustain a major earnings contribution over at least three decades.”

BG Group and its partners will now work to submit an Evaluation Plan to the National Petroleum Agency (ANP) with future investment plans in the area.