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Daily Telegraph: BG has bigger oil and gas reserves in Brazil

By Russell Hotten, Industry Editor
Last Updated: 2:35am GMT 08/02/2008

BG Group, the UK’s third-largest producer of natural gas, has tripled its estimate of reserves held in the giant Tupi field off Brazil.

The success of the Tupi discovery, one of the largest finds in decades, is key to BG’s long-term growth and the company said yesterday the field may contain between 12bn-20bn barrels of oil – up from previous estimates of 1.7bn-10bn barrels.

BG chief executive Frank Chapman said Tupi, discovered last year, “is probably about the same size as Kashagan was at the same stage of [its] appraisal.” This field, in Kazakhstan, has about 12bn barrels of recoverable oil and gas. BG owns a 25pc stake in the Tupi field, which is controlled by Brazil’s Petroleo Brasileiro.

Mr Chapman said that Tupi would require tens of billions of pounds of investment, but could start pumping between 20,000 and 100,000 barrels of oil and gas a day after 2010.

Jason Kenney, oil analyst at ING, said: “BG Group is now all about Tupi.”

The news accompanied better-than-expected fourth-quarter profits from BG and growth prospects that far exceed its bigger rivals such as BP and Royal Dutch Shell. Net profit for the last three months rose 25pc to £486m, thanks to a rise in production, higher gas prices and record oil prices. Excluding non-operating items, profits rose 36pc to £558m.

Production improved 4pc. Bigger rivals recently posted falls in production. BG said production growth from 2005 to 2012 would be 6pc-8pc a year, higher than BP and Shell, with 1pc-2pc predicted. The rate at which BG is replenishing its oil and gas with new discoveries was only 54pc, though this was partly due to field sales. The ratio will rise in the next few years.

Mr Chapman said North Sea gas from the Buzzard field was also very important to the BG. The fourth-quarter dividend, payable on May 23, is up 37pc to 5.76p, making 9.36p for the year. and its also non-profit sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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