DoC for Iara Area, Brazil

BG Group, leader in exploration and LNG, today announced that its partner Petróleo Brasileiro S.A. (Petrobras), as the operator of block BM-S-11 in the pre-salt Santos Basin, has submitted the 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, offshore Brazil. As part of the DoC, the consortium has suggested that the new fields be designated Berbigão, Sururu and Atapú West.

The Iara area is located approximately 250 kilometres off the coast of Rio de Janeiro, in water depths of around 2 270 metres. All fields contain good quality oil, of approximately 24 to 30 degrees API.

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. The DoC notification to the ANP includes the operator’s estimates of total recoverable volumes of the three accumulations.

These three accumulations 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. Unitisation of the Entorno de Iara area will be required with Berbigão to the north and south, with Sururu to the north and south and with Atapú West to the east.

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.

The initial development of the unitised accumulations is expected to be based on three FPSOs, adding to the 10 production units currently planned for the Lula and Iracema areas. Subject to a complementary campaign for data acquisition, additional production units could be contracted by the consortium.

Ahead of the submission of the Development Plans for ANP, the partners will be working on the deployment and allocation of the initial planned FPSOs as well as negotiating the required unitisation agreements.

The total amount of resource that BG Group believes will ultimately be recovered is not expected to be affected.

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 Group has a 25% interest in the BM-S-11 concession, offshore Brazil (Petrobras, operator 65%, Petrogal 10%).