(Adds closing share gains in fourth, seventh paragraphs.)
June 30 (Bloomberg) -- BG Group Plc, the U.K.’s third- largest oil and gas producer, doubled its estimate of reserves and resources in the Santos Basin in Brazil, bolstering plans to increase production. Shares rose.
BG estimates the fields hold about 6 billion barrels of oil equivalent net to the company, with potential for as much as 8 billion barrels, it said in a statement today. It increased the previous estimate of 3 billion barrels after drilling wells and starting oil production last year.
“This is clearly positive but we also want to see the split between the existing fields,” Peter Hutton, a London- based director of energy research at RBC Capital Markets, said by phone. “Doubling the reserves would add in an implied nearly two pounds” to BG’s reserves value.
BG, based in Reading, climbed 4.7 percent to 1,414 pence in London trading, its biggest gain since Jan. 31.
BG along with partners Petroleo Brasileiro SA, Galp Energia SGPS SA and Repsol YPF SA plan to pump 2.3 million barrels of oil equivalent a day by 2017 off Brazil after they committed to a $13 billion investment program last year, BG’s Chief Executive Officer Frank Chapman said in February.
The partners are developing Lula, former Tupi, Carioca, Guara, Cernambi and Iara fields.
Galp rose 6.5 percent to 16.45 euros in Lisbon. Repsol gained 3.2 percent at 23.94 euros in Madrid.
“Solid progress with the fast-track development program will see gross installed production capacity rising steadily,” Chapman said in the statement. “This, alongside progress with major ventures in Australia, the U.S. and across our global portfolio.”
The partners plan to deploy 13 floating production, storage and offloading vessels, or FPSOs, off Brazil to extract oil and gas. They plan to recover about 750 million barrels of oil equivalent per module, BG said in February.
--Editors: Will Kennedy, Stephen Cunningham
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