BG Group announce third FPSO vessel on-stream in Santos Basin

BG Group today announced the start of commercial production from a third floating production, storage and offloading (FPSO) vessel on the Group's discoveries offshore Brazil in the pre-salt Santos Basin.

The Cidade de Paraty FPSO is the second unit deployed on the giant Lula discovery and is located approximately 300 kilometres off the coast of Brazil, in the north east corner of the BM-S-11 block.

BG Group Chief Executive Chris Finlayson said: "The start of production from our third FPSO vessel offshore Brazil, on time and on budget, marks another important success in delivering our 2013 milestones. Also, it demonstrates continued progress in the development of our major growth projects.

"We now have three FPSO vessels on-stream in the Santos Basin, two of which have started production this year alone as our development programme ramps up. It is a testament to the excellent working relationship we have with our partners and it shows the tangible progress we are making in bringing these world class discoveries to fruition in line with our plans.

"Looking ahead, the remaining 12 FPSOs committed for the first phase development programme are on schedule, with costs tracking on or under budget. The next two dedicated FPSOs in the programme will start production during 2014.

"The development programme for our offshore interests in Brazil is going very well and we expect this first phase to deliver some 500 000 barrels of oil equivalent per day (boed) net to BG Group at current equity levels by 2020. We expect that to rise to well in excess of 600 000 boed net to the Group as the full potential of these discoveries is realised through further development."

The Cidade de Paraty has capacity to process 120 000 barrels of oil per day and 176 million standard cubic feet of gas per day. The first month of production will be restricted to around 13 000 barrels of oil per day, being gradually increased as the gas reinjection systems are commissioned. It is expected that peak production will be reached in the second half of 2014.

BG Group has a 25% interest in Block BM-S-11 (Petróleo Brasileiro S.A., operator, 65% and Petrogal Brasil 10%) and a 30% interest in Block BM-S-9 (Petróleo Brasileiro S.A., operator, 45% and Repsol Sinopec Brasil 25%).