OREANDA-NEWS. January 16, 2013. BG Group and its consortium partners announced the start of commercial production on time and on budget at the Sapinhoa field in block BM-S-9 offshore Brazil, one of the Group’s “big five” discoveries in the pre-salt Santos Basin, reported the press-centre of BG Group.

The Cidade de Sao Paulo floating production, storage and offloading (FPSO) vessel is the first unit deployed on the Sapinhoa field and the second of 15 FPSO vessels planned by the partners in blocks BM-S-9 and BM-S-11 in the first phase of development of the pre-salt Santos Basin. Development of the FPSO fleet continues to schedule, with costs tracking on or under budget.

BG Group Chief Executive Officer Chris Finlayson said: “The Sapinhoa field enters commercial production only four-and-a-half years after its discovery, a further demonstration of the excellent progress we are making in developing our world-class discoveries in the Santos Basin.

Installation of the Cidade de Sao Paulo was delivered to schedule and on budget, while a second FPSO on the Lula field (in block BM-S-11) is also on track for start-up later in 2013.

Together, these two new units will more than triple gross processing capacity from around 100 000 barrels of oil and 176 million standard cubic feet of gas per day to
340 000 barrels of oil and 528 million standard cubic feet of gas per day.”

The Cidade de Sao Paulo has capacity to process 120 000 barrels of oil per day and 176 million standard cubic feet of gas per day. The first well to connect to the vessel, 1-SPS-55, is expected to produce about 15 000 barrels of oil per day during a 90-day commissioning of natural gas processing and reinjection systems, with total capacity of more than 25 000 barrels of oil per day thereafter.

The oil produced from Sapinhoa is high quality and of medium density (30° API). Gas not used for reinjection will be transferred through the Lula-Sapinhoa-Mexilhao pipeline to an onshore treatment plant.

The consortium partners plan to connect another 10 wells to the Cidade de Sao Paulo in coming months, comprising five producing wells and five injection wells. Peak production is expected in the first half of 2014.

The Sapinhoa field development plan includes a second FPSO, the Cidade de Ilhabela, with production capacity of 150 000 barrels of oil per day and 212 million standard cubic feet per day of natural gas. It is on track to start production in the second half of 2014.

BG Group is the only international oil company with participation in the five big oil discoveries (Lula, Iracema, Sapinhoa, Iara and Carioca) in the pre-salt Santos Basin. BG Group has a 30% interest in Block BM-S-9 (Petroleo Brasileiro S.A., operator, 45% and Repsol Sinopec Brasil 25%). BG Group also has a 25% interest in Block BM-S-11 (Petroleo Brasileiro S.A., operator, 65% and Petrogal Brasil 10%).

Notes to Editors:
BG Group plc (LSE: BG.L) is a world leader in natural gas and oil, with a strategy focused on connecting competitively priced resources to specific, high-value markets. Active in more than 20 countries on five continents, BG Group has a broad portfolio of exploration and production, Liquefied Natural Gas (LNG) and transmission and distribution business interests. It combines a deep understanding of gas markets with a proven track record in finding and commercialising reserves.

For further information visit:  www.bg-group.com