BG Group approves 4.5bn-dollar project development in Brazil

BG Group and its partners have approved the development of their Santos Basin pre-salt projects in blocks BM-S-9 and BM-S-11, offshore Brazil.

The contracts, totalling $4.5bn, have been signed for the construction of the first six topside modules and integration packages for the eight domestic floating production, storage and offloading units (FPSOs) to be used on the projects.

The group said that the contracts represent another "milestone" in the fast-track, first-phase development of the big five pre-salt discoveries in BM-S-9 and BM-S-11. Contracts for the two remaining topside modules and integration packages are expected to be awarded within the next 18 months.

Try 6 free issues of MoneyWeek today

Get unparalleled financial insight, analysis and expert opinion you can profit from.

Start your trial

Sign up for MoneyWeek’s free twice-daily newsletter.

Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.

Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.

Sign up

BG also said that the BM-S-11 consortium have decided totender for at least one additional chartered FPSO to be used in areas with different topside requirements.

"Progress with delivering on the vast potential in our world-class fields offshore Brazil continues apace," said BG Chief Executive Sir Frank Chapman.

"The approval for these contract awards, along with the tender process for an additional international FPSO, demonstrates the close alignment between partners on the fast-track, first-phase delivery plans for these outstanding resources."

BG has a 30% interest in Block BM-S-9 and a 25% stake in Block BM-S-11.

Shares edged 0.19% higher to 1,292.5p in early trading on Friday.

BC