Oil industry boost as BG Group doubles estimates

BG Group has provided an oil industry boost by stating that it has doubled the estimate of its oil and gas reserves in Brazil.

The news sent the organisation's stock soaring by almost five per cent and comes after a number of successful exploration successes in the pre-salt floor of the Santos Basin in recent years.

Sir Frank Chapman, chief executive of BG, said that the upgrade delivered by the company was "significant".

"The doubling of our estimated Santos Basin mean reserves and resources demonstrates the continued rapid evolution of our understanding of these enormous discoveries," he added.

Analysts greeted the news with positive feedback, with Jeffries reporting that its value per barrel is also likely to increase.

"We anticipate that excellent well deliverability and hydrocarbon recovery will also improve our modelled value per barrel. Risks continue to be project delivery constraints and cost increases in Brazil," said Brendan Warn, Iain Reid and Laura Loppacher from the firm.