BG Group Plc, the U.K.'s third- largest energy producer, rose to a 2 1/2 year high after saying its share of the initial phase of Brazil's Tupi and Guara fields will be about 600 million barrels of oil equivalent.

BG advanced as much as 3.4 percent to 1,331 pence in London trading, the highest since May 27, 2008. The shares were 30.5 pence higher at 1,318 pence as of 9:45 a.m. local time, extending their gain for the year to 17 percent.

The first two floating production, storage and offloading vessels, or FPSOs, on the Tupi field as well as another at Guara field will have a combined daily pumping capacity of about 340,000 barrels of oil and 531 million standard cubic feet of gas. The first unit at Tupi started in October, while the other two vessels are expected to come online in 2013, BG said today in a statement.

Reading, England-based BG in November increased estimates for gross energy resources at the Tupi, Iracema, and Guara fields in the Santos Basin by 34 percent to 10.8 billion barrels of oil equivalent. Last month, BG and its partners signed a $3.5 billion contract to order hulls for eight more FPSOs for the full development of the Brazilian fields.

The three FPSOs will recover total gross reserves of around
2.2 billion barrels of oil equivalent, BG said.

BG said it anticipates "very low" unit technical costs for the initial phase given the "outstanding reservoir characteristics and high recovery per well."

It forecast capital costs of $5 and operating costs of $9 a barrel of oil equivalent.

Eoin Treacy's view BG Group is active in a number of promising areas not least Brazilian and Australian offshore oil and gas. (Also see Comment of the Day on November 3rd for more on Australian energy companies).

The share broke successfully above 1200p in November, consolidated above the 200-day MA and is now rallying towards the 2008 peak near 1400p. A downward dynamic would be required to delay potential for further upside.