BG. BG Grp.

U.K. oil major BG Group PLC (BG.LN) applauded the Brazilian government's intention to honor existing concession contracts for promising offshore oil deposits, the company said in a statement.

"We welcome the government's assurances that existing contracts will not be affected by the new legislation. We therefore believe that development of existing concessions will proceed as planned," BG said in an emailed statement.

BG is lead operator of the BM-S-52 block, which contains the Corcovado-1 discovery. The company has a 40% stake in the block, while Brazilian state-run energy giant Petrobras (PBR) holds a 60% share.

BG also has a 25% stake in the BM-S-11 block, which holds the Tupi and Iara discoveries. The two fields were estimated to hold recoverable reserves of between 8 billion and 12 billion barrels of oil equivalent.

Despite the proposed changes to Brazil's regulatory framework, BG said the overall regulatory stability made the country a good place to operate.

"We value the investor climate that Brazil has developed. Contract stability, particularly where companies have assumed considerable risks and technical challenges, is a key principle," BG Group said.

"We aim to build a material long-term business in Brazil, and BG Group looks forward to continued cooperation with the Brazilian government within the new regulatory framework," the company added.

-By Jeff Fick, Dow Jones Newswires; 55-21-2586-6085; jeff.fick@dowjones.com

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