LISBON (Bloomberg) -- Galp Energia SGPS SA, Portugal’s biggest oil company, and BG Group Plc rose after finding light crude oil in a deepwater offshore well in Brazil’s Santos Basin.

BG, the U.K.’s third-largest oil and natural-gas producer, climbed as much as 3.4 percent to 1,144 pence in London. Galp stock increased as much as 6.2 percent to 13.70 euros in Lisbon, following a 17 percent gain yesterday.
“Given further drilling updates are expected soon, we believe the share price has further upside potential in the short to mid term,” Anish Kapadia, an analyst at UBS AG, said today in a research note about Galp shares. He has a “buy” rating on the stock.
Lisbon-based Galp is seeking to expand exploration in countries including Brazil and Angola to increase access to crude supplies and rely less on refining and selling fuel at home and in neighboring Spain. It owns holdings in four exploration blocks in the Santos Basin, including a stake in Tupi, the largest discovery in the Americas since 1976.
The latest discovery was made at the Iara well, which is in the same BM-S-11 exploration block as Tupi, a field with as much as 8 billion barrels of recoverable oil. Petrobras, the well’s operator, owns 65 percent of the block where the Iara well was drilled. BG owns 25 percent and Galp owns 10 percent.
----------------Recoverable reserves
“Given the discovery, recoverable reserves on block BM-S- 11 could increase to 10 billion barrels from currently 5 billion BP Says South Ossetia Skirmishes Haven’t Disrupted Oil Flows in Georgiato 8 billion barrels,” Kapadia said.
Iara is in Brazil’s “pre-salt” offshore region, a new oil province that may contain about 50 billion barrels of oil according to Peter Wells, a director at U.K. research company Neftex Petroleum Consultants Ltd. The Iara well, which has yet to be declared commercially viable, is still being drilled in the hope of finding more oil at greater depths.
Petrobras in January said that a gas and oil discovery known as Jupiter could be as big as Tupi. Petrobras owns 80 percent of Jupiter and operates the well. Galp has 20 percent of Jupiter.
Eni SpA, Italy’s biggest oil company, and Portuguese holding company Amorim Energia BV, each control a third of Galp.