BG Group has confirmed that it has made a new oil discovery off the coast of Brazil.

In a statement released by the UK-based oil and gas producer, it was explained that the new find is located at its Iara well, in the pre-salt Santos Basin, currently one of the most promising regions of the burgeoning South American sector.

The firm added that it is to carry out further drilling at the site in order to gauge its production potential.

"We are delighted to report another material discovery with Iara," noted BG chief executive Frank Chapman.

"The exceptional sequence and scale of our drilling success in this area reflects the world class status of the pre-salt Santos Basin."

This latest discovery represents BG Group's sixth find in the Santos Basin since it began its programme of drilling in 2005 alongside several partners, with the firm currently holding a 25 per cent interest in the area, while Brazilian state-owned operator holds a 65 per cent interest.

News of the discovery comes as BG Group is still expected to launch a bid for Origin Energy in September.

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