BG Exploration & Production today announced the successful test of the first exploration well in the Rosetta Concession area of the Mediterranean Sea, offshore Egypt.

The well Ji 57-1 tested in excess of 60 million standard cubic feet of gas per day (mmscfd) in aggregate from three tested zones. The natural gas was of a very high quality with less than one half of one per cent impurities.

Located offshore in the Mediterranean Sea in 61 metres of water 48 kilometres northeast of Alexandria, the well encountered in excess of 460 feet (140 metres) of net gas pay in sandstones located above 6000 feet (1830 metres).

Commenting on the discovery, Frank Chapman, Managing Director, BG Exploration & Production, said: "The discovery is an excellent result from the intense and detailed exploration effort which began with the planning of a 1500 square kilometre 3-D seismic survey almost two years ago.

"Natural gas in producible quantities was encountered precisely where we hoped to find it, based on our seismic work. The extensive 3-D seismic survey shows several similar exploration prospects yet to be drilled."

The Rosetta Concession exploration group consists of BG Exploration & Production as operator with a 40 per cent interest while Shell Egypt holds 20.4 per cent, Shell Austria holds 19.6 per cent and Edison International holds 20 per cent.

The Rosetta Concession area covers approximately 3730 square kilometres and under the agreement terms, a minimum of at least three additional exploration wells will be drilled in the next two years. Preparations are already underway to prepare for the drilling of the next exploration well this summer.

Notes to Editors

BG plc's E&P operations in Egypt are managed through its subsidiary BG Egypt S.A. It has interests in two development leases and five exploration concessions.

The development leases are:

Zaafarana, located in the north central Gulf of Suez, and operated by the Zaafarana Oil Company (ZAFCO), in which BG Egypt S.A. has a 25 per cent shareholding. Current production is 15 500 barrels of oil per day.

EGB/Sabil, to the south of the Zaafarana Field, which is operated by the South Zaafarana Oil Company (SZAFCO), a joint operating company owned by the Egyptian General Petroleum Company (EGPC) and BG Egypt S.A.

In addition to Rosetta, the exploration concessions are:

North Sinai, covering approximately 6,500 sq kms in the Eastern Mediterranean Basin, east of Port Said, where BG Exploration and Production is the operator and has a 50 per cent interest with its partner Amoco.

West Delta Deep Marine, covering 8,500 sq kms in the Nile Delta Basin, north east of Alexandria, where BG Exploration & Production is the operator and has a 50 per cent interest with its partner Edison International.

West Abu Gharadiq, covering 19,200 sq kms onshore in the Qattara depression, 400 km west of Cairo, where the operator is IEOC and BG Exploration & Production has a 30 per cent interest. The Raml oil field began production in 1996, and current production is 2100 barrels of oil per day.

North Red Sea Block 1, covering 12,500 sq kms, where BG Exploration & Production is the operator with a 44 per cent interest, and LASMO and Edison International have interests of 36 per cent and 20 per cent respectively.