BG Exploration & Production today announced the successful test of the first exploration gas discovery well drilled in the North Sinai offshore area concession in the Mediterranean Sea, offshore Egypt.

The discovery follows BG's announcement in April of its gas find in the Rosetta Concession, also in the Mediterranean Sea offshore Egypt.

The North Sinai discovery well Je80-1 tested in excess of 25 million standard cubic feet of gas per day (mmscfd), from only a small portion of pay section. The natural gas was of a very high quality with less than one-half of one percent (0.5%) impurities.

Located offshore in the Eastern Mediterranean Basin in 14 metres of water approximately 90 kilometres east of Port Said, the well encountered in excess of 188 feet (60 metres) of net gas pay in sandstones located above 5,000 feet (1,591 metres). This is BG's second exploratory well in the Concession area and the first discovery.

Commented Frank Chapman, Managing Director, BG Exploration & Production: "This discovery is the product of an extensive exploration programme in the North Sinai area, and is the latest in a series of BG exploration successes this year. The discovery is significant in that it represents the easternmost extension of the new natural gas play in the Nile Delta, and opens up new opportunities for possible export of Egyptian gas. The newly acquired 3D seismic data base indicates additional potential in the area."

The North Sinai Concession exploration group consists of BG Exploration & Production as operator with a 50% interest, together with Amoco Egypt, who hold the remaining 50% interest.

The North Sinai Concession area covers approximately 6,500 square kilometres.

Notes to Editors

BG plc's E&P operations in Egypt are managed through its subsidiary BG Egypt SA. It has interests in three development leases and four 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 SA has a 50% shareholding, Raml, located in the Western Desert, and operated by Rampetco in which BG has a 30% shareholding, and EGB/Sabil located to the south of Zaafarana Field, and operated by Sozafco in which BG Egypt has a 50% shareholding. Current production from these development leases is more than 16,000 barrels of oil per day.

In addition to North Sinai, the exploration concessions are:

Rosetta, covering 3,730 square kilometres in the Nile Delta Basin northeast of Alexandria where BG Exploration and Production is the operator with a 40% interest with partners Shell and Edison International holding 40% and 20%, respectively.

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

North Red Sea Block 1, covering 12,500 square kilometres, where BG Exploration and Production is the operator with a 44% interest, with partners LASMO and Edison International having interests totalling 36% and 20%, respectively.