Two exploration wells, drilled offshore northern Trinidad by BG plc, on behalf of co-venturers Agip of Italy and Deminex of Germany, have both found gas.

The wells, Hibiscus-2a and Hibiscus-3, both encountered gas-bearing reservoirs in their primary objectives. Tests conducted on the Hibiscus-3 well confirmed excellent reservoir productivity.

The wells, drilled nine kilometres apart, complete the exploration programme on the North Coast Marine Area 1 licence, 40 kilometres offshore.

The discovery extends the proven Hibiscus gas field - identified by Petrotrin's Hibiscus-1 well in the neighbouring Block 9 in 1981 - by more than 15 kilometres into the BG/Agip/Deminex licensed acreage.

Frank Chapman, Managing Director of BG plc's Exploration and Production division, said: "This discovery firmly positions the consortium to be a major supplier to the further expansion of the Atlantic LNG project in southern Trinidad. It comes just as BG plc is evaluating expansion options with its partners in Atlantic LNG and the Government of Trinidad & Tobago.

"The development of this discovery also reinforces BG's commitment to play an integrated role in the country's energy sector."

Simon Bonini, General Manager of BG plc in Trinidad & Tobago, added: "The consortium is proud of this achievement, not only in terms of the gas discovery, but also because of the joint efforts of the UK and Trinidad teams in completing the work programme within four months of the signing of the production sharing contract - a record for all recently-signed PSCs in Trinidad & Tobago."

The wells - the first to be sunk in the area for more than 16 years - were drilled by the Explorer III drillship, owned by Canadian Marine Drilling Ltd.

Note to editors

On March 26 1997, British Gas International, Trinidad & Tobago, Agip Trinidad & Tobago Ltd., and Deminex Trinidad Petroleum GmbH signed a production sharing contract with the Government of Trinidad & Tobago which opened up the North Coast Marine Area 1 (NCMA1), formerly known as DAB West and DAB East, as a hydrocarbon province.

The NCMA1 covers 230,000 acres and contains the undeveloped Hibiscus, Chaconia, Poinsettia, Orchid and Iris gas fields, which have potential reserves of more than three trillion cubic feet of gas.

The PSC has a six-year exploration period, beginning on signing, and an option to move into a development phase for the following 25 years.

The primary target market for North Coast gas is the expansion of the Atlantic LNG Company's plant at Point Fortin, Trinidad. In July, Atlantic - in which BG plc is a 26 per cent shareholder - concluded a US$600 million credit facility for the plant which is currently under construction. First exports of gas to the United States and Spain are on schedule for the second quarter of 1999.

BG plc is already a major supplier of gas to Trinidad & Tobago. It is the operator, and 50 per cent partner with Texaco, of the offshore Dolphin field, currently supplying more than 160 mmcfd to the National Gas Company under a 20 year supply agreement. The field came on stream last year.