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Press Release 12 September 1997

BG plc Sells Interest in Tunisian British Services, Kerkennah West Permit And Four Concessions


British Gas Tunisia Limited (BGTL), a wholly owned subsidiary of BG plc, has sold its shareholding in Tunisian British Services (TBS), and its interests in the Kerkennah West permit and four associated concessions to Preussag Energie GmbH of Germany.

The sale, which is subject to Tunisian government approval, does not affect BGTL's 100 per cent interest in the offshore Miskar gas field, which supplies up to 80 per cent of the country's gas.

Frank Chapman, Managing Director of BG plc's Exploration & Production division, explained: "This sale forms part of BG plc's portfolio rationalisation programme and will enable both BG plc and Preussag to focus energy on their specific interests in Tunisia.

"We remain committed to our Tunisian interests in the Amilcar and Ulysse areas, and will continue to play an important role in the country's energy industry."

Preussag Energie, the largest oil producer in Germany with strong international activities in the Mediterranean region, South America, Central and South East Asia and the Middle East, has been active in Tunisia since 1994. The company currently operates the Djebel Oust and Maatoug exploration permits and is a partner in the El Jem permit.

The sale involves BGTL's 50 per cent shareholding in Tunisian British Services, its 34.3 per cent interest in the Kerkennah West exploration permit, and its 49 per cent interest in four associated oil production concessions. These four concessions include the offshore Cercina field, and four smaller onshore fields. The remaining 50 per cent in TBS and 51 per cent in the concessions is held by the Tunisian state oil company, Entreprise Tunisienne d'Activités Pétrolières (ETAP). BGTL's net oil production from the fields averages 2,500 barrels per day.

The Kerkennah West permit covers 1,516 sq kms onshore and offshore Sfax. Preussag Energie formerly held a 14.7 per cent interest; ETAP holds the remaining 51 per cent interest.

Notes to editors

BG plc in Tunisia

BG plc, which has been active in Tunisia since 1988, has offices in Sfax and Miskar is Tunisia's largest gas field development and produces 80 per cent of its gas demand. The field is located 125 kilometres offshore, within the Amilcar Permit in the Gulf of Gabes. Gas from the field is processed at the Hannibal plant, located 32 km south of the industrial city of Sfax. Regular gas production began in June 1996.

British Gas Tunisia Limited is operator of the field and holds a 100 per cent interest in the Miskar Production Concession. The company has a sales contract with Société Tunisienne de l'électricité et du Gaz (STEG), the Tunisian state electricity and gas distribution company. STEG will purchase up to 4.5 million cubic metres per day (mcmd) of gas for the first five years of production and up to 5.7 mcmd thereafter.

The Miskar production concession covers an area of 352 sq km and lies under 62 metres of water. It is estimated that the Miskar field will produce more than 20 billion cubic metres of sales gas during its lifetime.

Amilcar Permit

The Amilcar permit is operated by BGTL and is held jointly with the Tunisian state owned oil company ETAP (Entreprise Tunisienne d'Activités Pétrolières). The permit covers 1584 sq km offshore in the Gulf of Gabes and contains the Miskar gas field.

A successful exploration well, Hasdrubal-2, was drilled in the Amilcar permit in 1994, and a second successful appraisal well, Hasdrubal-3 earlier this year. Development options for the gas are currently being considered.

The Ulysse Permit

The Ulysse permit, awarded in March 1997, covers 1912 sq km in the Gulf of Gabes. BGTL and ETAP each have a 50 per cent interest in the permit, which covers an initial four year exploration period. The first exploration phase, during which ETAP's share of costs is being carried by BGTL, includes a 3D seismic survey and one exploration well.

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