BG Group and its partners Talisman Energy and Paladin Resources today welcomed the DTI's approval of the £60 million Blake Flank development in the UK North Sea. BG is the operator and holds a 44% interest, with Talisman holding 53.6% and Paladin 2.4%.

First oil production from Blake Flank - which is an extension of the original BG-operated Blake Channel field in the same production licence - is scheduled for Q3, 2003. Due to the increased oil production rate of the combined development, the economic life of the Blake field should be extended by an estimated two years. The facilities will comprise two production wells and a single water injector tied into the existing Blake Production Manifold.

Speaking today, BG Group Executive Vice President for the UK Jon Wormley said:

"Blake Flank has taken only one year to progress from the final appraisal well to project sanction, and is a prime example of just-in-time development at its best. In using existing infrastructure to extend the life of the original field, it is also a testament to best contemporary working practice in the North Sea."

Energy Minister Brian Wilson said:

"It is encouraging to see so many North Sea operators looking afresh at their assets, and finding new and economic ways to exploit the UK Continental Shelf. With reserves estimated at over 20 million barrels over ten years, the Blake Flank development will make a welcome addition to existing UK production."
The Blake Flank structure lies 64 miles from Aberdeen in the Outer Moray Firth, directly to the north east of, and immediately adjacent to, the Blake Channel structure, which was brought on stream by the field owners in June 2001. An appraisal well on Blake Flank was spudded on 17 September 2001, and this was followed by the testing of two zones and a sidetracking programme.

The subsea controls contract has been awarded to Kvaerner, and that for subsea Christmas trees to Cameron Cooper. Tenders for the drilling unit and Subsea EPIC contract (Engineering, Procurement, Installation and Construction) are currently being evaluated, and award details are expected to be announced shortly.

Notes to Editors

The original Blake oil field - known as the Blake "Channel" - started production on 27 June 2001, just 18 months after project sanction. It has estimated gross field reserves of around 70 million barrels of oil, and produced an average of 40,000 barrels of oil per day during 2001. BG is operator, holding 44 per cent, with Talisman Energy UK Group holding 53.6% and Paladin Resources holding 2.4 per cent.

BG Group plc, The Integrated Gas Major, works across the spectrum of the gas chain, and is listed on the London and New York Stock Exchanges. Active on five continents in some 20 countries, it operates four business segments - Exploration & Production, LNG, Transmission & Distribution and Power. BG is a significant holder of hydrocarbon reserves on the UK Continental Shelf, where it operates the Blake, Armada and Easington Catchment Area fields. Internationally, the group's operational strategy is to develop gas markets and construct infrastructure in tandem with its exploration interests. BG's core geographical areas are the UK, Egypt, Kazakhstan, South America, India and Trinidad & Tobago.