DISCOVERIES AND EXPLORATION ACREAGE
During 2006, BG Group acquired a 36.75% interest and operatorship of the onshore discovered reserves and exploration acreage in the Hassi Ba Hamou Perimeter, Algeria, in which Sonatrach has a 25% interest. The work programme includes the acquisition of 2D and 3D seismic and the drilling of six wells, including a planned minimum of three exploration wells before the end of the initial exploration phase in September 2008. Acquisition of 2D and 3D seismic began in early 2007, and completed in December 2007. The drilling programme was started in December 2007 with the first appraisal well. A further five exploration and appraisal wells are expected to be drilled in 2008.
In February 2008, BG Group announced an alliance with Queensland Gas Company Limited (QGC), a leading Australian coal seam gas company supplying the Queensland market. BG Group will initially acquire 20% of QGC’s assets in the Surat Basin, south-west Queensland, and acquire a 9.9% stake in QGC. Completion is expected in March 2008. The companies will co-operate on exploration and development of onshore coal seam gas and domestic market opportunities and a LNG export facility.
During 2007, BG Group confirmed the success of the Tupi Sul appraisal well in the BM-S-11 concession in the Santos Basin, offshore Brazil. The well, located approximately 10 kilometres south of the Tupi discovery made in 2006, has confirmed the southern extension of that discovery. BG Group holds a 25% interest in the concession together with operator Petrobras (65%) and Galp Energia (10%). BG Group estimates gross HIIP of 12 to 30 or more billion boe. This may be the largest discovery made globally since Kashagan in 2000.
The Tupi Sul appraisal well is the fourth consecutive success for BG Group in the deep water Santos Basin since the Group began drilling in 2005. Previous successes are Parati (BM-S-10, September 2006), Tupi (BM-S-11, October 2006) and Carioca (BM-S-9, September 2007).
BG Group has been present in offshore Brazil since 2000 and has interests ranging from 20% to 60% in seven concessions in the Santos Basin and one onshore concession in the São Francisco Basin.
In June 2006, BG Group entered China with the signature of two Production Sharing Contracts (PSCs) covering deep water Blocks 64/11 and 53/16 and a Geophysical Survey Agreement for Block 41/06, offshore southern China. The three blocks cover an area of approximately 25 800 square kilometres. The exploration work programmes for the blocks will be carried out in three phases and involve the acquisition of 2D and 3D seismic and the drilling of exploration wells. The Geophysical Survey Agreement involves the acquisition and processing of 2D seismic over a defined area and gives BG Group an option to enter into a PSC for that area upon completion of this work.
A 2D seismic acquisition programme across the three blocks was completed in August 2007. The next phase involves a 3D seismic programme planned to take place in 2008, with drilling expected in 2009/2010.
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BG Group holds the Gaza Marine licence (BG Group 90% and operator) and, in December 2007, withdrew from negotiations with the Government of Israel for the sale of gas from the Gaza Marine field to Israel.
BG Group was awarded three onshore exploration licences in the 2nd Libyan licensing round in October 2005. Two licences are in the Sirt Basin (BG Group 100% and operator) and one licence is in the frontier Kufra Basin (BG Group 50%). Seismic was completed on all licences in September 2007 and drilling of the first well on each licence is planned to start in 2008.
In June 2006, BG Group signed a farm-in agreement to acquire a 30% non-operated interest in the Majunga Offshore Profond exploration block in Madagascar, covering approximately 15 840 square kilometres. Technical evaluation is ongoing, utilising 2D and 3D seismic data.
BG Group is developing an E&P and LNG position in Nigeria, one of the most prolific hydrocarbon provinces in the Atlantic Basin. In January 2006, BG Group signed a PSC for Oil Prospecting Licence (OPL) 332 with the Nigerian National Petroleum Corporation (NNPC), which resulted in BG Group acquiring a 45% participating interest and operatorship of the deep water block located in up to 1 000 metres of water. The first phase of the two-part work programme on OPL 332 began in 2006. 3D seismic acquisition completed in January 2007 and data processing was completed in January 2008, with an exploration well expected to be drilled in 2008/2009.
In March 2007, BG Group signed a PSC with NNPC for OPL 286-DO (BG Group 66% and operator), which was awarded in the May 2006 licensing round. The block is located in deep water (up to 1 000 metres) and contains an existing discovery, Boi. BG Group, as operator, is undertaking the first phase of the two-part work programme with the initial assessment of 3D seismic in 2007. Exploration and appraisal drilling is expected to commence in 2008 and continue into 2009.
BG Group currently has 22 exploration licences (14 as operator) offshore Norway, gained through licensing rounds and acquisitions. BG Group gained two licences (awarded in January 2007) in the 2006 Awards in Pre-defined Areas licensing round, including one in the southern North Sea (BG Group 40% and operator) that contains the Bream discovery.
BG Group’s Norwegian acreage lies in four core areas, including the southern North Sea, where acreage is adjacent to the UK/Norway median line and close to the Group’s central North Sea core production area and offshore infrastructure. The three other core areas are North Tampen, Mid-Norway and the Barents Sea.
In 2007, BG Group started its exploration drilling programme and drilled and completed three wells, with the Nucula well in the Barents Sea declared a technical discovery. In 2008, BG Group expects to drill and complete four wells in Norway.
In April 2006, BG Group signed an Exploration and Production Sharing Agreement with the Government of the Sultanate of Oman for a 100% interest in and operatorship of Block 60, onshore Oman. Block 60 contains the Abu Butabul gas and condensate discovery, as well as other exploration prospects, and covers almost 1 500 square kilometres. BG Group commenced the acquisition of seismic in 2007 and began drilling in December 2007. Drilling is planned to continue into 2008 and 2009, with at least eight appraisal wells planned.