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BG Group entered China in 2006 and owns interests in three blocks.

E&P

BG Group is the operator of deepwater Blocks 64/11 and 53/16, and shallow water Block 63/16 in the Qiongdongnan Basin. All three PSCs have a seven-year exploration and appraisal period and a 20-year production sharing period after entering development. BG Group carries 100% interests in all three blocks during the exploration and appraisal phase, and China National Offshore Oil Corporation (CNOOC) has the right to take up to 51% interest in any field development. The three blocks, which cover 18 840 square kilometres, are relatively unexplored and, should commercial discoveries be made, are well placed to supply the potential high growth markets of southern China.

In December 2010, BG Group announced a discovery on Block 64/11 offshore China after the Lingshui 22-1-1 exploration well encountered gas-bearing sands. The well, the first drilled by BG Group in China, is approximately 130 kilometres offshore and in a water depth of 1 338 metres. BG Group is continuing its exploration programme with further 3D seismic acquisition in Block 64/11, planned for later in 2011, and Block 63/16, planned in 2012.

In 2010, BG Group signed a sales contract with CNOOC, focused on the QCLNG project in Australia. The contract sets out the basis on which CNOOC will purchase 3.6 mtpa of LNG for a period of 20 years (see Australia operations page for full details).