BG Group Signs Nigerian Production Sharing Contract
BG Group has acquired a 45 percent interest in, and operatorship of, Block 332 offshore Nigeria under a farm-in agreement with Sahara Energy Exploration & Production Limited ('Sahara'). The agreement marks BG's entry into the Nigerian upstream sector and comes as BG, along with its partners, Sahara and Seven Energy Nigeria Limited ('Seven Energy'), yesterday signed a Production Sharing Contract (PSC) for Block 332 with the Nigerian National Petroleum Corporation (NNPC).
Sahara, which will retain a 45 percent interest, secured Block 332 in the 2005 Nigerian Licensing Round held in August. Seven Energy will hold the remaining 10 percent interest.
BG Group Executive Vice President for the Mediterranean Basin and Africa, Stuart Fysh, said: "Nigeria is a prolific hydrocarbon province which fits well with our market focused Atlantic Basin strategy. This attractive farm-in opportunity represents BG's entry into Nigeria's upstream sector and we look forward to working with our partners to play an active role in the continued development of Nigeria's energy sector."
The work program will be carried out in two phases, the first involving the acquisition of 3D seismic and one exploration well.
Block 332 is located in deep water (100 - 1,000m) offshore western Niger Delta, approximately 100km south-east of the commercial capital Lagos and lies between latitudes 5 degrees 50'N and 6 degrees 20'N.
BG Group currently has a Memorandum of Understanding with Chevron, Shell and NNPC to examine the feasibility of jointly developing an LNG facility near Olokola in Nigeria's western states of Ondo and Ogun. Block 332 is located approximately 50 kilometers southwest of the Olokola LNG site.
In October 2003, BG LNG Services signed a Sales and Purchase Agreement with Nigeria LNG to acquire 2.5 million tons per annum for 20 years for shipment to the Lake Charles import terminal in Louisiana. The first LNG shipment from Nigeria LNG to Lake Charles departed in January 2006.
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