CNOOC Acquires Stake in Tangguh LNG Project

CNOOC Limited has acquired a 12.5 percent share of Indonesia's Tangguh liquefied natural gas (LNG) project from BP for US$275 million.

This acquisition follows the signing last September of a 25-year agreement between CNOOC Limited and BPMIGAS - implementing agency for the upstream oil and gas sector in Indonesia - under which the BP-operated Tangguh project will supply LNG to China's Fujian LNG terminal. Also signed was an agreement in principle for CNOOC Limited's participation in Tangguh.

BP is pleased to welcome CNOOC Limited as a full partner in Tangguh. CNOOC Limited's addition affords Tangguh greater access to the Chinese LNG market as already evidenced by the Fujian LNG sale and purchase agreement approved in September last year. We look forward to CNOOC Limited's contribution to the partnership as an experienced oil and gas company with which BP has enjoyed a strong relationship in China.

Tangguh is a world-class gas field in Indonesia, with proved reserves certified at 14.4 trillion cubic feet. The Tangguh reserves are located on three Production Sharing Contracts (PSCs). BP retains an interest in all three of the PSCs, on two of which BP is operator. The project is located in the Berau-Bintuni Bay region of Manokwari District in the Indonesian province of Papua.

The shares in proved reserves in the Tangguh project, derived from the three PSCs are: BP 37.2 percent, Mitsubishi 16.3 percent, CNOOC Limited 12.5 percent, Nippon 12.2 percent, BG 10.7 percent, KG (Kanematsu Corp, JNOC and Overseas Petroleum) 10.0 percent, and LNG Japan 1.1 percent.

The Tangguh LNG project represents a comprehensive approach to sustainable resource development that integrates environmental, social and economic considerations into all aspects of the project design and management. The project is expected to accelerate sustainable economic development in the surrounding communities, while at the same time diversifying and expanding the economic base of Papua and Indonesia.

The construction of the Fujian terminal is expected to start in 2004 and the terminal is scheduled to begin operations in 2007.

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