Afren Enters Co-Op Agreement with E.ON and African Ltd

Afren plc has entered into a co-operation agreement with E.ON Ruhrgas AG and African LNG Holdings Limited.

The Board of Afren has signed a cooperation agreement with E.ON Ruhrgas AG and African LNG Holdings Limited to investigate the availability and accessibility of gas in Nigeria, with a focus on the Anambra Basin and South Eastern regions. The parties have the intention to jointly develop, collect and monetize the gas for domestic and export purposes in line with the Nigerian Government's Gas Master Plan.

The Agreement includes an analysis of potential feedgas, based on an identified target list of upstream gas rich assets and a study of gas gathering infrastructure and potential LNG export solutions. The parties will subsequently decide on jointly establishing corporate structures and funding arrangements.

Osman Shahenshah, Chief Executive of Afren, commented, "We are delighted to have signed a cooperation agreement with E.ON Ruhrgas and African LNG. We are honoured to be working with E.ON Ruhrgas, a pre-eminent gas company. Afren remains at the forefront in contributing to the Government's ambitions to develop Nigeria into a major gas producer and assist with the reduction of gas flaring in the region. The cooperation agreement with E.ON Ruhrgas and African LNG to develop upstream gas allows Afren to capitalise on the anticipated growth in global LNG demand, without diluting our upstream focused strategy."

The Gulf of Guinea has over 200 trillion cubic feet of gas reserves, with more than 80% of those reserves situated in Nigeria. Afren is currently in negotiations on a number of gas rich upstream assets in Nigeria. African LNG will be Afren's exclusive downstream liquefaction partner, in developing a monetization strategy. The Nigerian Government's 2008 Gas Master Plan focuses on diversifying gas usage between domestic and export purposes. Exploration, aggregation and reduction of flaring are integral to the Gas Master Plan. Against this background, any future joint efforts by the Parties of the Agreement will work towards a multi faceted gas solution including an LNG export facility.

LNG will be a key source of new supply to meet increasing global gas demand. Combined with depletion of indigenous supplies from US and Europe and lack of flexibility of piped alternatives, LNG is emerging as a swing supplier in an increasingly global market.