BG & Partners Reach Agreement on Indian Offshore Fields

BG Group reports that an integrated joint operating framework has been agreed with partners ONGC and Reliance Industries Limited to oversee the operations of the Panna/Mukta oil and gas fields and the Tapti gas field, offshore the west coast of India.

The proposed framework, which is subject to Government approval, will involve conducting all operations through a three-member Operator Board. The Operator Board will comprise representatives from each company and will draw upon the respective partners' strengths. Chairmanship of the Board will rotate on a two-yearly basis.

Nigel Shaw, Vice President, BG India, said: "We look forward to working closely with our joint venture partners to continue the successful operation of these producing fields. The fields and their expansion prospects underpin our commitment to India and form an important element of our strategy in the country."

The partners look forward to progressing further development and expansion of the fields and expect to invest approximately US$700 million over the next few years. A priority will be to maintain field production and expand output from the Tapti gas field. The partners will seek Government approval for this additional development work in due course.

On February 14, 2002, BG completed the purchase of the entire share capital of Enron Oil and Gas India Limited (EOGIL) for US$350 million from Enron Corp. These assets included 30 percent interests in the Panna/Mukta oil and gas fields and the Tapti gas field. ONGC has a 40 percent share and RIL has the remaining 30 percent.

About 200 employees work in the offshore fields and at offices in Mumbai, New Delhi and at a supply base in Bhavnagar, which supports exploration, development and production activities for the fields.

India is one of BG Group's core geographical areas and a long-term prospect for the Company. BG is one of the country's largest foreign investors in the oil and gas sector. It has invested some US$500 million and expects to double this figure over the next few years. BG has major shareholdings in two gas distribution companies - Gujarat Gas Company Limited (BG 65 percent) in Gujarat and Mahanagar Gas Limited (BG 49.75 percent) in Mumbai. The Group is also promoting the development of a proposed natural gas importation terminal at Pipavav, on the west coast of the country.