BG Holds Contacts With Turkmenistan On Oil, Gas Blocks

LONDON, April 24, 2008 (Dow Jones Newswires)

BG Group PLC (BG.LN) has held contacts with Turkmenistan to enter oil or gas blocks in the newly opened Central Asian nation, a person familiar with the matter said this week.

The U.K. natural gas company is the latest energy company to emerge as a possible investor in Turkmenistan as the country breaks its isolation following the death of reclusive dictator Saparmurat Niyazov.

The person said BG met with members of a Turkmen delegation in London last week. The company is interested in onshore oil contract services and production-sharing agreements of gas offshore offered by the government.

Turkmenistan has the second-largest natural-gas reserves in the Former Soviet Union after Russia. A BG spokesman declined to comment and nobody could be reached at London's Turkmenistan embassy.

Bayrammurad Muradov, head of the state hydrocarbons agency, and oil and gas minister Baymurad Khodjamukhamedov were part of the London delegation.

BG is already the joint-operator of Karachaganak, the largest gas-producing field in neighboring Kazakhstan.

A spokesman for U.K. oil major BP PLC (BP) also confirmed it had expressed interest for acreage in the Central Asian nation.

A person familiar with the matter said it was mostly looking at natural gas offshore acreage.

Turkmenistan has even signaled to the European Union it could tie its gas fields to BP's Azeri Shah Deniz. The route, which would use the South Caucasus Pipeline, could effectively bypass Russia to export gas to Europe.

The person said BP had not been formally notified of such considerations.

LONDON, April 24, 2008 (Dow Jones Newswires)