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Royal Dutch Shell Plc. com: BG signs two deals with CNOOC


07-06-06 BG Group said it signed two production sharing contracts with China National Offshore Oil Corp. (CNOOC), for exploration blocks offshore China. The deals signal the entry of the UK company, which production is mainly in natural gas, into the world’s fastest growing energy market.

Under the terms of the PSCs, BG will be the operator and will retain 100 % in the blocks during the exploration phase. In the event of a commercial discovery CNOOC has an option to take an interest of up to 51 % in the field. The agreements are subject to final government approval.

The three blocks cover a total area of about 25,800 sq km and are located in the South China Sea.

BG Chief Executive Frank Chapman said: “These largely unexplored blocks are well placed with respect to the robust and high growth gas markets of Southern China. The signing of these agreements represents BG’s first investment in China.”

BG isn’t the first international oil and gas company to be awarded a contract to explore or extracthydrocarbons for the promising Chinese market. In March, PetroChina and Total signed a contract for joint exploration and production of natural gas in north-western China’s south Sulige block.

Last year, PetroChina also signed an agreement with Royal Dutch Shell to jointly explore the Changbei natural gas field, also in northwest China.

BG has been steadily expanding its regional reach in recent months as it surfs on higher demand for natural gas and liquefied natural gas.

It has announced its entry into Nigeria and Libya and said in April it signed a production-sharing agreement with the Omani government covering a natural gas block.

Source: Dow Jones Newswires

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