BG PLC - Re Subsid's Agrmnt with ARCO
October 30 1997 - 2:30AM
UK Regulatory
RNS No 8282m
BG PLC
30th October 1997
BG plc and ARCO ANNOUNCE AGREEMENT TO COLLABORATE ON
INDONESIAN LNG PROJECT; ANOTHER SUCCESSFUL GAS WELL DRILLED
Subsidiaries of BG plc and ARCO today announced an agreement
to collaborate in the supply of gas to the proposed Tangguh
liquefied natural gas (LNG) project in Irian Jaya, eastern
Indonesia, using reserves from the Wiriagar, Berau and Muturi
production sharing contracts (PSCs).
Operational responsibility for the fields within the three
blocks feeding the previously-announced Tangguh project will
belong to ARCO, which has been designated the PSC
representative to state oil company Pertamina.
Frank Chapman, BG plc Executive Director for Exploration and
Production, said: "I am delighted with the conclusion of the
collaboration agreement with ARCO. This will enable the
government of Indonesia and all the partners involved to
benefit from an optimal development of the reserves in all
three licences".
Last month, ARCO announced proved and probable reserves in
excess of 13 trillion cubic feet of natural gas in support of
the Tangguh project, a name meaning 'reliability and strength'
given by Indonesia's President Suharto.
Today, Atlantic Richfield Berau Inc. and BG Exploration and
Production Ltd. announced the results of another successful
well drilled by ARCO.
The well, Vorwata-4, drilled under the terms of the
collaboration agreement, is located on the leaseline between
the ARCO-operated Berau block and the BG-operated Muturi
block. The well flowed gas at a tubing-limited rate of 36
million standard cubic feet per day from Jurassic age
sandstone formations.
Leon Codron, President of Atlantic Richfield Indonesia Inc.,
said: "We are very pleased with the productivity and quality
of the gas in Vorwata-4. The results indicate that the Vorwata
reservoir discovered by ARCO and its co-venturers this year
extends northward into the Muturi PSC, providing the area with
additional reserve potential beyond earlier estimates and
further supporting a multi-train Tangguh LNG project."
To further prove the extension of the Vorwata reservoir into
the Muturi block, BG and its partners - Cairns Limited, a
wholly-owned subsidiary of Genting Berhad, and PT Saptapetra
Wisesa - plan a continuous campaign of drilling in Muturi
through to mid-1998. BG said that some of the wells will be
testing the limits of the geological structure.
BG said that gas shows were encountered in several prospective
horizons while drilling the Nambumbi-1 well, located four
kilometres northwest of the Vorwata-1 discovery well and
designed to test for reserves at the northern limit of the
Vorwata field.
Mechanical difficulties prevented a comprehensive test of the
well and it has now been suspended. Drilling continues in the
Muturi block at Sakauni-1 which began on October 4 and is
located 11 kilometres north-east of Vorwata-4.
Notes
Partners in the Berau block are ARCO (48 per cent); Occidental
Berau of Indonesia, Inc (22.856 per cent); Nippon Oil
Exploration (Berau) Ltd. (17.144 per cent); and KG Berau
Petroleum Ltd. (12 per cent). Partners in the Wiriagar block
are ARCO (80 per cent), and KG Wiriagar Petroleum Ltd (20 per
cent). ARCO is operator of both blocks through its Atlantic
Richfield Berau Inc. and Atlantic Richfield Wiriagar Inc.
subsidiaries.
BG Exploration and Production operates the Muturi concession,
which covers 4,652 square kilometres of the Kepala Burung
region of Irian Jaya. The first well, Mogoi Deep-1, drilled
onshore in the northwest of the concession in 1996 recorded
cumulative gas flows of 40 million cubic feet per day.
Partners in the Muturi concession are: BG (50 per cent);
Cairns Ltd, a wholly owned subsidiary of Genting Berhad (45
per cent); and PT Saptapetra Wisesa (five per cent).
For more information:
BG plc
Media enquiries:
Peter Crumpler Tel: 0118 929 3186
Investor Relations enquiries:
Gary Rawlinson Tel: 0118 929 3021
ARCO
Albert Greenstein Tel: 001 213 486 3384
END
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