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UK company aims for acreage in jointly held area and off Nigeria
BG shifts up gear on Africa targets
By Upstream staff
The UK's BG Group is targeting acreage in the joint development zone managed by Nigeria and Sao Tome, along with other blocks in the Nigerian Exclusive Economic Zone.
BG Nigeria project manager John Field would not be drawn on the move but simply acknowledged the company is "interested in all opportunities in the subregion".
JDZ blocks 5 and 6 will not be offered in a subsequent round but will signed up hopefully before the end of May, according to Lagos-based Joint Development Authority officials.
Signature bonuses for the two blocks will reach $37 million and $45 million respectively and the production sharing contracts will be signed before the end of May, officials claimed. BG is targeting Block 5, in which 75% equity was provisionally awarded to private Iranian consortium ICC-OEOC.
Houston-based ERHC Energy has the right to 15% of the block but must pay the full share of the signature bonus on it and on Block 6. That differs from other blocks where ERHC secured a bonus waiver alongside preferential rights negotiated under the bilateral accord which established the JDZ in 2002.
BG would have to acquire a 51% majority stake to secure Block 5 operatorship. Additional data will be required for the block, probably 3D seismic, in addition to the 2D seismic coverage undertaken by WesternGeco several years ago.
As part of its Nigerian expansion plans, BG has already signed up to participate in the OKLNG scheme in Ondo State along with Chevron, Shell and the Nigerian National Petroleum Corporation .
A project development agreement was signed in February and front-end engineering and design work on the four-train 22 million-tonnes-per-annum project is getting started.
The company has also signed a memorandum of understanding to buy gas from the proposed Brass LNG project, although its principal focus for securing upstream positions remains in the western delta.
Offshore, BG hopes to move swiftly on its freshly acquired OPL-332 plot in which it holds an operating stake of 45%.
Existing 2D seismic for the block has identified some leads but an additional 3D seismic shoot is planned for the fourth quarter.
BG is looking at the market for seismic acquisition and will probably go out to tender as soon as its in-house programme to re-interpret existing 2D is completed. There is one commitment well in the first exploration period.
OPL-332 has been described as "a strategic foothold" in Nigeria.
12 April 2006 23:02 GMT | last updated: 13 April 2006 08:50 GMT