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BG Alaska E&P Enters Second North Slope Deal with Anadarko

May 22, 2006
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Taking additional steps to develop North Slope Alaska natural gas, BG Group's BG Alaska E&P Inc. has signed an exploration agreement with Anadarko Petroleum Corp. to acquire a 40% equity share in 208,000 acres of land along Alaska's Eastern North Slope (ENS). With the majority 60% interest, Anadarko will serve as operator for the joint venture.

BG Alaska said the ENS acreage is located on the coastal plain near the Prudhoe Bay field, which has already produced over 10 billion barrels of oil. The agreement became effective on April 17 and assignments contemplated under the deal are subject to approval of the state of Alaska.

"BG Group is focused on growing its presence in Alaska as part of our long-term plan to meet the increasing U.S. energy demand through the production of new natural gas supplies from Alaska and Canada," said Martin Houston, BG executive vice president and managing director for North America, Caribbean and Global LNG. "This agreement with Anadarko is an ideal partnership between two companies with the knowledge, technology and experience to be successful and fits nicely into our strategy of being a long-term reliable supplier of clean burning natural gas to the world's largest gas market."

BG Alaska's ENS agreement with Anadarko is the second time this year the companies have paired up in the North Slope. Looking to add some U.S. natural gas production to UK-based BG Group's portfolio, BG Alaska entered the Foothills area of Alaska's North Slope in February through a participation agreement with Anadarko and Petro-Canada (Alaska) Inc. (see NGI, Feb. 13). BG Alaska took a one-third equity share of 2.1 million acres; Anadarko is the operator.

In Canada, BG Group's BG Canada subsidiary started its first Canadian drilling program in May 2004 and continued through the winter drilling season into March 2006. BG Canada has drilled 24 exploration wells to date, with a gas discovery rate in the range of 60-70%. BG Canada said that following a successful bid for acreage in the Northwest Territories in May 2005, BG holds approximately 875,000 net acres, of which 811,000 is undeveloped oil and gas acreage. The new blocks, EL 429/432 (net 275,490 acres) are located in the central Mackenzie Valley area of the Northwest Territories. Current gas production is sold into the grid for the Canadian and U.S. markets.

In addition to the U.S. and Canada, BG Group -- through its various subsidiaries -- is involved in exploration and production activities in Trinidad, Bolivia, the United Kingdom, Tunisia, Egypt, Kazakhstan, India and Thailand.

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