CNOOC completes acquisition of additional stake in Tangguh

Chinese oil, gas firm CNOOC Limited announced on Wednesday that its wholly-owned subsidiary, CNOOC Muturi Limited, has completed its acquisition of an additional 20.767 percent interest in the Muturi Production Sharing Contract (PSC) from BG Group for a total consideration of US$105.1 million.

The transaction was previously announced on February 2, 2004.

"This further investment in a world-class LNG project is another milestone in executing our natural gas strategy," said Fu Chengyu, Chairman and Chief Executive Officer of the Company. "We remain bullish on the future prospects of the Tangguh Project, and believe that our enlarged position in the project will provide attractive returns for CNOOC Limited."

Following the completion of this acquisition, CNOOC Limited will have a 64.767 percent interest in the Muturi PSC and a 42.4 percent interest in the Wiriagar PSC, equivalent in total to a 16.96 percent interest in the Tangguh LNG project, based on independently certified proved reserves. As per independent reserves assessment carried out by consultants DeGolyer and MacNaughton in August 1998, proved (1P) gas reserves in the Wiriagar, Berau and Muturi PSCs were certified at 14.4tcf and proved and probable (2P) gas reserves were certified at 18.3 tcf.

In September 2002, the Tangguh partners announced the sale of 2.6 mtpa of LNG under a 25-year contract to the proposed Fujian importation terminal in China. In August 2003, Tangguh signed Heads of Agreements with SK and POSCO for the sale of up to 1.35mtpa of LNG into Korea. The marketing of the remainder of Tangguh's capacity continues and first production is scheduled to begin in 2007.

The Tangguh LNG project, which is operated by Anglo-American energy giant BP Plc, is located in the eastern province of Papua. (alex)