BG Group Signs MOU with Bank of China for $1.5B Funding

- BG Group Signs MOU with Bank of China for $1.5B Funding

Monday, June 27, 2011
BG Group plc

BG Group and Bank of China have signed a key cooperation agreement that enhances the existing close working relationship between the organizations and also allows for up to $1.5 billion of new funding options to support the Group's major growth program.

The Memorandum of Understanding (MOU) signed today builds upon existing commercial relationships between BG Group and Bank of China and confirms the intention to make extended credit facilities available that can be used to help deliver the Group's global growth plans - including its operations in China where the Group has an established commercial presence and where an initial offshore exploration program is underway.

The MOU also identifies other areas of potential cooperation including investment banking services, derivatives products, bank deposits, insurance and international settlement and trade finance facilities. Separately, BG Group already has a US$200m lending facility in place with Bank of China which is just one of a series of committed lending facilities that the company has with a group of international banks. These lending facilities in aggregate have been recently increased and extended and now total US$4.4 billion.

On signing the MOU with the Chairman of the Bank of China Gang Xiao, BG Group Chief Executive Sir Frank Chapman said, "This is a significant agreement for BG Group. It affirms and enhances our existing excellent relationship with the Bank of China. BG Group has a well established presence in China as a result of our LNG sales into this valuable and rapidly growing market, through a long-term sales and equity agreement with CNOOC in our QCLNG project in Australia, and with an extensive exploration program offshore China that has already produced a discovery.

"This agreement builds on our existing facilities with Bank of China and provides the option for substantial additional funding for our commitments in China and also our global growth program."

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Change in Oil Funding Priorities Concerns Western Legislators

Change in Oil Funding Priorities Concerns Western Legislators

Thursday, April 28, 2011
The Bismarck Tribune, Bismarck, North Dakota
by Rebecca Beitsch, The Bismarck Tribune, N.D.

Lawmakers have passed a bill that changes the way oil money will be allocated amid cries from some western legislators that it will short the oil producing counties.

House Bill 1451, which now goes to the governor for signature, eliminates the Permanent Oil Trust Fund, where most oil revenue goes now, and disperses it into other funds --mainly the state's general fund -- while all setting the stage for locking more of it away in the Legacy Fund down the road.

Some legislators' problem with the Permanent Oil Trust Fund was one of semantics -- they complained there was nothing permanent about it and the fund should be dissolved and dispersed into more project-specific funds.

The bill does just that, putting more money from oil revenue into the general fund to cover projects that would've likely been funded by oil money anyway. The rest of the money funnels into funds, hitting an upper limit before moving into the next one like a line of dominoes.

After the first $200 million goes into the general fund, the next $341 million would fund property tax relief. Then comes more money into the general fund, allotments into the newly-created Strategic Investment and Improvements Fund, then into disaster relief, and then back to the Strategic Investment and Improvements Fund before 25 percent of whatever is left over goes into the Legacy Fund. Created by voter referendum in 2010, the Legacy Fund locks some of the oil revenue away, untouchable by the Legislature until 2017.

As the bill came to a final vote Tuesday in the Senate, some expressed concern about putting even more money in the Legacy Fund, though money is not projected to reach that fund this biennium.

Sen. John Andrist, R-Crosby, said investing in infrastructure, particularly in the western part of the state, should be a No. 1 priority.

"I'm afraid we're going to get short changed because we'll be trying to save money rather than invest it in infrastructure in the oil producing counties that supplied those funds," Andrist said, adding that the infrastructure money from this session had been scattered through the state rather than targeted at the west.

Other discussion surrounded eliminating the Permanent Oil Trust Fund.

Sen. Dwight Cook, R-Mandan, said centralizing spending from one source would be more transparent. Others argued the opposite, saying it made it unclear to what extent oil was funding state projects.

"I think it's always good to know when the state is spending oil money," said Sen. Jim Dotzenrod, D-Wyndmere.

Sen. John Warner, R-Ryder, said much of the state's spending is due to oil, but he's concerned transferring more to the general fund will tempt legislators to spend.

"We can only put so much in the general fund or we'll overspend," Warner said.

Northern Signs Agreement with Azimuth for Southern Adriatic Permits

Northern Signs Agreement with Azimuth for Southern Adriatic Permits

Friday, March 25, 2011
Northern Petroleum plc

Northern has signed an agreement involving Italian permits F.R39.NP and F.R40.NP which contain the Rovesti and Giove oil discoveries and ten mapped prospects. The objective of the agreement is to work with Azimuth Limited ("Azimuth") a specialist global E&P business, to define and delineate suitable appraisal and exploration drilling targets. Azimuth will become a 15% interest partner in both permits by funding a promoted share of future work programs prior to the drilling phase.

The future assignment of permit interests to Azimuth, and implementation of aspects of the agreement, are subject to receiving approvals from the Italian authorities.

The Giove and Rovesti oil fields have been independently assessed by Blackwatch Petroleum Services ("Blackwatch") to have 53.2 million barrels of probable oil reserves. In addition, as a result of work undertaken, Northern recognizes the potential both for oil prospects with a mean of over 3 billion barrels of oil in place and gas prospects with a mean of over 2 Tcf of gas in place, which is over 1 billion barrels oil equivalent of prospective resource in the two permits, split approximately equally between oil and gas prospects.

Matt Haartsen, commenting on behalf of Azimuth, said, "Azimuth is excited by the opportunity to work with Northern Petroleum and looks forward to unlocking commercial reserves across the permits."
Derek Musgrove, Managing Director of Northern Petroleum, commented, "This deal brings additional resources and skills to assist Northern to progress the future development of reserves and drilling of exploration prospects in the permits in one of our key areas in the Italian offshore.
"The Rovesti field was discovered in 1978 by Eni and the nearby Giove field was discovered in 1998 by Enterprise Oil Plc. Blackwatch have assigned P2 oil reserves of 33.6 million barrels to Rovesti and 19.6 million barrels to Giove and support the view that there is high potential within the two permits. We have surmised that the decisions by previous companies not to move these two discoveries towards development could be attributed to the depth of water of Rovesti in the context of the then prevailing oil industry capabilities and costs, and that Giove was found to be smaller than originally mapped and at the time low oil prices prevailed."