BG, ARCO in talks over Indonesia gas

BG, ARCO in talks over Indonesia gas

LONDON (Reuter): U.K. gas producer BG Plc said yesterday it
was in talks with U.S. Atlantic Richfield Co on possible
cooperation in the development of huge natural gas finds in
Indonesia.

ARCO on Tuesday announced a massive onshore and offshore
discovery in Indonesia's remote Irian Jaya province, adjacent to
BG Plc's Muturi concession where gas was found last year.

"We are talking to them about possible cooperation," said a
spokesman for BG Plc's BG Exploration and Production.

ARCO said it would spend up to US$3 billion developing the
13.2 trillion cubic feet of proven and probable reserves at its
Wiriagar and Berau blocks -- quantities sufficient for the
construction of two liquefied natural gas (LNG) trains.

BG Plc holds a 50 percent stake in the Muturi block where
another large gas find was made last October. It said it could
link up with ARCO in the construction of transportation and
processing facilities.

BG Plc said it was hoping to announce the results of current
exploration drilling by the end of this month.

"Clearly more gas is the key to this project and any new finds
are welcome," the spokesman said.