CNOOC seeks to preempt RI gas sale

CNOOC seeks to preempt RI gas sale

LONDON: BG Group PLC (BG.LN) Tuesday confirmed reports that
China National Offshore Oil Corp., or CNOOC, intends to preempt
the U.K. gas company's sale of its stake in a major Indonesian
natural gas project to Mitsui & Co. (MITSY).

Last month, BG said it had agreed to sell its 50% stake in the
Muturi Production Sharing Contract to Japan's Mitsui for $236
million in cash. However, the contract was conditional on the
three existing stakeholders, including CNOOC and LNG Japan Corp.,
giving up their preferential rights to purchase the stake.

LNG Japan - a joint venture between Sumitomo Corp. and Nissho
Iwai Corp. - Monday said it hopes to buy part or all of a 50
percent share that BG Group (BRG) is selling in the Muturi block.
BG's 50 percent stake includes a 10.73 percent interest in the BP
PLC-led, US$3 billion Tangguh liquefied natural gas project.

No one from CNOOC was immediately available to comment on the
preemption and BG was unable say how big a stake either CNOOC or
LNG Japan were aiming for.

The Tangguh project is expected to begin commercial production
in 2007. Output is expected to be 10 million tons of LNG a year.

A spokeswoman for BG, Petrina Fahey, said BP decided against
preempting the Mitsui sale.

Fahey also said that CNOOC's and LNG Japan's choice to block
the Mitsui sale wasn't expected to impact its sale, as the two
companies are required to purchase their stakes on the same terms
as agreed with Mitsui.--Dow Jones