BG PLC - Re Subsid's Agrmnt with ARCO

RNS No 8282m
BG PLC
30th October 1997          


                BG plc and ARCO ANNOUNCE AGREEMENT TO COLLABORATE ON
             INDONESIAN LNG PROJECT; ANOTHER SUCCESSFUL GAS WELL DRILLED

          Subsidiaries of BG plc and ARCO today announced an agreement
          to collaborate in the supply of gas to the proposed Tangguh
          liquefied natural gas (LNG) project in Irian Jaya, eastern
          Indonesia, using reserves from the Wiriagar, Berau and Muturi
          production sharing contracts (PSCs).

          Operational responsibility for the fields within the three
          blocks feeding the previously-announced Tangguh project will
          belong to ARCO, which has been designated the PSC
          representative to state oil company Pertamina.

          Frank Chapman, BG plc Executive Director for Exploration and
          Production, said: "I am delighted with the conclusion of the
          collaboration agreement with ARCO. This will enable the
          government of Indonesia and all the partners involved to
          benefit from an optimal development of the reserves in all
          three licences".

          Last month, ARCO announced proved and probable reserves in
          excess of 13 trillion cubic feet of natural gas in support of
          the Tangguh project, a name meaning 'reliability and strength'
          given by Indonesia's President Suharto.

          Today, Atlantic Richfield Berau Inc. and BG Exploration and
          Production Ltd. announced the results of another successful
          well drilled by ARCO.

          The well, Vorwata-4, drilled under the terms of the
          collaboration agreement, is located on the leaseline between
          the ARCO-operated Berau block and the BG-operated Muturi
          block. The well flowed gas at a tubing-limited rate of 36
          million standard cubic feet per day from Jurassic age
          sandstone formations.

          Leon Codron, President of Atlantic Richfield Indonesia Inc.,
          said: "We are very pleased with the productivity and quality
          of the gas in Vorwata-4. The results indicate that the Vorwata
          reservoir discovered by ARCO and its co-venturers this year
          extends northward into the Muturi PSC, providing the area with
          additional reserve potential beyond earlier estimates and
          further supporting a multi-train Tangguh LNG project."

          To further prove the extension of the Vorwata reservoir into
          the Muturi block, BG and its partners - Cairns Limited, a
          wholly-owned subsidiary of Genting Berhad, and PT Saptapetra
          Wisesa - plan a continuous campaign of drilling in Muturi
          through to mid-1998. BG said that some of the wells will be
          testing the limits of the geological structure.

          BG said that gas shows were encountered in several prospective
          horizons while drilling the Nambumbi-1 well, located four
          kilometres northwest of the Vorwata-1 discovery well and
          designed to test for reserves at the northern limit of the
          Vorwata field.

          Mechanical difficulties prevented a comprehensive test of the
          well and it has now been suspended. Drilling continues in the
          Muturi block at Sakauni-1 which began on October 4 and is
          located 11 kilometres north-east of Vorwata-4.

          Notes

          Partners in the Berau block are ARCO (48 per cent); Occidental
          Berau of Indonesia, Inc (22.856 per cent); Nippon Oil
          Exploration (Berau) Ltd. (17.144 per cent); and KG Berau
          Petroleum Ltd. (12 per cent). Partners in the Wiriagar block
          are ARCO (80 per cent), and KG Wiriagar Petroleum Ltd (20 per
          cent). ARCO is operator of both blocks through its Atlantic
          Richfield Berau Inc. and Atlantic Richfield Wiriagar Inc.
          subsidiaries.

          BG Exploration and Production operates the Muturi concession,
          which covers 4,652 square kilometres of the Kepala Burung
          region of Irian Jaya. The first well, Mogoi Deep-1, drilled
          onshore in the northwest of the concession in 1996 recorded
          cumulative gas flows of 40 million cubic feet per day.
          Partners in the Muturi concession are: BG (50 per cent);
          Cairns Ltd, a wholly owned subsidiary of Genting Berhad (45
          per cent); and PT Saptapetra Wisesa (five per cent).

          For more information:

          BG plc
          Media enquiries:
          Peter Crumpler       Tel:   [phone]

          Investor Relations enquiries:
          Gary Rawlinson       Tel:   [phone]

          ARCO
          Albert Greenstein    Tel:  [phone]


          END

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