Mauritania Update

RNS Number:3524T
Premier Oil PLC
17 December 2003



                                 PREMIER OIL PLC
                                  ("Premier")


                Premier to Increase Interests in Mauritania


Premier is pleased to announce the purchase by its associated company Fusion
Mauritania B Ltd of an additional 3.23% interest in Mauritania Production
Sharing Contract Area B ("PSC B") and the purchase by its associated company
Fusion Mauritania A Ltd of an additional 1.62% interest in Production Sharing
Contract Area A ("PSC A") for a consideration of US$5.15 million plus
adjustments for activities after an effective date of 1 August 2003. In
addition, a contingent payment of up to US$1.4 million may be paid on
achievement of milestones related to future exploration, development and
production success.


This consideration will be funded by Premier who, through its agreement with
Fusion Oil & Gas plc ("Fusion") announced on 28 May 2003, will acquire Fusion
Mauritania A Ltd and Fusion Mauritania B Ltd on completion of the agreement with
Fusion. Completion of the Fusion agreement will take place separately for each
PSC and will occur on Mauritanian government approval of a field development
plan for a field in each PSC.



The opportunity to acquire the additional interests arises from Woodside
Petroleum Ltd's ("Woodside") agreement announced earlier today to acquire Agip
Mauritania BV, a wholly owned subsidiary of Italian oil and gas company ENI
Exploration BV. Agip Mauritania BV currently holds a 35% interest in both PSC A
and PSC B. Woodside has agreed to on-sell to the remaining joint venturers their
pro rata share of the equity being acquired from ENI on the same terms. The
acquisition and on-selling transactions are expected to complete early in 2004.



After completion of this transaction and the transaction with Fusion, Premier's
share in PSC B, which contains the Chinguetti and Tiof discoveries, will
increase to 9.23%. Premier's share in PSC A, which contains the Banda discovery,
will increase to 4.62%.



Charles Jamieson, Chief Executive of Premier, said:


"We are delighted to have the opportunity to increase our stake in this exciting
area which includes the oil discoveries at Chinguetti and Tiof and the oil and
gas discovery at Banda. The combination of recent drilling success and more
equity represent very significant value added for shareholders."



                                                                17 December 2003


ENQUIRIES:

Premier Oil plc                                      Tel: [phone]

Charles Jamieson

John van der Welle


College Hill                                         Tel: [phone]
James Henderson
Phil Wilson-Brown



Background For Editors:


Premier Oil plc is a leading independent oil and gas company with producing
interests in the UK, Indonesia, and Pakistan. Exploration and appraisal is
ongoing in the UK, Indonesia, West Africa (Mauritania, Guinea Bissau and Gabon)
and South Asia (Pakistan and India).


The additional interests acquired in the transactions announced today do not
carry the obligation to pay royalties and other payments to Fusion.

Assuming all partners accept Woodside's offer, the current partners and
interests before and after the transaction in the PSC's are:


Company                                         PSC A                   PSC B
                                        Pre-sale    Post-sale   Pre-sale    Post-sale
                                            %           %           %           %

Woodside Mauritania                           35.0       53.85        35.0       53.85

Agip Mauritania BV                            35.0          -         35.0          -

Hardman Petroleum                             24.3       37.38        21.6       33.23

Fusion Mauritania A Ltd*                       3.0        4.62          -           -

Fusion Mauritania B Ltd*                        -           -          6.0        9.23

ROC Oil (Mauritania)                           2.7        4.15         2.4        3.69


The Government of Mauritania has the right to back in to 12% equity in
developments producing up to 75,000 barrels of oil per day.



*Premier will take up its shares of the PSC's from Fusion Oil & Gas on
completion of the transaction announced on 28 May 2003.


                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

ACQNKOKPABDKPBD