BG Agrees With El Paso Corp.

British Gas Group, the gas major of the UK, has signed a Sale and Purchase Agreement with Brazilian company El Paso Corporation.

According to the Agreement, British Gas will acquire an exploration license in the Santos Basin, 140 kilometers offshore Sao Paulo, Brazil.

BG Group will obtain 100 percent ownership and operating rights of block BM-S-13 for a cash consideration of US$23.5 million, subject to Agncia Nacional do Petrуleo approval. BM-S-13 is in the gas prone area of the Santos Basin and is on trend with the Merluza gas field (Petrobras), the recent Luana gas discovery (2003, El Paso) and the giant Mexilhгo gas discovery (2003, Petrobras) in block BS-400.

Rick Waddell, BG Group Managing Director and Executive Vice President South America, said: "BG plans to explore for gas in BM-S-13 to supply the rapidly growing Brazilian market."

BG Group is already a partner in the Petrobras-operated BM-S-9, 10 and 11 deepwater exploration blocks in the Santos Basin with 20% to 30% interests.