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BG acquires exploration projects offshore Newfoundland

Published: 13:50 28 Sep 2015 BST

stjohnsnewfoundland
The projects are in the Atlantic, about 200kms from St. John’s, Newfoundland

BG Group (LON:BG.) has moved into three projects some 200 kilometres off the Canadian coast.

The UK listed major, which is set to merge with Shell, has acquired from Repsol stakes of between 10% and 25% in licence blocks offshore Newfoundland.

It sees BG partnering with StatOil and Chevron.

“This provides the company with access to early stage exploration in a proven prospective basin ahead of the first well being drilled later this year,” BG said in a statement.

It comes on the same day that Shell halted its controversial drilling in Arctic waters offshore Alaska.

Shell this morning told investors it had stopped drilling the Burger well, offshore Alaska. The exploration well revealed indications of oil and gas, but the evidence was insufficient to warrant further exploration, Shell said.

It decided to cease further operations in the arctic exploration project for the foreseeable future.

The oil and gas ‘supermajor’ blamed the Burger result, the high cost of drilling in the remote location and an “unpredictable federal regulatory environment” for the decision to quit.

"Shell continues to see important exploration potential in the basin, and the area is likely to ultimately be of strategic importance to Alaska and the US,” said Marvin Odum, director of Shell Upstream Americas.

“However, this is a clearly disappointing exploration outcome for this part of the basin.”

Shell expects to take a financial hit as a result of the decision, and it highlights that the exploration project was valued at US$3bn in its balance sheet, as well as US$1.1bn committed to future contracts.

Whilst it is not committing to more exploration at the moment, Shell still owns 100% of 275 licence blocks in the Chukchi Sea, offshore Alaska.

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