BG Group strikes crude in first well off Chinese coast

OIL company BG Group has struck oil-bearing sands off the Chinese coast at its first attempt, the firm said yesterday.

The firm will now test the find in the South China Sea to assess potential for oil production.

If viable hydrocarbons are found, the Chinese state-run oil company CNOOC has the right to buy up to 51 per cent of the proceeds but will contribute to development costs.

BG Group is due to complete a second well in the area near Hainan Island in the new year.

Shares closed 1.3 per cent lower at 1,301p.