RNS Number:4263W
Fusion Oil & Gas PLC
27 May 2002


                              Fusion Oil & Gas plc

                                   ("Fusion")


           Fusion Signs Offshore Technical Cooperation Agreement with
               Saharawi Arab Democratic Republic (Western Sahara)


Fusion announces that its operating subsidiary, Fusion Oil & Gas NL, has signed
an exclusive Technical Cooperation Agreement ("TCA") with the Government of the
Saharawi Arab Democratic Republic ("SADR").  The TCA covers the entire offshore
territory of the SADR, an area of approximately 210,000 square kilometers,
extending from Mauritania in the south to Morocco and the Canary Islands (Spain)
in the north.

According to the terms of the TCA Fusion will undertake, on behalf of the SADR,
a detailed study and evaluation of the petroleum potential of the offshore
territory through the collation and integrated interpretation of all relevant
and available geological and geophysical data. This process will assist the
Government of the SADR to better understand the offshore oil and gas potential
of the area and formulate appropriate policy to attract international
investment.

It is anticipated that the study will take up to sixteen months to complete.
Upon completion Fusion will have the exclusive right to select a maximum of
three exploration licences, each covering an area of up to 20,000 square
kilometers.  The Government of the SADR has given an undertaking to award the
nominated exploration licences within 6 months of the SADR being admitted to the
United Nations.

Alan Stein, Managing Director of Fusion, commented:

"The signing of this agreement with the Saharawi Arab Democratic Republic is an
exciting milestone for Fusion and follows more than three years of consultation
with the Government concerning a collaborative assessment of the offshore oil
and gas potential of the SADR.  Although past exploration in the area has been
limited Fusion has the relevant regional experience and expertise that will
allow it to conduct a full and detailed evaluation. A preliminary assessment of
historical data suggests that a similar gross stratigraphic sequence to that
encountered in Fusion's licences to the south in offshore Mauritania, The
Gambia, Senegal and Guinea Bissau can be anticipated.  We are deeply honoured to
have been selected by the Government of the SADR to conduct such a significant
project."


                                                                     27 May 2002



For further details please refer to the company's web page www.fusionoil.com.au
or contact:

Fusion Oil & Gas plc
Alan Stein, Managing Director               Tel:     +61 89 226 3011
Jonathan Taylor, Exploration Director       Fax:     +61 89 226 3022
Australia                                   e-mail:  astein@fusionoil.com.au

Peter Dolan, Chairman                       Tel:     020 8891 3252
England                                     Fax:     020 8891 1555
                                            e-mail:  peter@fusionoil.demon.co.uk

College Hill Associates
Peter Rigby                                 Tel:     020 7457 2020
James Henderson                             Fax:     020 7248 3295
                                            e-mail:  peter.rigby@collegehill.com



Editor's Notes:

Western Sahara is currently regarded by the United Nations (UN) to be a non-self
governing territory.  Following the end of Spanish Colonial Rule in 1975 the
International Court of Justice (ICJ) rejected Moroccan and Mauritanian claims
concerning sovereignty over Western Sahara.  Despite the judgment of the ICJ the
territory of Western Sahara was occupied by Morocco and Mauritania in 1976.  In
1979 Mauritania withdrew all claims to the territory and recognised the SADR as
the legitimate governing authority of the territory.  Following a prolonged
military conflict between SADR and Morocco, the UN brokered a ceasefire in 1991
and formulated a mechanism to resolve the conflict through a UN organised
referendum of the indigenous population.  The work of the UN towards conducting
the referendum or otherwise resolving the issue of sovereignty is continuing
under the guidance of the former US Secretary of State James Baker in his role
as the UN Secretary General's Special Envoy to Western Sahara.  The SADR is a
full member of the African Union and is recognised internationally by 76
countries.

Fusion is one of the largest holders of offshore exploration acreage in
Northwest Africa and has successfully completed similar TCA-type arrangements
with the Government of The Gambia and the Agence de Gestion et de Cooperation
entre la Guinee-Bissau et le Senegal ("AGC") which is the Joint Commission
established by the Governments of Senegal and Guinea-Bissau to administer
petroleum and fishing activity within their maritime border zone.  In May 2001
Fusion announced that its first frontier exploration well in the region,
Chinguetti-1, offshore Mauritania was a significant oil and gas discovery.





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