The Integrated Gas Major - BG Group

BG Group
The Integrated Gas Major
London • 7 th February 2008

BG Group
Welcome
Sir Robert Wilson • Chairman

BG Group
Introduction
Frank Chapman • Chief Executive

Legal Notice
Certain statements included in this presentation contain forward-looking information concerning BG
Group’s strategy, operations, financial performance or condition, outlook, growth opportunities or
circumstances in the countries, sectors or markets in which BG Group operates. By their nature,
forward-looking statements involve uncertainty because they depend on future circumstances, and
relate to events, not all of which are within BG Group's control or can be predicted by BG Group.
Although BG Group believes that the expectations reflected in such forward-looking statements are
reasonable, no assurance can be given that such expectations will prove to have been correct.
Actual results could differ materially from those set out in the forward-looking statements. For a
detailed analysis of the factors that may affect our business, financial performance or results of
operations, we urge you to look at the “Risk Factors” included in BG Group plc’s Annual Report and
Accounts 2006. Nothing in these results should be construed as a profit forecast and no part of
these results constitutes, or shall be taken to constitute, an invitation or inducement to invest in BG
Group plc or any other entity, and must not be relied upon in any way in connection with any
investment decision. BG Group undertakes no obligation to update any forward-looking statements.
4

The Integrated Gas Major
Key messages
• Good 2007 results
• LNG flexibility delivering value
• Earnings outlook to 2009 confirmed
• Total E&P resources now 10 bn boe, up 2 bn boe
• E&P production potential 6-8% CAGR 2005 to 2020
Delivering value to shareholders
5

The Integrated Gas Major
Total operating profit
£m
3500
3000
2500
2000
1500
1000
500
0
160
229
330
1997 2000 2003 2006
E&P
Continuing operations excluding disposals, certain re-measurements and impairments
Results prior to 2003 stated under UK GAAP; post 2003 stated under IFRS. 2003, 2004 & 2005 restated for IFRIC 4.
Total operating profit includes BG’s share of pre-tax operating results from joint ventures and associates.
Strong record of growth
CAGR 35% 1997-2007
688
833
888
1,287
1,520
T&D, LNG, Power & Other
2,389
3,103
3,248
2007
6

The Integrated Gas Major
Key messages
• Good 2007 results
• LNG flexibility delivering value
• Earnings outlook to 2009 confirmed
• Total E&P resources now 10 bn boe, up 2 bn boe
• E&P production potential 6-8% CAGR 2005 to 2020
Delivering value to shareholders
7

The Integrated Gas Major
Overview
• Strategy
• 2007 results
• Portfolio for growth
• Conclusions
8

BG Group
Strategy
Frank Chapman • Chief Executive

Strategy
Integrated Gas Major
Connect gas to
high value markets
• Build & access markets
• Serve customers
Secure competitively
priced resources
• Equity reserves
• Contracted resources
Skills to succeed across the gas chain
Strategy delivering value
Integrated Gas Major
10

Strategy
Business environment
• High commodity prices
• Cost inflation
• Increased demand for LNG
• Government’s priorities . . .
domestic vs export
• Replacing reserves
BG well positioned
Trend BG response
• Strong cash conversion
• Long-life, low cost base
• Flexible LNG supply portfolio
• Integrated approach & alignment
• Monetise resource base
11

BG Group
2007 results
Ashley Almanza • Chief Financial Officer

2007 results
Group highlights
• Good operating performance
• EPS +11% (+17% underlying*)
• Cash flow from operations +10%
• Strong financial position
• Robust outlook
• Dividend +30%
* At constant upstream prices and US$/UK£ exchange rate
Good results, positive outlook
13

2007 results
E&P volumes (mmboe)
219.2 (3.5)
2006 Disposals CATS Underlying
growth
Underlying growth of 5%
(5.5)
10.1 220.3
2007
14

2007 results
E&P benchmarking
$12
$10
$8
$6
$4
$2
$0
Top quartile unit opex performance
Annual unit opex cost trend ($/boe)
2002 2003 2004 2005 2006 2007
BG Top quartile Combined Companies Bottom quartile
Source: Evaluate Energy 2007, BG Group
Peer Group includes Super Majors, US and European Integrated Majors
15

2007 results
E&P 2007 total operating profit (£m)
2457
241
2006 Pre E&A &
CATS
(64)
E&A
expense
Continuing operations excluding disposals, certain re-measurements and impairments
Total operating profit includes BG Group’s share of pre-tax operating results from joint ventures and associates
Good operating performance
2634
(127)
(120)
2387
Underlying CATS As reported
Price/
FX
16

2007 results
2007 proved reserve additions (mmboe)
Underlying performance
Organic reserves
replacement = 107%
172
63
Revisions Developments
& sales
(117)
Underlying organic reserves replacement 107%
(8)
Acquisitions
& disposals
2007
Production
110
Price Net
17

2007 results
E&P benchmarking
$25
$20
$15
$10
$5
$0
Top quartile unit F&D performance
3 year F&D cost trend ($/boe)
2001-03 2002-04 2003-05 2004-06 2005-07
BG Top quartile Combined Companies Bottom quartile
Source: Evaluate Energy 2007, BG Group
Peer Group includes Super Majors, US and European Integrated Majors
18

2007 results
LNG total operating profit
Step change in performance
Q4
2007
Full Year
2007
Full Year
ΔYOY
Shipping & Marketing £145m £463m +39%
Liquefaction £38m £127m +22%
Business Development (£20m) (£69m) -18%
Total £163m £521m +48%
Continuing operations excluding disposals, certain re-measurements and impairments
Total operating profit includes BG Group’s share of pre-tax operating results from joint ventures and associates
19

2007 results
T&D total operating profit (£m)
231
2006
25
Comgas
Continuing operations excluding disposals, certain re-measurements and impairments
Total operating profit includes BG Group’s share of pre-tax operating results from joint ventures and associates
Comgas and India driving performance
12
2
270
(23)
247
India Other
Underlying Interconnector As
disposal reported
20

2007 results
Power total operating profit (£m)
106
2006
Continuing operations excluding disposals, certain re-measurements and impairments
Total operating profit includes BG Group’s share of pre-tax operating results from joint ventures and associates
Contribution from acquisitions
22 2 130
Acquisitions
(part year)
Other 2007
21

2007 results
E&P: Production
1000
800
600
400
200
0
2005A 2006A 2007A
2009 2012
Growth applies to the end of the period, within the period growth is non-linear
At 2008 reference conditions (see appendix)
Production outlook
BG net production (000’s boepd)
Medium term 2007-09 Long term 2010-12
Key projects:
• Buzzard
• Karachaganak
• Trinidad E&P
• Panna/Mukta/Tapti
• Hasdrubal
2005-12
CAGR 6-8%
2009
680-710,000
boepd
Key opportunities:
• Karachaganak
• Tupi
• Bongkot South
• Dolphin
• Bongkot North
• Bream
• Jasmine
• Abu Butabul
• Panna/Mukta/Expansion
• Rosetta
• Hassi Ba Hamou
• Risked exploration
22

2007 results
Production and price effects
Canada
T&T offshore
T&T onshore
Bolivia
Brazil
Norway
Tax royalties PSC /Tax royalties with minor price impact PSC with price impact
PSC price impact less than 15,000 boepd in 2012
UK
Algeria Tunisia
Egypt
Kazakhstan
Oman
India
Thailand
23

2007 results
LNG: Outlook
Liquefaction
Shipping
and
Marketing
* Pre-tax nominal return on capital invested
Capital invested
2009 – £0.8bn
2008 – 13.5 mtpa
2009 – 13.5 mtpa
** EBITDA margin:
• 1 mtpa = 51.7 tbtu
• Portfolio average expressed as a percentage of sales at $7.25/mmbtu Henry Hub
• Exchange rate assumption $2:£1
• Excludes business development expenditure
EBITDA margin raised from 18% to 30%
Return *
2008 – 15%
2009 – 16% (was 13%)
Volumes EBITDA margin **
2008 – 30%
2009 – 30% (was 18%)
24

2007 results
Framework for growth
EPS
2006 2009
Schematic representation only
Growth applies to the end of the period, within the period growth is non-linear
* World total energy consumption 2003-2030. Source: EIA 2006
** At $55 Brent conditions, $7.25 Henry Hub
Outlook confirmed
Key growth projects
• Karachaganak
• Buzzard
• US LNG
• Trinidad E&P/ LNG
• Hasdrubal
Based on firm
projects
In BG plans**
Energy growth*
Zero growth
25

2007 results
Capital investment 2007-2009 (£ billion)
7.5
0.3
Prior year Exploration Acquisitions Inflation FX
Current
Maintaining capital discipline
0.9
0.7
(0.6)
8.8
26

2007 results
Capital structure and dividend
• Capital investment for 2008 – 2009 £6.3 bn
• Substantial growth in investment opportunities
• Dividend re-based: +30%
Long-term growth, good returns
27

2007 results
Summary
• EPS +11% (+17% underlying*)
• E&P production growth 2005 to 2012: CAGR 6-8%
• LNG margin raised from 18% to 30%
• Growing opportunity set
• Positive outlook for EPS
• Strong financial position, dividend re-based +30%
* At constant upstream prices and US$/UK£ exchange rate
Delivering value to shareholders
28

BG Group
Portfolio for growth

Portfolio for growth
Key country portfolio
USA
Trinidad &
Tobago
Brazil
UK
Norway
Tunisia
Nigeria
Egypt
Core countries Potential core countries
Focusing on developing material countries
Kazakhstan
Oman
India
30

Portfolio for growth
E&P asset base
700
600
500
400
300
200
100
BG net production (000’s boepd) of assets on stream at end 2006 only
Assets in production in 2006 only
0
2006A 2009 2012 2015
At 2008 reference conditions (see appendix)
Excludes Buzzard as not on stream at end 2006
Existing E&P assets provide a strong base
31

Portfolio for growth
LNG contracted volumes
15
10
5
BG contracted volumes mtpa
Contracted volumes only
0
2006A 2009 2012 2015 2018 2021 2024
LNG business underpinned by contracted volumes
32

Portfolio for growth
Global LNG & US: Industry context
• Demand continuing to grow
• Supply projects delayed
– Cost escalation
– Construction industry capacity
– Government priorities
BG portfolio : Longevity, cost leadership and global flexibility
33

Portfolio for growth
Global LNG & US: Costs
1000
World-wide liquefaction capex ($/tpa)
800
600
400
200
0
1998 2002 2006 2010
Start up year
Source: Poten & Partners, BG
Greenfield projects
Expansion projects
BG liquefaction projects*
* BG investment
Long-term, low cost advantage
1000
800
600
400
200
US regasification capex ($/mscfd)
1998 2002 2006 2010
Start up year
Source: Public data, BG
Greenfield projects
Expansion projects
BG regasification projects*
* BG investment
34

Portfolio for growth
Global LNG & US: Supply
mtpa
25
20
15
10
5
0
NLNG
Train 7
Contracted
to 2023
Australia
Existing Future
Building on material long-term base supply
OKLNG
& Brass
Egypt
& T&T
Other term supply
Nigerian LNG T4/5
Equatorial Guinea
Egyptian LNG T2
Atlantic LNG T4
Atlantic LNG T2/3
35

Portfolio for growth
Global LNG & US: Markets
USA
Mexico
Chile
Existing import capacity
Existing liquefaction
Trinidad
UK
Spain
Current and future equity positions
Nigeria
Belgium
Italy
Egypt
Flexible portfolio delivering volumes to premium markets
EG
Future import capacity
Future liquefaction
India
S. Korea
Taiwan
In 2007, BG supplied 3.5 mtpa, or
approximately 50%* of all Atlantic
Basin volumes into Asia
* Source: BG/CERA
Japan
Markets supplied in 2007
Australia
Long-term purchases (contracted)
36

Portfolio for growth
Global LNG & US: US portfolio
Lake Charles
Houston
LNG
Atlanta
Cypress
Masspower
Elba Island
Miami
Lake Road
New York
Boston
LNG
Dighton
Regasification
Storage
Strong US integrated position creates additional value
Power
Transport Markets
37

Portfolio for growth
Global LNG & US: Conclusions
• Strong competitive position
– Large, long-life supply base
– Low cost structure
– Flexible portfolio, serving global markets
– Integrated US portfolio
• Market-led strategy
• Capturing value globally
Sustainable competitive advantage
38

Portfolio for growth
UK: Jasmine
30/6-7
Discovery
well
30/6-7
2008
sidetracks
30/6-6
Jasmine
discovery
well
30/6-6z
sidetrack
30/6-7 well
Jasmine
West
Jasmine
Northern Terrace
Undrilled Potential
Jasmine
Northern
Terrace
Jasmine
West
Julia
Horst
Major discovery, with significant upside
• BG 30.5%
• Jasmine area appraisal ongoing
• Jasmine West
– Gross reserves 100-176-275 mmboe
– Sidetrack well planned in 2008
– Concept selection underway
– Planned on stream 2011
• Northern Terrace well success
– Discovery well 30/6-7
– Gross reserves 20-100+ mmboe
– Sidetrack well planned in 2008
39

Portfolio for growth
UK: Jackdaw
30/2a Lower
Courageous
30/2c Jade
Jade
Northern
appraisal well
30/2a-6
Jackdaw
30/2c
UK
30/3a
Lower
30/3b
Norway
Important HPHT discovery, appraisal underway
• BG operator 30/2c and 30/2a
• BG increased equity in Jackdaw
– 30/2a BG 43.1% (from 34.4%)
– 30/2c BG 36.0%
• Gross reserves 20-140-250 mmboe
• First appraisal well drilling
• Second appraisal well in 2009
• Well head platform development
• Planned on stream 2013
40

Portfolio for growth
UK: Buzzard
45
30
15
Producers
Injectors
Field limit
Dec 2007
Field limit in 2003
Southern terrace
Northern panel
Central panel
Southern panel
BG net production (000’s boepd)
Enhancing reserves and production
2km
Further potential
0
2007A 2009 2011 2012 2013 2015
At 2008 reference conditions (see appendix)
• BG 21.73%
• Major oil field, on stream 2007
• Peak production 220,000 boepd
• Field area extended
• Gross reserves 600+ mmboe
• Sweetening platform in 2010
• Potential to extend plateau
41

Portfolio for growth
UK: Production
200
150
100
50
0
BG net production (000’s boepd)
50 mmboe
Producing Assets
2006A 2009 2012 2015
At 2008 reference conditions (see appendix)
Further
potential
Delivering
projects
Potential to continue extending “plateau”
• Delivering projects
– Jasmine on stream 2011
– Jackdaw on stream 2013
– Other incrementals 2009+
• “Plateau” of 50 mmboe to 2012
• Further potential
– Field upsides
– Exploration
42

Portfolio for growth
Kazakhstan: Karachaganak
Karachaganak performing strongly
• Tenth anniversary of FPSA
• Record production performance
• Operations improvement projects
• Fourth stabilisation train
– Tie in during 2008 shutdown
– On schedule for 2009
• Western export capacity
– Actual 2007: 9 mtpa
– Post fourth train: 10.3 mtpa
– Planned with Phase III: 16.1 mtpa
• Long term Orenburg GSA in-place
43

Portfolio for growth
Kazakhstan: Karachaganak Phase III & beyond
250
200
150
100
50
0
BG net production (000’s 000’s boepd) boepd
2006A 2009 2012 2015 2018
Phase II
Phase IIM & de-bottlenecking
4th Train & expanded Phase III with LPG
Full Potential
At 2008 reference conditions (see appendix)
Overall profile inline but splits will change
• Phase III being progressed
– Development concept agreed
– Gas sales 16 bcma confirmed
– Expanded to include LPG
– FEED over 50% complete
Phase III expanded and being optimised during FEED
– Gross reserves 2.4 bn boe
– Sanction 2008; on stream 2012
• Further potential in Karachaganak
44

Portfolio for growth
Egypt: E&P and LNG
Seismic image
El Burg
BG 70%
50km
Damietta
El Manzala
BG 100%
Port Said
Excellent track record and enhanced outlook
• Egypt gas production in 2007
– BG fields produce over 40% of total
– Split ca 50/50 domestic/LNG
• WDDM Phase IV on stream
• Rosetta Phase III on stream, Q1 ’08
• Prospect inventory enhanced
• Exploration drilling 2008
– El Burg & El Manzala
– Potential for early development
45

Portfolio for growth
Trinidad & Tobago
Long-term production base with growth potential
• Operational improvements
• ECMA Dolphin
– New domestic sales, 1.2 tcf
– Start July 2009, 220 mmscfd
– De-bottlenecking
– Also, ca 1 tcf of uncontracted gas
• NCMA – 3c/d Poinsettia project
– Plateau maintenance
• Farm-in to Block 5c (BG 30%)
– Three wells
– Successful tests on first well
46

Portfolio for growth
India
Panna
Mukta
Tapti
Gujarat Gas
Existing E&P assets
BG in 0India
Existing Distribution assets
Mahanagar Gas
KG-OSN-2004/1
New E&P acreage
Expanding the portfolio across the gas chain
• E&P volumes 2006-7 grew 33%
• Secured KG–OSN–2004/1
– 3D seismic in 2008
• Delivered 5 LNG cargoes
• Set up gas marketing business
• T&D volumes 2006-7 grew 9%
47

Portfolio for growth
India
60
50
40
30
20
10
0
BG net production 000’s boepd
BG net production (000’s boepd)
Mukta Existing
Panna Plan
Panna Existing
Tapti Existing
Panna/Mukta Potential
Mukta Plan
Tapti Plan
2006A 2009 2012 2015 2018
At 2008 reference conditions (see appendix)
• Panna (BG 30%)
Significant potential in existing producing assets
– Gross HIIP 1.7 bn boe
– Added 2 WHP’s and 15 wells
– Started 2 WHP’s, 9 wells, 21 infills
• Mukta (BG 30%)
– Gross HIIP 900 mmboe
– New 3D seismic underway
– Re-drilling 3 wells in process
– Evaluating further development
• Tapti (BG 30%)
– Completion of mid-Tapti project
– Further compression & satellites
– Extends plateau
48

Portfolio for growth
Tunisia
60
50
40
30
20
10
0
BG net production (000’s boepd)
Hasdrubal
Miskar Infill/
Debottlenecking
Miskar
2006A 2009 2012 2015 2018
At 2008 reference conditions (see appendix)
Miskar North
Exploration
Optimising Miskar, developing Hasdrubal
• Miskar (BG 100%)
– 3 infill wells drilled in 2007
– 3 infill wells in 2008/09
– 5% de-bottlenecking by 2009
– Miskar North drilling
• Hasdrubal (BG 50%)
– Offshore platform / 6 wells
– Project ca 45% complete
– On stream 2009
49

Portfolio for growth
Thailand: Bongkot
30
20
10
0
BG net production (000’s boepd)
BN Phase 3E, 3F, 3G, 3H
Bongkot North (BN) Existing
Full potential
Bongkot South
2006A 2009 2012 2015
At 2008 reference conditions (see appendix)
Growing production into the next decade
• Bongkot North (BG 22.22%)
– Record production in 2007
– Continuing to extend plateau
– Licence extended to 2023
– Three E&A wells in 2008
• Bongkot South (BG 22.22%)
– Five successful E&A wells in 2007
– Licence extended to 2023
– Gross reserves 1.2 tcf, 22 mmbbls
– CPP, 13 WHPs, ca 100 wells
– Sanction 2008, first gas 2011/12
50

Portfolio for growth
Nigeria
OKLNG
OPL 332
Upstream
focus area
OPL 286-DO
50km
Two further
farm-ins*
Opportunities in LNG and E&P
• OKLNG (BG 14.25%)
– Four trains, ca 5.5 mtpa each
– Shareholders Agreement signed
– Technical and cost reviews
• OPL 332 (BG 45% & operator)
– Frontier block, E&A drilling 2009
• OPL 286-DO (BG 66% & operator)
– Boi discovery ca 100 mmboe gross
– Gross unrisked potential > 1bn boe
– E&A drilling in 2008 and 2009
• Two further farm-ins*
* Subject to Government approval
51

Portfolio for growth
Oman: Abu Butabul
Multi tcf discovery under appraisal
• BG 100%, 30 year EPSA
• Gross GIIP 2-11-17 tcf
• Field 3D seismic acquired
• Two rigs secured for appraisal
• Appraisal drilling commenced
– 6-8 wells in 2007/8
– Vertical wells, proppant fracs
• Targeting production end 2010/11
– FEED in 2008
– Initial offtake of 150-250 mmscfd
• Exploration area seismic acquired
52

Portfolio for growth
Norway
Exploration drilling
Appraisal drilling
Jordbaer
North
Sea
PI North
Bergen
Nucula
discovery
Norwegian
Sea
Mandarin
Ververis
Barents
Sea
Trondheim
Bream discovery
Oslo
Tromso
Significant year for BG in Norway
• BG 22 licences, 14 operated
• Drilling 4 prospects in 2008
– 3 BG operated
– Mandarin & Jordbaer high impact
• Rigs secured
• Further drilling in 2009
• Bream (BG 40% & operator)
– Key appraisal well 2008
• Assessing Nucula discovery
53

Portfolio for growth
Australia: Queensland Gas Co (QGC) alliance
Australia
QGC assets in
Walloon Fairway
Surat Basin
Adelaide
Melbourne
Canberra
Entry into Australia
Proposed
LNG plant
Sydney
Brisbane
200 km
• BG/QGC alliance
– 20% of assets / 9.9% shares
– Consideration £299m
– Option for further 10% of assets
• High quality, low cost CSG* play
• Early stage of exploitation
• Over 7 tcf resource potential
• Domestic market growth
• Proposed 3-4 mtpa LNG plant
* CSG = Coal Seam Gas
54

Portfolio for growth
Brazil: Comgas
Gás Natural da Bolivia
GASBOL
Piracicaba
Sumaré
São Paulo state
Indaiatuba
Gása para a Região Sul
GASBOL – Fase 2
100km
Rio Claro
Limeira
Minas Gerais
Valinhos
Americana
Braganca
Campinas
Jundiai
Castelo
Itatiba
São Paulo
Campinas II
RMSP
São Paulo
Santos
Bacia de Santos
GASAN
Legend
Expansion Projects in place
Future Expansion Projects
Taubaté
São José dos Campos
Bacia de
Santos
GASPAL
Rio de Janeiro
Atlantic Ocean
Good potential for continued growth
• Brazil’s largest gas distributor
– 2007 gas sales 13.8 mmcmd
– Over 570,000 customers connected
• Customer growth 8.7% pa 2002-07
• Good economic outlook
• Potential to grow market
– Geographic expansion
– Focus on residential & commercial
• Regulatory tariff review 2009
55

Portfolio for growth
Brazil: Santos Basin overview
BM-S- 13
BM-S- 47
50 km
BM-S- 52
Rio de Janeiro
BM-S- 50
Parati
BM-S- 9
Carioca
BM-S- 10
Tupi
BM-S- 11
Major new hydrocarbon province
• Santos Basin Pre-Salt
– 300 km offshore
– Water depth 2,000m+
– Salt layers up to 2,000m thick
– Carbonate reservoirs
• BG well results to date
– Four out of four successful wells
– Exhibit excellent reservoir quality*
* Test rates limited by equipment
56

Portfolio for growth
Brazil: Tupi
Iracema
Tupi-1
Tupi Sul
World class oil discovery
20 km
• BG equity 25%; area 1,200 sq kms
• Gross HIIP now 12-30+ billion boe
• Tupi & Iracema likely one structure
• Multiple stacked reservoirs
• Well rates 10-20,000+ boepd
• Oil 28 o API
• GOR 1100-1200 scf/stb
• Re-entry & EWT Tupi Sul 2008/9
• Further appraisal wells 2009
57

Portfolio for growth
Brazil: Tupi schematic section
NW
Sag
Upper Rift
Upper Rift
Lower Rift
Basement
Tupi Sul established three reservoirs
Tupi-1 Tupi Sul
3 km
SE
58

Portfolio for growth
Brazil: Tupi notional development sequence
FPSO
spread
Flexible, phased approach to development
EWT to assess long term deliverability & producibility
e.g. 1 or 2 wells initially, then further use for appraisal
Gross production up to 20,000 bopd; Date 2009+
Production pilot to assess water & gas injection performance
e.g. 3 Producers, 1 gas injector & 1 water injector
Gross production 50-100,000 bopd and gas utilisation; Date 2011+
Initial development module utilising large scale FPSO
e.g. 10+ wells & gas export infrastructure
Gross production 100-200,000 bopd and 100-200 mmscfd of gas; Date 2013+
Full field development using multiple FPSO’s 5-10 modules
e.g. 10+ wells per FPSO & gas export infrastructure
Gross production 500-1,000,000 bopd and 500-1,000 mmscfd of gas; Date 2015+
59

Portfolio for growth
Brazil: 2008 drilling and key prospects
BM-S- 13
BG 60%
BM-S- 52
BG 40%
Corcovado (1), (2)
BM-S- 47
BG 50%
Saleta (1)
(1) Planned 2008 drilling
(2) Key prospects
BM-S- 50
BG 20%
BM-S- 10
BG 25%
Parati
Carioca
Good prospect inventory with two very significant prospects
Tupi
Tupi
BM-S- 11
BG 25%
Iara (1)
BM-S- 9
BG 30%
“Iguaçu Complex” (2)
Guará (1)
60
60

Portfolio for growth
E&P: E&A progress
• Completed 20 wells, 12 successes
• Key successes
Building future growth
Drilling 2007 Seismic 2007
– Tupi Sul and Carioca (Brazil)
– Jasmine Northern Terrace (UK)
– Bongkot South (Thailand)
– Margarita/Huacaya (Bolivia)
New Licences 2007
• Over 4,600 sq km gross acreage
acquired
– UK, T&T, India, Norway & Canada
Canada
T&T
Brazil
Algeria
• 3D: 10,500 sq kms
• 2D: 14,500 line kms
UK
Norway
Libya
Nigeria
New seismic
Oman
China
61

Portfolio for growth
E&P: 2008 E&A preview
Alaska
1 well
1 well
T&T
4 wells
1 well
Canada
3 wells
Brazil
3-4 wells
Tunisia
1 well
1 well
Tunisia Algeria
Tunisia 2-3 wells
3 wells
UK
4 wells
1 well
Nigeria
1 well
Norway
3 wells
1 well
Libya
1-2 wells
Oman
6-8 wells
Egypt
1-2 wells
Over 40 E&A wells planned to complete in 2008
India
0-1 well
Summary of wells
New plays
Play extenders
Appraisal/Near term
production
Thailand
3 wells
4-6
17-19
20-23
62

Portfolio for growth
E&P: Prospect inventory
Other
Egypt
Nigeria
Total risked exploration resources: 3,356 mmboe
UK
Norway
China
Brazil
Deepwater
Offshore Conventional
Onshore
Well balanced inventory, around 75% of resources are operated
63

Portfolio for growth
E&P: Reserves and resources
10000
mmboe
8000
6000
4000
2000
0
7,071
2,440
1,211
1,236
2,184
2005 2006 2007
SEC Proved Reserves Probable Reserves Un-booked Resources Risked Exploration
Reserves/Resources as at year end
*Based on 2007 production of 220.3 mmboe and cumulative reserves/resources
Added over 2 bn boe in 2007
CAGR 19%
8,017
2,713
1,772
1,383
2,149
10,046
3,356
3,122
1,529
2,039
Reserves/
Production*
46 Years
30 Years
16 Years
9.3 Years
64

Portfolio Portfolio for growth growth
E&P: Reserves Sustainable and production resourcesgrowth
2000
1500
1000
500
0
2005 2005A 2020
Within the period growth is non-linear
At 2008 reference conditions (see appendix)
Total Strong resource sustainable base production supports 8% outlook growth
1.6 million boepd
CAGR 8%
10,046
mmboe
3,356
1.2 million boepd
CAGR 6% 3,122
1,529
2,039
SEC Proved Reserves
Probable Reserves
Un-booked Resources
Risked Exploration
65

BG Group
Conclusions

The Integrated Gas Major
Key messages
• Good 2007 results
• LNG flexibility delivering value
• Earnings outlook to 2009 confirmed
• Total E&P resources now 10 bn boe, up 2 bn boe
• E&P production potential 6-8% CAGR 2005 to 2020
Delivering value to shareholders
67

BG Group
Appendix

Appendix
Key assumptions
REFERENCE CONDITIONS
• Brent Oil price US $55/bbl
• US Henry Hub $7.25/mmBtu
• US/UK exchange rates of $2:£1
• Prepared under International Financial Reporting Standards
• All production includes fuel gas
PRINCIPAL RISKS
• Major recession or significant political upheaval in the major markets in which we operate
• Failure to ensure the safe operation of our assets world-wide
• Implementation risk, being the challenges associated with delivering capital intensive projects on time and on
budget, including the need to retain and motivate staff
• Commodity risk, being the risk of significant fluctuation in oil and/or gas prices from those assumed
• Foreign exchange risk, in particular the US$:UK£ exchange rate being significantly different to that assumed
• Technical, commercial, economic, regulatory and country risk
For a detailed discussion of these and other risk factors, please refer to the Risk Factors included in BG Group’s Annual
Report and Accounts 2006.
Actual performance could differ materially from that shown. Accordingly, no assurances can be given that such
performance will be achieved.
69

Appendix
Glossary
∆ Increase or (decrease)
$ United States dollar
£ UK pounds sterling
£m Million UK pounds sterling
‘000 Thousand
2D Two dimensional seismic
3D Three dimensional seismic
API American Petroleum Institute
bcma Billion cubic metres per annum
billion or bn One thousand million
boe Barrels of oil equivalent
boepd Barrels of oil equivalent per day
bopd Barrels of oil per day
ca circa
CAGR Compound Annual Growth Rate
Capex Capital expenditure
CATS Central Area Transmission System
CPP Central Processing Platform
E&A Exploration and Appraisal
E&P Exploration and Production
EBITDA Earnings Before Interest, Tax, Depreciation, Amortisation
ECMA East Coast Marine Area
EPS Earnings per share
EPSA Exploration & Production Sharing Agreement
EWT Extended Well Test
F&D Finding and Development costs
FEED Front End Engineering and Design
FPSA Final Production Sharing Agreement
FPSO Floating Production Storage and Offloading
FX Foreign Exchange
GAAP Generally Accepted Accounting Principles
GIIP Gas Initially In Place
GOR Gas Oil Ratio
GSA Gas Sales Agreement
HIIP Hydrocarbons initially in place
HPHT High pressure high temperature
IFRIC International Financial Reporting Interpretation
Committee
IFRS International Financial Reporting Standards
km Kilometres
LNG Liquefied Natural Gas
LPG Liquid Petroleum Gas
m Metres
mmboe Million barrels of oil equivalent
mmbtu Million British thermal units
mmcmd Million cubic metres per day
mscfd Thousand standard cubic feet per day
mmscfd Million standard cubic feet per day
mtpa Million tonnes per annum
NCMA North Coast Marine Area
Opex Operating costs
pa Per annum
PSC Production Sharing Contract
scf/stb Standard cubic feet per stock tank barrel
SEC US Securities and Exchange Commission
sq km Square kilometres
T&D Transmission and Distribution
T&T Trinidad & Tobago
tbtu Trillion British thermal units
tcf Trillion cubic feet
tpa Tonnes per annum
WDDM West Delta Deep Marine
WHP Well Head Platform
YOY Year on Year
70