Press Release

BG Group strategy to deliver long-term growth over next decade and beyond

7 February 2008

BG Group strategy to deliver long-term growth over next decade and beyond

BG Group will today present its Q4 and Full Year 2007 results and annual strategy update.

Key points from the strategy presentation will include:

- earnings per share up 11% in 2007, with continued strong outlook for earnings potential to 2009;

- significant and sustained value contribution from the Group's flexible global LNG portfolio, with 2007 operating profits up 48%, supply positions secured to 2020 and beyond, and financial outlook substantially improved;

- production in 2009 expected to be in a range between 680 000 and 710 000 barrels of oil equivalent per day; production growth from 2005 to 2012 is expected to show a compound annual growth rate of between 6% and 8%;

- total hydrocarbons initially in place on the Tupi discovery offshore Brazil (BG Group 25%) now estimated at between 12 and 30 or more billion barrels of oil equivalent, increased from previous estimates of 1.7 to 10 billion barrels of oil equivalent;

- BG Group total reserves and resources have increased by around 3 billion barrels of oil equivalent in two years (up 42%), and now exceed 10 billion barrels of oil equivalent, amounting to 46 years of production at 2007 levels; and

- the Group's total reserves and resources could support a compound growth rate in production volumes of between 6% and 8% per year out to 2020.

BG Group Chief Executive Frank Chapman said: "We see a positive outlook across our diverse global portfolio and have confidence in our long range prospects."

He added: "Our portfolio demonstrates the advantages of a strong production foundation, a leadership position in LNG, a proven understanding of global gas markets, the significant expansion of our reserves and resources base and the potential of our exploration programme. I believe the Group has a very encouraging future over near, medium and long-term time horizons."

The Group's plans will be presented to analysts and investors at 1400 GMT on 7 February 2008 at an event hosted by BG Group Chairman Sir Robert Wilson, Chief Executive Frank Chapman and Chief Financial Officer Ashley Almanza. The presentation will be webcast live at www.bg-group.com, after which a recording of the event and a copy of the slide presentation will be available online.

The Group has also published details of its Q4 and Full Year results for 2007, announced separately at www.bg-group.com, which should be read in conjunction with this news release.

Business context

Global demand for gas continues to increase, driven by the energy needs of established economies, rapid growth in emerging economies and by public policy responses to concerns about climate change. As the hydrocarbon fuel with the lowest carbon emissions impact, gas plays an important role in efforts to address global warming.

BG Group is strongly positioned to respond to these trends, with a successful strategy focused on connecting competitively-priced resources to specific, high-value markets. Active in 27 countries on five continents, the Group has a broad portfolio of upstream and downstream assets.

Key portfolio developments

Global LNG

Contracted supply volumes of 12.6 million tonnes per annum through to 2020 and beyond; plans to extend current supply position through additional contracted feedstock in Nigeria as well as potential from other sources, including Australia.

Flexible global portfolio yields ability to respond swiftly to demand in high-value, premium markets; one-third of all cargoes were re-marketed to capture higher-margin opportunities in 2007. EBITDA guidance increased to 30% for both 2008 and 2009.

Australia

Announced alliance with Queensland Gas Company Limited (QGC), a leading coal seam gas exploration and production company based in Eastern Australia.
Significant reserves potential in Surat Basin onshore coal seam gas acreage.
BG Group to hold a 70% interest in planned LNG export facility on the Queensland coast and will offtake 100% of initial production, planned at around 3 - 4 million tonnes per annum.

Brazil

Very successful appraisal of Tupi discovery.
One other discovery in the Santos Basin in 2007 (Carioca), with further prospects still to be explored, including two with very large potential - Corcovado and Iguacu Complex.
Strong growth in BG Group's downstream gas subsidiary, Comgas - the largest transmission and distribution company in Brazil.

Egypt

Further large-scale development of West Delta Deep Marine and Rosetta fields.
Exploration drilling scheduled on El Burg and El Manzala prospects in 2008.

India

Production volumes from the Panna/Mukta and Tapti fields on India's west coast grew by 33% in 2007; total volumes have now doubled since BG Group took responsibility for technical operations on the fields in 2002.

Notable success on the Panna field, where production increased by 25% in 2007, and on Tapti, where a major new complex increased production capacity by 80%.

Kazakhstan

Excellent year, with record production from Karachaganak field in 2007.
Fourth stabilisation train on schedule for start-up in 2009.
Around 50% of front end engineering and design work completed on Phase III project.
New Gas Sales Agreement signed in 2007 and agreements on export capacity to western markets will underpin decision to sanction Phase III expansion in 2008.

Nigeria

BG Group equity in the proposed development increased to 14.25%.
Reviewing technical solutions to reduce cost and improve economics at Olokola LNG (OKLNG) export facility.

Norway

Portfolio contains 22 exploration and production licences, 14 of them operated by BG Group.
Five wells in 2008 - four exploration prospects, and an appraisal well on the Bream discovery.

Oman

1,500 sq km of 3D seismic data acquired on Abu Butabul discovery.
Drilling first of 8 to 10 appraisal wells.

Thailand

Record production from Bongkot North field in 2007, 14 years after first gas.
Successful five-well exploration programme on Bongkot South; gross reserves increased to around 1.2 trillion cubic feet of gas, with first production expected in 2011/12.

Trinidad and Tobago

Considerable progress addressing operational challenges identified in Atlantic LNG Train 4.
Farmed-in to Block 5c in the East Coast Marine Area in 2007. Three well drilling programme underway; the first well, Victory, under evaluation after successful tests.

Tunisia

Continuing development of the Miskar field.
Second development, Hasdrubal, on schedule for first production in 2009.

UK North Sea:

BG Group UK North Sea production projected to maintain current output levels of 50 million barrels of oil equivalent per year out to 2012, with the potential to sustain this to 2015;
Buzzard field producing up to 220,000 barrels of oil equivalent per day, 10% above projected capacity; gross reserves increased to more than 600 million barrels of oil equivalent.
Additional reserves established on Jasmine discovery; first production expected 2011.

Exploration overview

20 wells drilled in 2007, with 12 successes.
Successes included wells in Bolivia, Brazil, Norway, Thailand and the UK.
Extensive seismic acquisition activity, with surveys in Algeria, Brazil, Canada, China, Libya, Nigeria, Norway, Oman, Trinidad and Tobago and the UK.
More than 4,600 square kilometres of new exploration acreage acquired, with additional licences in Canada, India, Norway, Trinidad and Tobago and the UK.

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