Deepsea Metro I drill ship, Tanzania

Exploration: Driving value

Malcolm Brown, EVP Exploration
September 2013
Legal notice
The following presentation contains forward-looking statements concerning BG Group plcs
strategy, operations, financial performance or condition, outlook, growth opportunities or
circumstances in the countries, sectors or markets in which BG Group plc operates. By their
nature, forward-looking statements involve uncertainty because they depend on future
circumstances, and relate to events, not all of which can be controlled or predicted. Although the
Company 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 the guidance given in this presentation for a number
of reasons. 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 Principal risks and
uncertainties included in the BG Group plc Annual Report & Accounts 2012. Nothing in this
presentation should be construed as a profit forecast and no part of this presentation
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 plc undertakes no obligation to update any forward-looking statements.
No representation or warranty, express or implied, is or will be made in relation to the accuracy
or completeness of the information in this presentation and no responsibility or liability is or will
be accepted by BG Group plc or any of its respective subsidiaries, affiliates and associated
companies (or by any of their respective officers, employees or agents) in relation to it.
1
Agenda
Exploration strategy
Summary
Project review
2
Exploration
strategy
Leverage exploration commercial skills
to gain access:
Target low cost, early entry
Focus on finding new giant discoveries
Leverage our current positions:
Existing infrastructure
Knowledge of local geology
Relationships with governments and
key stakeholders
Existing hubs New basins
Global presence
Strategy has yielded consistent results
15 giant discoveries in 15 years
Introduction
3
Proven
industry
leading
explorer
* Source: BG Group
** Source: Evaluate Energy, Peer Group includes Super Majors, US and European Integrated Majors
*** Source: Wood Mackenzie (2002-2011 excluding National Oil Companies, including Petrobras)
BG Group organic reserve and
resource adds* (mmboe)
3 year reserve replacement** Value creation*** 2002-11 ($bn)
-500
500
1500
2500
0%
100%
200%
300%
2002 2007 2012
BG Group Combined companies
0 10 20 30 40
BG Group Majors Peers
130
Introduction
4
Levers for
success
Wide geological
expertise
People
& culture
Robust
screening
process
Fast decision
making;
commercial
agility
Speed in
execution of
E&A
programme
Active portfolio
management
Introduction
5
Wide
geological
technical
expertise
Proven: Brazil, Kazakhstan, Tunisia, India
New: Honduras, Kenya
Proven: Trinidad & Tobago, Egypt, Thailand
New: Tanzania
Carbonates
Proven: UK, Kazakhstan
New: China, Egypt, Norway
Proven: Australia (Surat), USA (Marcellus shale)
New: Australia (Bowen deep gas sands, Cooper shale)
Tertiary deltas
HPHT
Unconventionals
Applied globally
Introduction
6
People
& culture
Successful formula proven
by 80% graduate retention
rate over 10 years
Large company opportunities
World-class projects, global scope
Small company culture, ~300 geoscientists
Networked, flat organisation
Differentiation
20-year track record
10-year average male / female intake ~50:50
27 nationalities
International graduate programme
Individually tailored
Exploration Academy drives BG way
for successful exploration
Focused career development
Introduction
7
Consistent
and robust
screening
process
4 presented and approved
More than 100 evaluated in 2012
Basin Framework Analysis
Database
Collation
Stratigraphic
Modelling
Play Definition
Structural
Modelling
Geophysical
Interpretation
Tectonic
Setting
Play Evaluation
Gross Depositional
Environment
Mapping
Well Failure
Analysis
Petroleum
Systems
Modelling
CRS Mapping
Play Statistics &
YTF Estimation
Statistical
Analysis
Analogue
Identification
Yet-to-Find
Estimation
Play & Basin
Ranking
Creaming Curves
& Exploration
History
Introduction
8
Disciplined
approach to
new projects
Projects should provide a competitive advantage
Early entrant
Distinctive knowledge
LNG opportunity
Hub strategy
Introduction
9
Strong E&A
pipeline
of future
projects
Access Explore Execute
Sanction
8
6
4
2
Entry
Years to sanction
Lula further
development
Egypt
Oligocene
Kenya
Bolivia
Huacareta
Uruguay
Madagascar
Honduras
Australia
Bowen CSG
Australia
Bowen deep
gas sands
Jackdaw
WDDM
9b
Carioca
Karachaganak
expansion
project
Tanzania
Brazil
(Barreirinhas)
Australia
Cooper
basin
Iara
~22 billion boe unrisked potential*
* Net to BG Group as at end 2012, excludes Honduras, Bolivia (Huacareta) and Brazil (Barreirinhas)
T&T
(Bounty)
Introduction
10
Managing
the portfolio
Early entry
High levels
of equity &
control
Manage capital and risk
Optimisation
& expansion
Retain assets
with strong
cash flow
Bring in strategic partners,
reduce equity.
Divest as appropriate
Entry Explore Appraise Develop Production
Introduction
11
Distinctive knowledge
Trinidad
& Tobago -
potential
LNG plateau
extension
BG Group integrated
operations
Equity production supplies
LNG exports into
BG global portfolio
Domestic market
Aiming to extend
production plateau
Hub strategy
LNG opportunity
VENEZUELA
TRINIDAD
ECMA
NCMA
Caribbean Sea
Atlantic Ocean
Gulf of Paria
Trinidad
Venezuela
Atlantic
LNG
VENEZUELA
Poinsettia
Ixora Field
Chaconaia
Hibiscus
Endeavour
Starfish
Dolphin Deep
Dolphin
Manatee
Loran
Scale
0 25 km
Phoenix Park
Point Fortin
Beachfield
Port of Spain
Trinidad & Tobago
Central Block
Victory
Bounty
12
Greater
Dolphin
area hub
exploration
Three discoveries in
Block 5(c) in 2008 & 2009
Acquired 3D seismic
covering entire greater
Dolphin area in 2012
Evaluating large Pliocene
leads
Bounty appraisal planned
for 2014
Exploration drilling
planned for 2015
Greater Dolphin area gas
resource potential >6 tcf*
Could underpin 5-10 year
export contract extension
Trinidad & Tobago
BLOCK 5(d)
BLOCK 5(c)
BLOCK 6(d)
BLOCK 6(b)
BLOCK 5(a)
BLOCK E
3D Seismic
Coverage
MILES
0 2.5 5 7.5 10
Dolphin Deep
Cachalot Lead
Dolphin
Starfish
Endeavour
Victory
Bounty
Manatee
* Net unrisked to BG Group as at end 2012
Distinctive knowledge
Hub strategy
LNG opportunity
13
Multi-strata
objectives
Trinidad & Tobago
Distinctive knowledge
Hub strategy
LNG opportunity
Not to scale
Dolphin-1
Bounty-1 &
Endeavour-1
Dolphin
Deep-1
14
Planned
forward
programme
Trinidad & Tobago
Seismic acquisition & processing
Analysis & prospect
mapping
2014 2015 2016 2017 2013
Initial
appraisal
drilling
Exploration drilling
Deep water
licence rounds
Distinctive knowledge
Hub strategy
LNG opportunity
15
North Sea
hub
opportunities
Aiming to replicate
Armada success in other
operated hubs
Geographical focus
Central North Sea
Near existing BG Group
equity infrastructure
Significant yet-to-find
potential
Within 30 km radius,
>10 prospects each
>100 mmboe* potential
Focus on HPHT
opportunities
Material, high value
Technically challenging
Potential for new hubs
(e.g. Jackdaw)
Distinctive knowledge
Hub strategy
North Sea
* Gross unrisked to BG Group as at end Q2 2013
UK Norway
Key CNS hubs
Knarr
Armada / Everest hub
Lomond / Erskine hub
Jackdaw
Blake
Buzzard
J-Block
16
Egypt -
Oligocene
potential
HPHT Notus well in
progress
Farmed-out 40% in Q4 2012
Early results encouraging
Oligocene play; ~6 tcf*
New hub opportunity
Kala well to spud Q4 2013
Near existing BG Group
equity infrastructure
Egypt
Distinctive knowledge
Hub strategy
LNG opportunity
* Net unrisked to BG Group as at end 2012
BG Group-operated blocks BG Group non-operated blocks
Kala
Notus
WDDM
17
Australia -
exploration
programme
Bowen Basin CSG
Pilot / core hole programme in 2013
Pilot frac-testing in 2014
Bowen Basin deep gas sands
Proven concept
Four-well programme to start Q2 2014
Cooper Basin tight gas sands /
shale
Encouraged by recent offset wells
Four-well programme to start Q3 2013
Bowen DGS
Australia
Distinctive knowledge
Hub strategy
LNG opportunity
18
2014 2015 2016 2017
Planned
forward
programme
Subsurface analysis
Seismic acquisition & processing
Australia
Bowen CSG pilot
production testing
Bowen CSG appraisal drilling
Cooper exploration
drilling
Cooper exploration & appraisal drilling
Decision point for commercialisation
* Deep gas sands
Bowen DGS* appraisal drilling
Bowen DGS*
exploration
drilling
Distinctive knowledge
Hub strategy
LNG opportunity
19
Brazil -
significant
upside
potential
to Iara
BM-S-11 Iara is a giant field - similar oil in place
to Lula
Four successful exploration wells and three
drill stem tests to date
Recent Iara-4 well comparable to the best
results in BG Groups Santos Basin interests
Iara high-angle well currently drilling
Further E&A activity planned
2 FPSOs currently assigned for development
Brazil - Iara
Distinctive knowledge
Iara
Iracema
Lula
Iara
high-angle
Iara-4
Iara-3
Iara-2
Iara-1
20
Adding value
through
applied
technology
Leveraged carbonate expertise
Drilling, multi-stage acid frac
Field development
Seismic reprocessing
Optimising well locations
Planned high-angle wells (Iara)
Brazil - Iara
Distinctive knowledge
Iara
high-angle
21
Tanzania -
significant
progress in
3 years
Exploration analysis and LNG market
insights drove entry
Major acreage position (~20 850 sq km) with
multiple play types
Farmed in and moved quickly to drill
12 E&A wells across all 3 blocks;
~3 years 100% success
1 giant field & 1 potential giant so far
Jodari is world-class reservoir
Total gross resources ~13 tcf
Further exploration upside
Distinctive knowledge
Early entrant
LNG opportunity
2
0
0

k
m
Tanzania
Rufiji Delta
system
TANZANIA
BLOCK 4
BLOCK 3
Indicative
Plant
Location
BLOCK 2
(Statoil)
BLOCK 1
Ngisi
Chewa
Pweza
Papa
Mzia
Jodari N
WD (m): 500 1,000 2,000
Ruvuma Delta
system
Chaza
Mkizi
Jodari
BLOCK 2
(Statoil)
LNG
22
Progress
demonstrates
speed of
execution
S
e
i
s
m
i
c
D
r
i
l
l
i
n
g
2010 2011 2012
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q4
3D 3D 3D
P
w
e
z
a
-
1
C
h
e
w
a
-
1
C
h
a
z
a
-
1
J
o
d
a
r
i
-
1
M
z
i
a
-
1
P
a
p
a
-
1
J
o
d
a
r
i
-
2
J
o
d
a
r
i

N
o
r
t
h
-
1
N
g
i
s
i
-
1
M
k
i
z
i
-
1
P
w
e
z
a
-
2
1
st
campaign 2
nd
campaign 3
rd
campaign
Q1 Q2 Q3 Q4
2013
M
z
i
a
-
2
Tanzania
F
a
r
m
-
i
n

t
o

B
l
o
c
k
s

1
,

3

&

4
P
w
e
z
a
-
3
M
z
i
a
-
3
Distinctive knowledge
Early entrant
LNG opportunity
23
Jodari - giant
field with
world-class
reservoir
Jodari-1 Jodari-2 &ST Jodari North-1
Gas
Aquifer
Gas
10km
High quality seismic, completely appraised and tested
Jodari
North
Jodari
Main Channel North Channel
Tanzania
GWC
Distinctive knowledge
Early entrant
LNG opportunity
24
Intensive
Block 4
appraisal
programme
Tanzania
8 km
Pweza-1 Chewa-1 Pweza-2 Pweza-3 Ngisi-1, ST-1 & ST-2
20 km
M500
M505
M510
M380
N S
M501
Gas
Aquifer
Distinctive knowledge
Early entrant
LNG opportunity
25
Mzia -
a potential
giant
Tanzania
Aquifer
Mzia-3 Mzia-1 Mzia-2
US
GWC
Lower sand
Middle sand
Upper sand
1
2
3
LS3
LS2
LS1
Lower
Middle
Upper
Distinctive knowledge
Early entrant
LNG opportunity
4 km
26
Planned
forward
programme
Tanzania
2014 2015 2016 2017 H2 2013
Further exploration & appraisal drilling
Potential additional
exploration drilling
Analysis & prospect mapping
Additional seismic acquisition,
processing & reprocessing
Site selection with
Block 2 participants
FEED
FID
Pre-FEED
Distinctive knowledge
Early entrant
LNG opportunity
27
Leveraging carbonate
experience
Approval to country entry
in ~6 months
L10a & L10b ~10 400 sq km
Acquired > 4 500 sq km
3D & additional 2D seismic
data
Multiple play types
Two wells planned for 2014
Potential >1 bn boe*
* Net unrisked to BG Group as at end 2012
Kenya
Distinctive knowledge
Early entrant
Kenya -
potentially
significant oil
opportunity
Turaco
Chatterer
Babbler
Sunbird
Crombec
Weaver /
Francolin
Longclaw
Hoopoe /
Cisticiola
28
Inboard area
carbonate
prospects
Carbonate reefs developed over
extensive platform.
Underlying Tertiary
source rocks
Sunbird
Babbler
Turaco
W E
Tembo Trough
Kenya
Distinctive knowledge
Early entrant
29
Planned
forward
programme
Kenya
Seismic acquisition
& processing
Subsurface analysis
& prospect mapping
Initial drilling Potential 2nd drilling phase
2014 2015 2016
Potential further
seismic acquisition
& processing
Distinctive knowledge
Early entrant
30
Uruguay -
large frontier
oil play
Awarded 3 blocks in 2012
~13 000 sq km
Highly competitive
Successful bidding strategy
Cretaceous fan play
3D seismic commenced
6 weeks after blocks
awarded
2nd phase scheduled for
Q4 2013
Farm-down / equity-swap
opportunities
Potential >1 bn boe*
Atlantic Ocean
URUGUAY
BRAZIL
ARGENTINA
0 50 100km
BG Group licences Other licensed areas
* Net unrisked to BG Group as at end 2012
Uruguay
Distinctive knowledge
Early entrant
AREA 8
AREA 9
AREA 13
31
Uruguay -
multiple
leads
Cretaceous deep water
play identified on existing
2D data
3D data will define and
prioritise exploration
effort
BG Groups largest operated
3D survey to-date
Phase 1 - Majority of blocks
below 2 500m water depth
covered
Phase 2 - Focus on outboard
acreage
0 1020 3040
km
Uruguay
Distinctive knowledge
Early entrant
Potential leads Phase 1 3D seismic
32
2014 2015 2016 2017 2013
Planned
forward
programme
Uruguay
Seismic acquisition & processing
Subsurface analysis &prospect mapping
Potential initial drilling programme
Potential partnering
Distinctive knowledge
Early entrant
33
Honduras
- large
frontier
opportunity
Negotiated large licence
(~35 000 sq km) in 2012
No drilling for more than
30 years
Oil and gas shows in older
wells; some wells flowed
Gravity survey 2013-2014
Favourable terms
Minimum 1 000 kms
2D seismic
Minimum 500 sq kms
3D seismic
1 well to enter second
exploration phase
Potential >1 bn boe*
Nicaragua
Honduras
Patuca Basin
Mosquitia Basin
Mosquitia High
Huani-1 (1974)
Oil show
Tuapi-1 (1978)
Oil & gas shows
Touche-1 (1957)
Gas show
Main Cape-1 (1973)
Flowed 280 bopd
Oil seeps
* Net unrisked to BG Group as at end Q2 2013
Honduras
Early entrant
34
Honduras
Cross-section
across
Mosquitia &
Patuca basins
Plays
Eocene carbonates and clastics
Oligocene reefs
Miocene + Pliocene clastics
Early entrant
35
Agility &
reputation
important
success
factors
Honduras

Global gas player

Successful explorer

Speed of execution

Social performance pedigree

Integrity and business principles

Application to contract in <6 months

Substantial challenges given no

recent activity

Multi-discipline team engaged with

various parts of government
Licence
application
November 2012
Contract
awarded
April 2013
BG Groups reputation
critical to PSC award
Early entrant
36
Planned
forward
programme
Honduras
2014 2015 2016 2017
Gravity / gradiometry
acquisition & processing
Subsurface analysis
& prospect mapping
Potential initial
drilling programme
Seismic acquisition & processing
Early entrant
37
Brazil
Barreirinhas
Basin
- large new
basin entry
* Net unrisked to BG Group as at end Q2 2013
Brazil - Barreirinhas
Distinctive knowledge
Early entrant
~7 000 sq kmfrontier
position in oil play
10 operated blocks:
6 at 100%; 4 at 50%
Farm-down / equity-swap
opportunities
3D seismic planning
underway
Potential >1 bn boe*
AP1
AP2
AR2
38
Ghana
Cretaceous
fan play
analogue
Paon
~200 mmboe
Jubilee Area
~1 bn boe
Barreirinhas bid
round area
90Ma
110Ma
Brazil - Barreirinhas
Distinctive knowledge
Early entrant
39
Significant
prospectivity
Brazil - Barreirinhas
Distinctive knowledge
Early entrant
BG Group interpretation 40
Sector AP-1
seismic line
D
e
p
t
h

(
m
)
Rollover domain
BAR-M-252 BAR-M-217
2000
D
e
p
t
h

(
m
)
0
4000
6000
8000
2000
0
4000
6000
Tertiary
Fan
Cretaceous
Fan
Base Tertiary
Santonian
Cenomanian -
Turonian
Apto-Albian
Source
rocks
Cretaceous
Fan
SW NE
Brazil - Barreirinhas
Distinctive knowledge
Early entrant
BG Group interpretation 41
2015 2016 2017 2014
Planned
forward
programme
Brazil - Barreirinhas
Seismic acquisition & processing
Subsurface analysis &prospect mapping
Potential initial drilling
Potential partnering
Distinctive knowledge
Early entrant
42
Improved
opportunity
set
Delivered 4 new basins in ~2 years
Resulting in a larger, better-balanced
portfolio
Almost 50 000 sq km net new acreage
More high-impact opportunities
Oil, gas balance
Leveraging BG Group strengths
Existing hubs
Appraisal
New basins
Trinidad & Tobago
North Sea
Bolivia
Egypt
Brazil - Barreirinhas
Kenya
Brazil - Iara
Brazil - Carioca
Tanzania
Thailand
Australia & USA
- unconventional
Uruguay
Honduras
Portfolio overview
43
Exploration
2013-2015
activity
Brazil
Bolivia
Trinidad &Tobago
USA
UK
Norway
Egypt
Thailand
Uruguay
Kenya
Tanzania
Madagascar
Australia
Drill 50-60 conventional
E&A wells
10-15 high impact wells
Access 3 new basins
Potential for >100
unconventional wells
Exploration spend:
$1.6-1.8 bn pa
Top quartile finding cost
Existing hubs
New basin entry
Honduras
Brazil
(Barreirinhas)
Portfolio overview
44
Exploration
& appraisal
milestones
H2 2013 -
2015
Egypt: Notus, Kala
Brazil: Iara 4 and
high-angle well tests
and up to 2 TBC
UK: Jade South / Romeo
North
Tanzania: Mzia and
Pweza appraisal
Australia: Cooper Basin
and Bowen CSG
2013 2014 2015
Kenya: 2 inboard wells
Tanzania: Terrace
outboard, up to 2 wells
Australia: Cooper Basin
& Bowen DGS
North Sea: Jasmine
North and potential
appraisal
Trinidad: Bounty
appraisal
Brazil: BM-S-50
potential appraisal
Trinidad: Cachalot and
Dolphin Deep wells
North Sea: Everest hub
play and Pelikan
Kenya: second phase
Uruguay: potential
1st well
Madagascar:
potentially 1 well
Bolivia: potentially
2 wells
Portfolio overview
Bold = high impact wells (potential >100 mmboe net unrisked) 45
Exploration
summary
World-class
exploration
team
Consistent
strategy
Proven track
record
Success is
repeatable
High-quality
opportunity set
Portfolio
management /
capital
discipline
Conclusions
46