The commercial start-up of the Rosetta offshore gas field is only the first step in BG Group's strategy to work with the Egyptian government to develop a presence across the gas chain with its hub based at Idku on the Mediterranean coast, BG Chairman Richard Giordano announced today.

Mr Giordano and the BG board were among senior guests invited today (Monday 19 February 2001) to Idku by Rashid Petroleum Company (Rashpetco) to visit the onshore processing plant for the Rosetta field, which began delivering gas into the Egyptian national grid on 31 January.

Speaking alongside His Excellency the Minister of Petroleum Mr Sameh Fahmi, Mr Giordano said:

"BG is already one of the largest foreign investors in Egypt, and that investment has the potential to grow significantly. The commercial start-up of Rosetta is only the first step. The second will focus on our further exploitation of the West Delta Deep Marine discoveries - the largest gas finds ever made in the country. In time, we plan to create a facility to process and export liquefied natural gas from our significant uncommitted reserves in West Delta Deep.

"Working with the Egyptian government, this would confirm BG's role as one of the leading international companies assisting in the creation of an integrated gas chain in the country."

The BG Board is in Egypt for a week of meetings with government and business representatives. The visit is aimed at underlining the company's confidence in Egypt's rapidly expanding oil and gas sector.

"Egypt is currently one of the world's most exciting energy success stories in the gas business today," Mr Giordano explained. "The overwhelming potential of its reserves - and the steps being taken to capitalise on this - will confirm Egypt as one of the leading international players in the petroleum sector, especially with the development of a gas export business. BG wants to play a part in that future, and to help further develop a stable and efficient business environment in which investors can flourish."

BG has enjoyed significant drilling successes in Egypt. Since 1997 it has drilled 17 exploration and appraisal wells in the Mediterranean Sea offshore the Nile Delta, 16 of which were successful. One well tested the highest gas flow rates on record in Egypt at 90 million standard cubic feet of gas a day.

BG's other interests include lead participation in the Nile Valley Gas Company. A 25-year agreement with the Egyptian government provides a franchise allowing BG to develop the gas market and infrastructure throughout Upper Egypt.

During the BG board's visit, Richard Giordano used its visit to announce a donation of over half a million Egyptian pounds to be used, in consultation with the Behayra Governorate, for the local community at Idku. This builds on an earlier donation of over one million Egyptian pounds made for medical equipment and training at a hospital in the region.

Notes to Editors

The Rosetta field entered commercial operation on 31 January 2001, producing gas via processing facilities at Idku into the Egyptian national grid. Gas is supplied to the Egyptian General Petroleum Corporation under a 25-year gas sales agreement signed in October 1997. Production is scheduled to rise to 275 million standard cubic feet of gas per day. Rosetta was developed by the Rashid Petroleum Company (Rashpetco), a joint venture operating company formed by the Egyptian General Petroleum Corporation (50%), BG Group (20%), Shell (20%) and Edison International (10%).

West Delta Deep Marine Concession: The Scarab/Saffron field is the first gas field development in deep water off the Nile Delta, and is the largest gas field development in Egypt. First gas production is expected in January 2003.

BG Group: BG Group, the international exploration and gas supply business, is active in around 20 countries. It has been active in Egypt since 1989, achieving major growth diversification and significant activities throughout the gas business. Apart from developing the Rosetta and Scarab/Saffron gas fields, these include playing a key role in the development of the gas market and pipeline infrastructure in Upper Egypt.