BG Group plc has announced today that it has agreed to sell its entire shareholding in BG Rimi S.p.A., to CPL Concordia Soc. Coop. ARL of Modena for 34 billion lire (£10.98 million).

BG Rimi's assets include nine exploration permits and 18 production concessions. In 2000 it had a net production of 72 million cubic metres of gas. BG is retaining 12 exploration licences in the Po Valley, northern Italy and the Sicily Channel, southern Italy, and these have been transferred to BG Italia S.p.A.

Yvonne Barton, President, BG Italia S.p.A., said: "This sale is part of BG Group's strategy of disposing of non-core assets. We have rationalised our exploration and production presence in Italy to concentrate our activities on larger exploration prospects in the Po Valley and the Sicily Channel. Our commitment to the Italian energy market is further supported by our Serene power generation activities and our plans to develop the Brindisi liquefied natural gas project."

Roberto Casari, President, CPL Concordia S.p.A., said: "This important acquisition is in line with CPL Concordia's strategy to be involved in the whole gas chain in Italy, following liberalisation of the Italian gas market. CPL Concordia will increase the gas supply of its subsidiary Energia della Concordia with the acquisition of BG Rimi. This additional gas will be sold in the national market to consumers of over 200,000 cubic metres per annum. Furthermore, this supply will be increased through gas import contracts currently being developed for an approximate amount of two billion metres per year."

The sale is expected to be completed at the end of November 2001 and is payable in cash.

Notes to Editors

BG Group plc has been active in Italy since 1992 operating as BG Italia S.p.A., and BG Rimi S.p.A. Following this transaction, all operations will be carried out through BG Italia S.p.A.

With partners ENI and Edison, BG Italia is involved in a major exploration programme in Po Valley and the Sicily Channel. It is also a partner in Serene S.p.A., a joint venture company, which owns and operates 400 megawatts of co-generation units located in five sites adjacent to Fiat Auto factories.

BG Italia is promoting a US$300 million liquefied natural gas (LNG) importation terminal in Brindisi on the south east coast of Italy. It is envisaged that a first train, of four billion cubic metres of gas, could be imported into the Italian market from 2006. A decision on approval of the project is expected in due course.

CPL Concordia Soc. Coop. ARL is an Italian cooperative company incorporated in 1899. It has a projected turnover of some 400 billion lire in 2001. It is active in the Italian energy sector including gas marketing and gas transportation and employs 850 people. The company also has international presence in the energy sector in several other countries including France, Romania, China and Argentina.