BG Group announced today that, following two additional appraisal wells, the estimated recoverable reserves on the Buzzard oil discovery have significantly increased from 200-300 million barrels to in excess of 400 million barrels.

The Buzzard oil discovery lies in the PanCanadian operated licence P986, 100 kilometres northeast of Aberdeen, in the UK North Sea. The 20/6-4 appraisal well is located 2.1 kilometres north of the original discovery well, drilled in the summer of 2001, and encountered a similar pay section as the discovery well. Following a test program that is currently underway, the well will be sidetracked to obtain further information on the quality and extent of the reservoir.

BG Executive Vice-President Jon Wormley said:

"This new data is extremely encouraging and provides a further indication that Buzzard represents one of the largest discoveries in the UK North Sea for some 10 years. The intensive appraisal programme continues with an anticipated three further wells and, where appropriate, associated sidetracks during 2002."

The Buzzard 19/10-1 appraisal well and sidetrack well was also drilled, 2.9 kilometres west of the original discovery well, successfully delineating the western limit of the southern portion of the Buzzard accumulation.

Notes to Editors

The original "Buzzard" discovery well was drilled in 320 feet of water. During testing, the well flowed at 6,547 barrels per day of light oil and 0.97 million cubic feet per day of natural gas on a 36/64th-inch choke. These rates were constrained by the limits of the testing equipment.

BG Group holds a 19.99% interest in the licence. Other interest-holders are PanCanadian, the operator, (45.01%), Intrepid Energy North Sea Ltd (30%) and Edinburgh Oil and Gas (5%).

BG Group is a significant holder of hydrocarbon reserves on the UK Continental Shelf, where it operates the Blake, Armada and Easington Catchment Area fields. The company is also involved in gas and oil developments in some 20 countries worldwide