BG Group plc announces that the pre-emption process for interests in the North Caspian Sea Production Sharing Agreement (PSA) has been completed.

The Group's shareholding in the PSA, which includes the Kashagan discovery, increases from 14.29 per cent to 16.67 per cent. The pre-emption process was started after BP and Statoil notified their intention to dispose of their interests in 2001.

David McManus, Executive Vice President, BG Group plc, said: "Positive results from the recent appraisal drilling on Kashagan and the continuing appraisal programme scheduled this year adds value to BG Group's investment in the North Caspian Sea."

Notes to Editors

The North Caspian Sea PSA covers 5,600 square kilometres of the Kazakhstan sector of the Caspian Sea. It is operated by ENI-Agip, with the other members of the consortium comprising BG Group, Exxon Mobil, Shell, TotalFinaElf, Phillips and Inpex.

The first exploration well, Kashagan East-1, was announced as a discovery on June 30 2000. Two wells, Kashagan West-1 and Kashagan East-2, were tested successfully in April 2001 and October 2001, respectively. An appraisal programme, agreed by the Kazakhstan authorities, is currently underway, and up to five wells may be drilled by 2003.

BG Group's business is gas and oil exploration, and the development and supply of international gas markets. It is active in some 20 countries, including the UK, Bolivia, Trinidad, Egypt and India. In Kazakhstan, in addition to its North Caspian interests, it is joint operator (32.5%) of the Karachaganak oil and condensate field, and is a shareholder in the Caspian Pipeline Consortium (CPC) whose pipeline links reserves in western Kazakhstan to the Black Sea and export to world markets.