As previously announced, first oil was produced from Karachaganak for CPC export on 15 July 2003. During the sequential start-up of the Karachaganak Phase Two facilities, product entering the export system has become contaminated with caustic soda. This has temporarily delayed sales of oil through the CPC pipeline, which are now expected during the fourth quarter. This has no material impact on the project, and BG still expects to be within 2% of its 2003 production target. BG's 2003 volume targets, which were set in 1999, required the completion of 21 major projects, of which Karachaganak is the last.

Notes to Editors

First gas reinjection into the Karachaganak reservoir took place on 2 July 2003, and first production from the new facilities entered the connecting pipeline to Atyrau on 15 July 2003. On completion of the new facilities, the field will be capable of producing more than 10 mtpa of liquids (200,000 bopd) and up to 7 bcma of sales gas (700 mmscfd). Further phases of development are expected to follow, to increase liquids production, subject to the development of a market for the substantial additional gas volumes that would be produced.

BG Group's 2003 Exploration and Production volume target, which was set in 1999, is 440,000 barrels of oil/day (160.6 million barrels of oil equivalent). In 2002, the total production achieved was 136 million barrels of oil equivalent.