BG India signs Production Sharing Contract for Krishna

BG India signs Production Sharing Contract for Krishna - Godavari (KG) Basin Block
Stock Exchange Announcement	2 March 2007

BG Exploration and Production India Limited (BGEPIL) and Oil and Natural Gas Corporation Limited (ONGC) today signed a Production Sharing Contract (PSC) with the Government of India for Block KG-OSN-2004/1, which was awarded in the recent NELP VI licensing round.

BGEPIL has a 45 percent interest in the block along with partner ONGC, which holds a 55 percent interest and operatorship.

Managing Director, BG India, William Adamson said, “This award adds to our current portfolio of upstream assets and marks the beginning of BG India’s diversification into a new and growing hydrocarbon region on the east coast. The Krishna Godavari Basin is an important gas province and, along with ONGC, we look forward to participating in its development.”

The shallow water block, which covers an area of approximately 1150 square kilometres, is located in the Krishna - Godavari basin off the east coast of India.

Notes to Editors:
BG India is part of BG Group plc, a global natural gas business with activities on five continents in 25 countries. BG Group operates four business segments worldwide - Exploration & Production, Liquefied Natural Gas, Transmission & Distribution and Power. BG India is responsible for managing and developing the upstream and downstream interests of BG Group in India. It is the largest investing foreign company in the Indian oil and gas sector having invested approximately US$900 million to date.

BG Exploration & Production India Limited (BGEPIL), has a 30% interest in the joint venture that jointly operates the offshore Panna/ Mukta and Tapti fields (PMT). BG Group has a 65.12% controlling stake in Gujarat Gas Company Limited (GGCL), India’s largest private natural gas distribution and transmission company, which supplies natural gas to industrial, commercial and domestic customers and CNG vehicles in the cities of Ankleshwar, Bharuch and Surat in south Gujarat. Mahanagar Gas Ltd (MGL) is an equal joint venture owned by BG and GAIL (49.75% equity stake each) that distributes natural gas and CNG in Mumbai, Thane and Mira-Bhayander.

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There are matters discussed in this media information that are forward looking statements. Such statements are only predictions and actual events or results may differ materially. For a discussion of important factors which could cause actual results to differ from the forward looking statements, refer to the Company’s annual report and accounts for the year ended 31 December 2005. The Company does not undertake any obligation to update publicly, or revise, forward looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.

Cautionary note to US investors - The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. In this announcement we use the term “undeveloped gas” and in Notes to Editors we use the term “indicated gross reserves” that the SEC's guidelines strictly prohibit us from including in filings with the SEC. US investors are urged to consider closely the disclosure in our Form 20-F, File No. 1-09337, available from us at BG Group, 100 Thames Valley Park Drive, Reading RG6 1PT. You may read and copy this information at the SEC's public reference room, located at 100 F Street NE, Room 1580, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. This filing is also avail able at the internet website maintained by SEC at http://www.sec.gov