BG Group made significant advances in its key projects in Australia, Brazil and the USA in 2010. The Group also extended its excellent track record in exploration, with a 12% increase in total reserves and resources to reach 16.2 billion barrels of oil equivalent (boe).
E&P Performance highlights
- BG Group announced a 34% upgrade to estimates of gross resources in the Lula, Cernambi and Guará fields in Brazil.
- 13 floating production, storage and offloading (FPSO) vessels being committed to fields in Brazil.
- BG Group took the final investment decision for the first phase of the Queensland Curtis LNG (QCLNG) Project in Australia.
- Total gross resources in Australia of 21 trillion cubic feet (tcf), with 8 tcf of proved plus probable (2P) reserves.
- Acquisition of significant additional US shale gas acreage.
- Total reserves and resources in the USA reached 8.5 tcf.
- Significant gas discoveries from two exploration wells drilled in Tanzania.
- First well drilled offshore China discovered gas.
- BG Group total reserves and resources increased by 12% to 16.2 billion boe.
Production, total reserves and resources
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(a) For an explanation of these terms, refer to Annual Report page 132.
(b) BG Group adopted the SEC definition of probable reserves in 2009.
(c) Discovered resources were previously called unbooked resources until 2009. |
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PRODUCING COUNTRIES (In order of production volumes) |
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| Egypt |
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 2010 net production 54.1 million barrels of oil equivalent (mmboe). - Operatorship of two gas-producing areas offshore the Nile Delta – Rosetta and West Delta Deep Marine (WDDM) concessions.
- BG Group is responsible for over 35% of all gas produced in Egypt.
2010 key events
- WDDM Phase VII pipeline completed.
- Phase VIIIa first phase of drilling completed.
- Phase VIIIb front-end engineering and design completed.
- 3D seismic data across North Gamasa concession acquired in 2010.
Outlook
- El Manzala offshore and El Burg offshore drilling programme expected in 2011.
 2010 net production 49.0 mmboe.- BG Group has extensive interests focused in the UK’s central North Sea, including a number of production hubs, exploration and appraisal interests and equity in pipeline and processing facilities.
2010 key events
- Approval for the first-phase development of the Jasmine discovery (BG Group 30.5%) in the central North Sea.
- BG Group interests in the Everest and Lomond fields increased to 99.13% and 100% respectively (completed in February 2011).
- Approval of the Gaupe (BG Group 60%) and North West Seymour
(BG Group 57%) projects. Gaupe is a Norwegian two-well subsea development. Both will be tied back to the Armada platform.
- Buzzard (BG Group 21.73%) enhancement project continued, with a new platform installed in 2010 and with start-up due to be completed in 2011.
Outlook
- First production from the Gaupe and North West Seymour projects expected in 2011.
- First production from the Jasmine development anticipated in 2012, and from West Franklin Phase 2 in 2013.
- Results from the latest appraisal well on Jackdaw (BG Group 44.1%) are expected in 2011, with first production targeted for 2016.
- BG Group expects to drill the White Bear gas condensate prospect in 2011.
- Following a fire in January 2010, the Erskine platform has been shut down for repair. It is expected to restart in the first quarter of 2011.
 2010 net production 37.8 mmboe. - BG Group is joint operator of the super-giant Karachaganak oil and gas condensate field (BG Group 32.5%).
2010 key events
- Phase 2M project ongoing to maintain current production plateau.
- Production was reduced due to the scheduled biennial maintenance shutdown of Karachaganak.
- Ongoing discussions with government regarding various matters including taxation and cost recovery. See Principal risks and uncertainties on page 34 and note 25(E) on page 123 of the Annual Report in relation to legal proceedings.
- The expansion of the Caspian Pipeline Consortium (CPC) pipeline
(BG Group 2%), a key export route for production from Karachaganak, received final investment decision approval. Expansion will increase export capacity through the CPC pipeline from 28 million tonnes per annum (mtpa) currently to 67 mtpa over three phases, with completion anticipated in 2015.
Outlook
- Fourth stabilisation train project anticipated to be onstream in 2011. Expected to increase western export volumes to more than 10 mtpa.
- Incremental Phase 2M projects to extend current production plateau expected to commence.
- 2010 net production 30.2 mmboe.
- Currently producing fields in three concessions – Central Block, East Coast Marine Area (ECMA) and North Coast Marine Area.
2010 key events
- Completion of drilling programme of six wells on Poinsettia field. All six wells are on production.
- Ongoing evaluation of data from the three successful Block 5(c) exploration wells.
- Governments of Trinidad and Tobago and Venezuela ratified the field-specific treaty for the cross border Loran-Manatee field in the ECMA, providing a framework for advancing a field development plan by the partners.
Outlook
- First gas planned in 2012 for Baraka and Baraka East discoveries in the Central Block.
- Appraisal drilling programme proposed to commence in 2012 for
Block 5(c), subject to partner agreement.
- 2010 net production 16.0 mmboe.
- Operator of the Miskar field (BG Group 100%) and Hasdrubal field (BG Group 50%).
- Operator and joint permit holder of the Amilcar exploration permit, offshore Sfax.
- Tunisia’s largest gas producer.
2010 key events
- Hasdrubal started at the end of 2009 and has seen production ramping up through 2010. In the third quarter, the gas processing facility was shut down for design modifications and is anticipated to restart in the first quarter of 2011.
- Successfully drilled Miskar A19 development well.
Outlook
- Hasdrubal to ramp up production to 34 000 barrels of oil equivalent per day (boed) gross.
- 2010 net production 11.6 mmboe.
- BG Group partners with EXCO Resources, Inc. (“EXCO”) to develop shale gas in east Texas/north Louisiana (Haynesville, Cotton Valley and Bossier) and Pennsylvania/West Virginia (Marcellus).
- The joint venture has complementary gas infrastructure in place in the Haynesville.
- BG Group’s total reserves and resources 8.5 trillion cubic feet (tcf) as of February 2011.
2010 key events
- In 2010, BG Group entered further joint venture arrangements with EXCO to expand its prospective acreage in the Marcellus, Haynesville, Cotton Valley and Bossier, including shallow producing wells in the Marcellus.
- At the end of 2010, BG Group had extensive shale acreage in the USA with 23 rigs in operation.
- Net production increased 300% during the year, with many wells achieving initial flow rates of more than 20 million cubic feet per day.
Outlook
- Production anticipated to ramp-up to 190 000 boed by 2015.
- Pursuing additional long-term pipeline capacity to support growth in gas production.
 2010 net production 11.2 mmboe. - 30% interest in Mid and South Tapti gas fields and Panna/Mukta oil and gas fields, 45% interest in one block in the Krishna Godavari Basin and a 25% participating interest in the MN-DWN-2002/2 block.
2010 key events
- Three development wells completed in Mid and South Tapti.
- Exploration block KG-DWN-2009/1 (BG Group 30% and operator) awarded in the Krishna Godavari basin.
- In July, the Panna platform (SPM) suffered damage to a subsea hose and the field was shut in. Production resumed in October.
Outlook
- Panna L first production anticipated in 2011.
- Additional infill drilling in Mid and South Tapti possible in 2011, plus potential appraisal well to be drilled.
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India |
- 2010 net production 9.8 mmboe.
- 22.22% interest in the Bongkot field.
- Operator of Blocks 7, 8 and 9 (66.67% interest).
2010 key events
- Completion of phase 3G of Bongkot North (“GBN”) development. Three new wellhead platforms, installed as part of phase 3H, due onstream in 2011.
- Programme of exploration drilling was completed, with three wells discovering resources for further phases of development.
- Work continued on the Bongkot South (“GBS”) project, which is expected to develop a further 1 tcf of gross reserves and resources.
Outlook
- Phase 3J of GBN (two further wellhead platforms) is underway and expected onstream in 2012.
- Further exploration and delineation drilling is planned to enable approval of phase 3K of GBN development during 2011.
- The GBS project will continue, targeting first gas sales early in 2012.
- 2010 net production 7.7 mmboe.
- Exploration and development of onshore coal seam gas (CSG) acreage in the Surat and Bowen basins.
- BG Group supplies about 20% of the State of Queensland’s gas demand.
- BG Group owns interests in onshore concessions covering more than
31 000 square kilometres.
- Total gross resources in Australia of 21 tcf, with 8 tcf of proved plus probable (2P) reserves.
2010 key events
- Ongoing progress with upstream appraisal, field development planning, engineering and procurement activities.
- Drilled over 120 appraisal wells, around 50 development wells and 5 operated exploration wells in 2010.
- Final notices to proceed issued to contractors for gas field facilities and infrastructure development and for the transmission pipeline network.
- BG Group entered a gas storage agreement with AGL Energy Limited which gives the Group additional flexibility to manage CSG produced in the ramp-up phase of the QCLNG Project.
Outlook
- Approximately 2 000 wells expected to be drilled by 2014, with 6 000 over the life of the two-train LNG plant on Curtis Island.
- Around 25 exploration wells planned to be drilled in the Bowen basin in 2011.
- 2010 net production 6.3 mmboe.
- BG Group is 100% operator of the La Vertiente block containing three fields.
- Consortium member of the Caipipendi (37.5%, containing the Margarita field), Charagua (20%, being divested) and XX Tarija West (25%, containing the Itaú field) blocks.
- BG Group supplies gas and associated liquids to the Bolivian domestic market and gas to Brazilian and Argentine markets.
2010 key events
- In early 2010, an amendment to the gas sales agreement between the Argentine national oil company, Energía Argentina S.A., and the Bolivian national oil company, Yacimientos Petrolíferos Fiscales Bolivianos (“YPFB”), confirmed an increase in the supply of gas from Bolivia to Argentina.
- Margarita phase 1 development sanctioned and development underway.
- Congressional approval for the Petroleo Brasileiro S.A. (“Petrobras”) and Empresa Petrolera YPFB Chaco S.A. (a YPFB subsidiary) farm-ins into Itaú was granted in December 2010.
- Itaú Phases 1 and 2 development sanctioned, with first gas from Phase 1 in February 2011.
Outlook
- First gas from Margarita expected 2012.
 2010 net production 1.6 mmboe. - BG Group holds significant acreage positions with interests in five offshore blocks in the Santos Basin.
2010 key events
- BG Group announced a 34% upgrade to estimates of gross resources for the Lula, Cernambi (formerly Tupi and Iracema respectively) and Guará fields to 10.8 billion boe, from 8.1 billion boe.
- After the drilling of 11 wells on Lula and Cernambi and the extended well test (EWT) on Lula, BG Group’s partner Petrobras filed a Declaration of Commerciality for the accumulations of light oil and gas in the Lula and Cernambi fields.
- Initial EWT on Guará commenced.
- Production from the first permanent facility on the Lula field commenced in October 2010.
Outlook
- BG Group is progressing the contracting of a further 12 FPSOs; two due onstream in 2013, eight FPSO hulls ordered and two FPSOs currently under tender. These are due to come onstream progressively over the next seven years, to yield a total scheduled production capacity of approximately 2.3 million boed.
- The Group estimates that net production from Brazil will support over
550 000 boed by 2020, with further upside potential.
- EWT on Carioca and Iara prospects planned for 2011 and 2012 respectively.
DISCOVERIES AND EXPLORATION ACREAGE: next page |