In 2011, exploration highlights included appraisal drilling in Brazil, another discovery in Tanzania, a large acreage acquisition in Kenya and discoveries in the UK and Norway.

“In 2011, exploration and appraisal activity added 1 billion boe to our resource base, bringing resource additions over the last 10 years to 10 billion boe.”
Sir Frank Chapman
Chief Executive

E&P Performance highlights

• A further 1 billion boe added to total resources.
• A material upgrade of BG Group’s reserves and resources in Brazil, with a mean estimate of total reserves and resources now standing at some 6 billion boe net**.
• 13 FPSOs now committed in Brazil and due onstream by 2017, with an aggregate production capacity of some 2.3 million boed.
• Accepted delivery of the Windsor Knutsen, the world’s largest shuttle tanker. Four further shuttle tankers have been contracted for 2013-2014.
• Third gas discovery made in Tanzania, with second drilling campaign commenced in early 2012.
• Ongoing progress in Australia with upstream appraisal, field development planning, engineering and procurement activities.
• Acquisition of additional US shale acreage.

* For a reconciliation between business performance and total results, see Annual Report note 1 and note 8.

** BG Group view of total resources, not the Operator or relevant Consortium view.

Floating Production Storage and Offloading (FPSO) vessels

FPSOs are floating vessels used for the production, processing, storage and offloading of oil located offshore onto tankers. They can also process gas. Source: Information supplied by Petrobras

• 2011 net production 49.4 mmboe.
• Operatorship of two gas-producing areas offshore the Nile Delta – Rosetta and West Delta Deep Marine (WDDM) concessions.
• Operatorship of three other concessions offshore the Nile Delta – El Manzala Offshore, El Burg Offshore and North Gamasa Offshore.

2011 key events

• WDDM Phase 7 gas pipeline onstream.
• WDDM Phase 8a onstream.
• WDDM Phase 8b sanctioned.
• El Manzala Offshore exploration well drilled but not successful.
• Analysis of North Gamasa offshore 3D seismic acquired in 2010.
• Production activities continued despite civil unrest in Egypt causing disruption to normal patterns of gas supply.

Outlook

• Two El Burg offshore exploration wells expected in 2012, including key Notus prospect in new Oligocene play.
• First gas expected from WDDM Phase 8b in 2012.
  

Further information:
	Egypt operations

• 2011 net production 38.2 mmboe.
• Extensive interests focused in the UK’s central North Sea, including a number of production hubs – Armada, Everest and Lomond – exploration and appraisal interests and equity in pipeline and processing facilities. Non-operated ventures include Buzzard, Elgin/Franklin and J-Block.

2011 key events

• Extended shutdowns for safety-based elective maintenance, third-party infrastructure restrictions and plant commissioning activities all impacted production volumes.
• Buzzard (BG Group 21.73%) enhancement project completed, with the commissioning and start-up of the new production sweetening platform.
• Work ongoing on the development of the Jasmine field (BG Group 30.5%).
• Jacket for the West Franklin development installed and two of the three wells on the development drilled.
• Appraisal well drilled on Jackdaw discovery.
• BG Group increased its interest in the Central Area Transmission System (CATS) pipeline and terminal to 62.42%.
• First production from the North West Seymour project commenced in October 2011.

Outlook

• First production from the Gaupe project (in Norwegian waters) (BG Group 60%) expected in 2012. The delay of Gaupe production from 2011 was the result of severe weather significantly delaying the pipeline installation vessel that is being used to install the pipelines from the Gaupe wells to the Armada platform.
• First production from the East Everest Expansion project (BG Group 99.1%) due onstream late 2012.
• BG Group expects to drill the White Bear gas condensate prospect in 2012.
• Up to nine development wells planned for Phase 1 on Jasmine field – expected onstream in 2012.
• Jackdaw first production targeted for 2017.

Further information:
	UK Upstream operations

• 2011 net production 37.4 mmboe.
• Joint operator of the super-giant Karachaganak oil and gas condensate field (BG Group 32.5%), one of the largest condensate fields in the world.

2011 key events

• Various outstanding matters with the government settled (subject to conditions precedent being satisfied).
• Fourth liquids stabilisation train commenced operation, increasing stabilisation capacity to Western markets to over 10 mtpa.
• Expansion of the Caspian Pipeline Consortium (CPC) pipeline (BG Group 2%), a key export route for production from Karachaganak, received final investment decision approval.

Outlook

• Incremental projects to extend current production plateau.
• Upon conditions precedent being satisfied in relation to the settlement of outstanding matters with the government (expected on or before 30 June 2012), BG Group’s interest in the Karachaganak project will reduce to 29.25% from the current 32.5%.
  

Further information:
	Kazakhstan operations

• 2011 net production 27.4 mmboe.
• Three concessions with fields currently producing – Central Block, East Coast Marine Area (ECMA) and North Coast Marine Area (NCMA).

2011 key events

• DoC made for block 5(c).
• Baraka and Baraka East tie-in and compression (BTIC project) in Central Block.
• NCMA Phase 4a compression project for the Hibiscus platform – front-end engineering and design stage commenced.

Outlook

• First gas expected in 2012 for Baraka and Baraka East discoveries in the Central Block.
• Appraisal drilling programme proposed to commence in 2013 for block 5(c), subject to partner agreement.

Further information:
	Trinidad and Tobago operations

• 2011 net production 26.7 mmboe.
• BG Group and exploration partner EXCO Resources, Inc. (EXCO) develop shale gas in east Texas/North Louisiana (Haynesville, Cotton Valley and Bossier) and Pennsylvania/West Virginia (Marcellus).

2011 key events

• Acquired additional, highly prospective Marcellus shale properties in partnership with EXCO.
• BG Group and partners operated 26 rigs and drilled 211 wells.

Outlook

• Ongoing high-grading of core Haynesville acreage through appropriate acreage acquisition and disposal.
• Due to current weak US gas prices, rig-count in 2012 expected to fall from 35 to around 8. The Group’s forward plans currently assume about 80 000 boed production from US shale gas in 2015, some 110 000 boed less than the 2011 plan.

Further information:
	USA operations

• 2011 net production 14.6 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 in the Gulf of Gabes.
• Largest gas producer in Tunisia, supplying over 60% of Tunisia’s domestic gas production.

2011 key events

• Hasdrubal ramp-up to full production.
• Opening of two 6-inch 130 kilometre parallel pipelines delivering LPG from Hasdrubal to the BG Group-owned LPG storage terminal in Gabès.
• Applied for one-year extension for the Amilcar exploration permit.
• Production was held back as civil unrest in the first quarter caused a delay to the restart of the Hasdrubal plant, following planned maintenance, and there was additional unplanned maintenance in the fourth quarter.

Outlook

• Ongoing well intervention campaign on Miskar field.

Further information:
	Tunisia operations

• 2011 net production 11.2 mmboe.
• 30% interest in Mid and South Tapti gas fields and Panna/Mukta oil and gas fields.
• 30% interest in block KG-DWN-2009/1 in the Krishna Godavari Basin.

2011 key events

• Panna L installed.
• A consortium, including BG Group (50% and operator), identified as the qualifying bidder for an exploration block (MB-DWN-2010/1), offshore the west coast.
• BG Group exited block KG-OSN-2004/1 in the Krishna Godavari Basin (45% interest) and block MN-DWN-2002/02 in the Mahanadi Basin (25% interest).

Outlook

• BG Group and its partners have secured a rig for 2012-2013 and are in the process of planning a drilling campaign for the Panna/Mukta and Tapti fields.
• Award of exploration licence for block MB-DWN-2010/1, subject to government and regulatory approvals.

Further information:
	India

• 2011 net production 9.9 mmboe.
• 22.22% interest in the Bongkot field. The field supplies approximately 15% of Thailand’s gas demand.
• Operator of blocks 7, 8 and 9 (66.67% interest).

2011 key events

• Completion of phase 3H of Bongkot North (GBN) development, contributing new production from two wellhead platforms in 2011 and the third in early 2012.
• Work continued on the Bongkot South (GBS) project, which is expected to develop a further 1 tcf of gross reserves and resources.

Outlook

• GBS first gas expected Q2 2012.
• Phase 3J of GBN (two further wellhead platforms) underway and now expected onstream in late 2012 or early 2013.
• Further exploration and delineation drilling planned to enable approval of phase 3L of GBN development during 2012.

Further information:
	Thailand operations

• 2011 net production 7.6 mmboe.
• Exploration and development of onshore CSG acreage in the Surat and Bowen basins.
• Exploring shale gas potential in the Cooper basin.
• Exploring deep gas sands potential in the south of the Bowen basin.
• Total gross resources in Australia of more than 25 tcf.
• BG Group supplies the equivalent of about 20% of the State of Queensland’s gas demand.

2011 key events

• Drilling progress impacted by extensive flooding in Queensland in December 2010 and January 2011.
• Ongoing progress with upstream appraisal, field development planning, engineering and procurement activities.
• Construction of two field compression stations commenced. QGC’s first plant to treat produced CSG water is now operating. Almost 190 kilometres of the 540-kilometre pipeline route was prepared and nearly 150 kilometres of pipe was ready for welding and burial.
• A total of 184 wells drilled in the Surat and Bowen basins: 76 appraisal wells, 94 development wells and 14 exploration wells. In addition, two deep (tight gas) exploration wells also drilled.
• Produced gas from over 200 CSG wells.

Outlook

• Approximately 2 000 wells expected to be drilled by 2014, with 6 000 over the life of the project.
• In 2012, 11 drilling rigs and up to 12 completion rigs are expected to be in operation.
• Production anticipated to increase to some 215 000 boed when the two LNG trains are onstream.

Further information:
	Australia operations

• 2011 net production 6.8 mmboe.
• BG Group is 100% operator of the La Vertiente block (three fields), XX Tarija East (two fields) and Los Suris (one field).
• Consortium member of the Caipipendi (37.5% interest, containing the Margarita field), Charagua (20% interest, in the process of being relinquished) and XX Tarija West (25% interest containing the Itaú field) blocks.

2011 key events

• Itaú Phase 1 in the XX Tarija West block came onstream and Phase 2 received government approval.
• Margarita Phase 2 and Itaú Phase 2 sanctioned.
• Successful intervention of the well Margarita 4 in Caipipendi Block.
• Three wells drilled in XX Tarija East – one in the Palo Marcado field and two in Ibibobo.

Outlook

• First gas from Margarita Phase 1 expected 2012.
• First gas from Itaú Phase 2 expected 2013.
• Margarita Phase 2 expected onstream in 2014.

Further information:
	Bolivia operations

• 
• 2011 net production 4.9 mmboe.
• BG Group holds significant acreage positions with interests in five offshore blocks in the Santos Basin.

2011 key events

• 11 exploration and appraisal wells drilled and two EWTs.
• Material upgrade to BG Group interests, with mean estimate of total reserves and resources increasing to some 6 billion boe (net) to the Group, with an upside potential of 8 billion boe (net)*.
• Additional producer wells on the Lula field.
• Submission of DoC for Guará (renamed Sapinhoá) field.
• EWT on Carioca increased production potential to approximately 28 000 bopd.
• Completion of drilling and DST on Iara.
• Successful DST on the Sapinhoá Norte well on block BM-S-9.
• Lula-Mexilhão gas pipeline brought onstream.
• Letters of intent signed for FPSOs 4 and 5.

Outlook

• 13 FPSOs due onstream by 2017, with anticipated aggregate production capacity of some 2.3 million boed.
• First Lula FPSO ramping up to production plateau of around 100 000 bopd (130 000 boed).
• FPSOs 2 and 3 expected onstream in 2013 on Saphinoá and Lula North East respectively.
• Estimate that net production from Brazil will be over 600 000 boed by 2020.**

* BG Group view, not the Operator or relevant Consortium view.
** BG Group view of future production volumes of total resources at 2012 reference conditions, not the Operator or relevant Consortium view.

Further information:
	Brazil operations

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