BG Group - creating value through exploration Malcolm Brown Senior Vice President, Exploration 21 June 2012 Deepsea Stavanger drill rig Tanzania Credit: Odfjell drilling
Introduction Agenda Introduction BG Group a successful explorer Portfolio diversity provides opportunities Levers for success Q&A 3
Introduction Summary BG Group has delivered ten years of industry leading exploration Added 10bn boe in 9 years, including ca 1bn boe of resources in 2011 Continuing robust proved reserves replacement Well-balanced portfolio, with…
Introduction BG Group strategy Global Gas Major Connect gas to Secure competitively high-value markets priced resources Build & access markets Equity reserves Serve customers Contracted resources Skills to succeed across the…
BG Group a successful explorer 6
BG Group a successful explorer A global leader in exploration Value creation, bn IRR Reserve replacement ratio Majors Majors Majors Sustained, top Source: Wood Mackenzie, quartile analysis is based on thevalue creation period…
BG Group a successful explorer Track record: organic adds of 14bn boe BG Group BG Groups giant discoveries (500 mmboe) 15 in 15 years Operated Kalamkas Lula Carioca Sapinho Kazakhstan Jodari Brazil Brazil Brazil Simian Kashagan…
BG Group a successful explorer Top quartile E&P benchmarking 3 year unit F&D cost (/boe) Annual unit opex cost (/boe) BG 2009-2011 BG 2011 BG 2008-2010 BG 2010 Peer 2008-2010 Peer 2010 Source (2008-2010): Evaluate Energy…
BG Group a successful explorer Total reserves & resources Total reserves & resources (mmboe) CAGR 14% Total reserves & resources/ 17130 production* 16180 14494 73 years 13126 10046 57 years 31 years 14 years SEC…
BG Group a successful explorer Reserves replacement BG Groups reserves replacement 3 year reserves replacement 1 year total 251% proved RRR 3 year total 212% proved RRR BG 2009-2011 (1) BG 2009-2011 (2) Peer 2008-2010 1…
Portfolio diversity 12
Portfolio diversity Well-balanced portfolio LNG OiI Near infrastructure gas and liquids Tanzania 2 Train Brazil UK LNG Uruguay Norway Australia QCLNG Madagascar India Train 3 West India Thailand Longer term refill of…
Portfolio diversity Prospect inventory Norway Other Trinidad Grown by 12% pa over last 10 years UK Australia Thailand Net risked resources of 3.8 bn boe Egypt 75% operated by BG Group China Total gross unrisked resources 40…
Portfolio diversity Exploration: ongoing activity UK - HPHT Jackdaw appraisal, White Bear, Thunderer to drill 2012 EGYPT Notus, Harmattan Deep and Sceptre CHINA wells Seismic, wells to follow USA Marcellus INDIA KENYA…
Portfolio diversity New opportunities in Egypt BG Group interests High equity operated position BG Group Oligocene prospects & leads New potential in established Pliocene play El-Burg Offshore New Oligocene play Notus Oligocene…
Portfolio diversity Major new gas province: East Africa 31 000 sq km (155 UKCS blocks) Kenya Block L-10A Tanzania Two drilling campaigns - 5 out of 5 wells gas Block L-10B discoveries Proven Tertiary and Cretaceous plays…
Portfolio diversity Tanzania: multiple play types Two delta systems Chewa-1 Rufiji in north Pweza-1 Rovuma in south Block 4 5 exploration wells drilled, 5 discoveries Block 3 Jodari - significant Tertiary discovery Mzia-1 2.2…
Portfolio diversity Tanzania seismic 19
Portfolio diversity Kenya Block L10a seismic Shallow Tertiary Gas escape feature channels W E Deepwater sands stacked in roll-over structures Deepwater sands draped over structural high Base Tertiary BG Group 40%…
Portfolio diversity Multiple exploration plays in Australia Surat CSG: E&A to increase resources Mackay 1.2 tcf net risked exploration Exploring CSG in Bowen Cooper Basin Bowen CSG 4.7 tcf net risked exploration Existing…
Portfolio diversity Australia: Bowen deep gas sands N S Deep tight gas sand play 000 metres Potential for QCLNG Supply QCLNG 2.3 tcf net risked exploration Expansion Train 1 & 2 Under Surat Basin development, 0 adjacent to…
Portfolio diversity Uruguay: new frontier exploration play BG Group provisionally awarded Blocks 8, 9, 13 in 2012 licence round Large contiguous acreage position 13 000 sq km Cretaceous fan play, analogous to Guyana discoveries…
Portfolio diversity UK: high value prospectivity BG Group has inventory of significant HPHT & normally pressured prospects and discoveries Tie-back to existing infrastructure in Central North Sea, or create new hubs Jackdaw…
Levers for success 25
Levers for success Levers for success Why has BG Group been a successful explorer Consistency of: People Process Leadership Agility Technology 26
Levers for success People Consistency of: People Process Leadership Successful graduate programme now in 20th year Now in senior technical and management positions 90% retention rate over 10 years 50% of G&G staff non-UK…
Levers for success Portfolio, budget and capital allocation Seismic Characterisation Exploration is run centrally Seismic 3D Structural Trap Trap GRV Configuration & and Interpretation Framework & Prospect Properties Segmentation…
Levers for success Agility: East Africa in action TANZANIA PWEZA CHEWA CHAZA JODARI MZIA Farm-in to Blocks 1, 3, 4 1st drilling campaign 2nd drilling campaign 3D 3D 2010 2011 2012 KENYA 3D Signed Wells to L10 A & B PSC…
Levers for success Future of technology in BG Group Brazil R&D investments 1% gross revenue Engine for delivery of Group-wide technology value Rio de Janeiro Federal University campus hosts a number of companies 30
Levers for success BG Group technology hubs Existing Building Water Onshore Management Logistics CSG Safety and Applied Carbonate Technology Asset Integrity HPHT Improved and development enhanced recovery Carbon…
Key messages 32
Key messages Summary BG Group has delivered ten years of industry leading exploration Added 10bn boe in 9 years, including ca 1bn boe of resources in 2011 Continuing robust proved reserves replacement Well-balanced portfolio, with…
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