BG Group Corporate Responsibility Mark Carne Executive Vice President & Managing Director, Europe & Central Asia Goldman Sachs 28 September 2007
Corporate responsibility Introduction Brief introduction to BG Group How we talk about Corporate Responsibility 2006 performance Challenges 3
Corporate responsibility Integrated Gas Major Integrated Gas Major Connect gas to Secure low cost high value markets resources Build & access markets Equity reserves Serve customers Contracted resources Skills to succeed…
Corporate responsibility Gas market focus UK / Europe Middle North Focus East / America Caspian Focus Atlantic India supply focus Long term growth Bolivia/ Brazil Long term growth Developed Market Developing Market…
Corporate responsibility Countries of current operation Norway Canada UK Kazakhstan Italy Israel / PA USA Oman India Tunisia China Algeria Thailand Libya Philippines Trinidad & Tobago Malaysia Egypt Nigeria Bolivia Brazil…
Corporate responsibility Adding value to host economies 2006 2005 Total operating profit 3 103 m 2 389 m Taxes 1 375 m 939 m Capital investment excl. 1 847 m 1 595 m acquisitions Employees 4 665 3 988* FTE-employees, Joint Ventures 35…
Corporate responsibility Corporate Responsibility Working responsibly 8
Corporate responsibility Corporate Responsibility Responsible conduct Responsible to our people Integrity HSSE Governance Recruitment Strategy / investment Training & development Regulatory compliance Equality & diversity…
Corporate responsibility Responsible conduct Integrity Business Principles re-launched in 2006 Anti-corruption standard Human rights guidance Community relations toolbox Governance Corporate Responsibility Committee Governance &…
Corporate responsibility Responsible conduct: Examples Revenue transparency Kazakhstan EITI MOU to support Extractive Industries Transparency Initiative (EITI) : October 2005 World Bank collaboration: December 2006 BG Group support…
Corporate responsibility Responsible to our people: Safety LTIF HSE Management System & Directives 1997 8 Industry Climate Survey Tools 7 14 Point Profile Tool 6 5 Chairman s Awards 4 LTIF <IF 14 Point & 14 KPIs…
Corporate responsibility Responsible to our people: Asset integrity Baker Report Working Group analysis of existing / planned improvement work scoping of new activities to improve BG Group's management of Asset Integrity…
Corporate responsibility Responsible to our people: Safety in Kazakhstan Promoting safety culture LTI-free is a key performance metric Training both employees and contractors Road safety improvement plans Defensive driving program…
Corporate responsibility Responsible to our people: Working culture Diversity 17% senior managers non UK/US nationals; 48% of country management teams are locals; 9% are women 47% of UK 2007 graduate trainees are women 74% locals…
Corporate responsibility Responsible to society: Community relations Community relations Community relations tool box launched Q3 2006 Health / wellness programmes implemented Premier Power and Kazakhstan Human rights Support the…
Corporate responsibility Responsible to society: Social investment Social investment Devolved to country management teams 4.2m in voluntary contributions in 2006 (+16%) Investment in Kazakh education Sustainable development Use…
Corporate responsibility Environmentally responsible Gas focused (76% in 2006) Lower emissions than other fossil fuels Fuel substitution Gas for coal Compressed natural gas Cogeneration Enhanced Greenhouse Gas Management…
Corporate responsibility GHG emissions: Improving energy efficiency E&P Production LNG Liquefaction A growth company 000 boed - CAGR 15% 1997 - 2006 mtpa - CAGR 50% 1999 - 2006 589 600 6.7 Rate & nature of our business 504 7…
Corporate responsibility GHG emissions: Stabilisation options 7 WEDGES h r at la are needed to build P So ent ls the stabilisation urr fue triangle C ass m Bi o l ea r c Nu d Win tor age s ture& EACH WEDGE c ap ar…
Corporate responsibility Environmentally responsible: Performance ISO 14001 (2004) standard GHG emissions by unit of output 83% of assets certified 40 35 Independent review of 30 improvement opportunities 25 20 Emissions 15 10…
Corporate responsibility Environmentally responsible: Karachaganak Operations High pressure sour gas injection system employed Inject approx. 40% of the gas produced Almost zero emissions - 99.4% of gas used Well test flaring…
Corporate responsibility Conclusion Operating and investing responsibly to deliver shareholder value CR core to business throughout company Evidence of progress but challenges remain Leader in Goldman Sachs ESG sector index…
Appendix
Corporate responsibility 2006/2005 Results Group financial performance Full year Full year 2006 % yoy 2005 3 103 +30 Total operating profit (m) 2 389 (43) -34 Finance costs (m) (65) 1 678 +24 Earnings (m) 1 354 3 360 +34 Cash from…
Corporate responsibility Total operating profit m 3500 CAGR 39% 1997-2006 3,103 3000 2500 2,389 2000 1,520 1500 1,287 1000 833 888 688 500 330 160 229 0 1997 2000 2003 2006 E&P T&D, LNG, Power & Other Continuing…
Corporate responsibility Country entry example: Nigeria Nov 2004 Board early notice paper issues of corruption and violence highlighted Nov 2004-Feb 2005 Background due diligence work Doing ethical business OK site environmental and…
Corporate responsibility Case study: Chair of Environmental Technology The research work of the Chair looks to develop integrated methods of water and land resources management within the Aral basin and the Nura River. Projects to date…
Corporate responsibility Case study: Boarding school for disabled children The main focus of BGs support is to enable children and teachers to gain skills and provide them with help in active engagement in sport and cultural events.…
Corporate responsibility 14 point assurance tool: overview Asset General Manager Asset Management (e.g. Drilling, Exploration, Production etc.) Required fit for Management System purpose HSSE controls Gap Analysis Compliance…
Corporate responsibility Legal Notice Cautionary Note to US investors The United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a…
Corporate responsibility Key assumptions REFERENCE CONDITIONS Brent Oil price US40/bbl US Henry Hub 6/mmBtu US/UK exchange rates of 1.80:1 UKCS upstream tax 40% 2003-05; 50% 2006 forward Prepared under International Financial…