BG Group Lehman Brothers - Leaders In Energy conference London, 24 May 2007 Securing a Competitive European Gas & Power Market Dr Stuart Fysh, EVP & MD Mediterranean Basin and Africa
BG Group Overview BG Group strategy UK & European gas markets Supplying the Atlantic Basin BG Groups LNG portfolio 3
Strategy 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 across the gas…
Strategy Gas market focus UK / Europe Middle North Focus East / America Caspian Focus Atlantic supply India focus Long term growth Bolivia/ Long term Brazil growth Developed Market Developing Market Supplies Connecting…
Strategy Countries of current operation Norway Canada UK Kazakhstan Italy Israel / PA USA Oman India Tunisia China Algeria Thailand Trinidad & Libya Philippines Tobago Malaysia Egypt Nigeria Bolivia Brazil Singapore…
European gas markets UK gas market Understand the UK market - 7% share Strong demand Firm long-term price environment BG Groups gas chain skills Upstream Interconnector Power Future prospects Dragon LNG UK hubs Norway…
European gas markets North Sea: Production BG net production 000s boepd 200 Production outlook improved Increases from existing assets 150 Jasmine onstream 2010 Jackdaw onstream 2012 100 Other planned discoveries 2010+ 50 Plateau…
European gas markets E&P: Norway Barents Sea Fifth largest acreage holder Mid-Norway 23 licences, 14 operated 19th Licence round (2006) Tromso 8 new awards, 5 operated APA 2006 Licence round 2 new awards, 1 operated 3D…
European gas markets European gas market Limited market access Slow liberalisation of markets Gas price linkage to oil Markets not fungible/liquid Opportunities LNG swing supplier Supplied LNG into 6 European markets Future…
Global LNG Global gas trade the recent past Algeria Middle East Trinidad W.Africa S.E.Asia Markets Australia LNG Pipe Source : BG Group Industry evolution: from three main trade regions 11
Global LNG Global gas trade gradually evolving Norway / Russia Sakhalin Middle East N.Africa Egypt W. Africa Trin / Ven S.E. Asia S. America Australia Markets LNG Existing & proposed Primary (20 mtpa) Pipe LNG trade…
Global LNG Differentiated market characteristics Liquid markets Traditional markets Integrated chains Bilateral trades Short-term Long-term contracts diversions Oil price indexation Market index Limited market liquidity High…
Global LNG Significant barriers to a fully global market Access to supply Existing agreements Business models Market disparities both technical & commercial Access to markets The industry is changing but the next…
LNG portfolio BG Group LNG: Growing a global business UK USA Future purchases Italy Asia and other opportunities Egypt Trinidad PNG Nigeria EG Term sales: 1 to 2 mtpa Chile Current and future equity positions Existing…
LNG portfolio Egyptian LNG An integrated business covering E&P and LNG Project delivery Ahead of schedule - Train 1 three months and Train 2 nine months early, respectively To budget Low cost Upstream enabler world prices…
LNG portfolio LNG purchase: Nigeria & Equatorial Guinea Nigeria - Long-term supply from NLNG Trains 4 & 5 - 2.3 mtpa contract for 20 years. First delivery January 2006 Train 7 2.25 mtpa contract for 20 years Nigeria - Future…
LNG portfolio Nigeria: OKLNG 50km OKLNG Four train project, 5.5 mtpa each Nigeria Plant buys gas sells LNG Initial development of two trains FEED largely completed OPL 332 BG equity 13.5% Sanction 2007 BG offtake planned from…
LNG portfolio BG Groups LNG supply into Europe - 2006 Market Source Cargoes Cargoes 40 40 30 30 20 20 10 10 0 0 Spain UK Belgium France Italy Norway Egypt Trinidad & Nigeria Spot Tobago Supplying European…
BG Group LNG volumes mtpa 9.9 10 8 6.7 6.4 6.4 6 5.7 4.1 4 3.2 2.8 2.1 2 1.1 0.7 0.8 0.4 0 1997 2000 2003 2006 Production Managed volumes Significant growth in both produced and managed volumes 20
BG Group Total operating profit m 3500 CAGR 39% 1997-2006 3,103 3000 2500 2,380 2000 1,513 1500 1,279 1000 833 888 688 500 330 160 229 0 1997 2000 2003 2006 E&P T&D, LNG, Power & Other Continuing operations excluding…
BG Group Key messages Distinctive strategy, portfolio and set of skills A broad spectrum of UK supply opportunities Continental Europe currently a more closed market LNG supply the key for BG Group Flexible, low-cost LNG…
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 company has demonstrated by…
Appendix 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 Reporting Standards…
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