Agreement on Karachaganak completed with RoK

28 June 2012

Agreement on Karachaganak completed with Republic of Kazakhstan

BG Group today announced with the Republic of Kazakhstan ("the Republic") and the other contracting companies in the giant Karachaganak gas-condensate field in north-west Kazakhstan, completion of their agreement which was initially signed on 14 December 2011.*

Under the terms of the agreement the Republic has acquired a 10% interest in the Karachaganak Final Production Sharing Agreement (FPSA) for $2.0 billion cash and $1.0 billion non-cash consideration (pre-tax) including the final and irrevocable settlement of all cost recovery claims. Tax of $1.0 billion is payable on the gain arising on the disposal. The Republic's interest in the Karachaganak FPSA will be managed by the national oil company, KazMunaiGas (KMG).

The consideration under the agreement also includes the allocation of an additional 2 million tonnes per year capacity in the Caspian Pipeline Consortium export pipeline (CPC) over the remaining life of the FPSA. This additional capacity starts at 0.5 million tonnes immediately and rises to 2 million tonnes during CPC expansion, which is underway and expected to complete over the next three years. Completion of the agreement also provides for:

·; exemption from export custom duties for the Karachaganak project until 2038, the remaining 26 years of the FPSA term; and

·; final agreement on all tax and customs matters up to the end of 2009.

Sir Frank Chapman, BG Group Chief Executive, said: "We welcome the Republic of Kazakhstan and KMG into the Karachaganak contracting companies group and look forward to working with all of our partners to capture the significant remaining potential of the giant Karachaganak field."

Ashley Almanza, BG Group Executive Vice President, said: "With this agreement in place the partnership can now move forward with new field development plans which are expected to unlock enormous value for both the country and the contracting companies."

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Notes to Editors:

* www.bg-group.com/MediaCentre/Press/Pages/14Dec2010.aspx

From the effective date of 28 June 2012, BG Group's interest in the Karachaganak project has been reduced to 29.25% from the 32.5% previously held. BG Group will remain joint operator with Eni, which now also holds 29.25% (previously 32.5%). Chevron now holds 18% (20%); LUKOIL 13.5% (15%); and KMG 10%. Karachaganak is estimated to have hydrocarbons initially in place of 9 billion barrels of condensate and 48 trillion cubic feet of gas.

BG Group plc (LSE: BG.L) is a world leader in natural gas, with a strategy focused on connecting competitively priced resources to specific, high-value markets. Active in more than 20 countries on five continents, BG Group has a broad portfolio of exploration and production, Liquefied Natural Gas (LNG) and transmission and distribution business interests. It combines a deep understanding of gas markets with a proven track record in finding and commercialising reserves. For further information visit: www.bg-group.com

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There are matters set out within this announcement that are forward-looking statements. Such statements are only predictions, and actual events or results may differ materially. For a discussion of important factors which could cause actual results to differ from these forward-looking statements, refer toBG Group's Annual Report and Accounts for the year ended 31 December 2011. BG Group does not undertake any obligation to update publicly, or revise, forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.