Production facilities tender for offshore Brazil

7 January 2011

Production facilities tender for offshore Brazil

BG Group and partners today announced a tender process for the charter of two further Floating Production, Storage and Offloading (FPSO) vessels to be used in the full field development of the discoveries on blocks BM-S-9 and BM-S-11 in the Santos Basin, offshore Brazil.

The two latest FPSOs build upon the current production facility commitments. Each will have a production capacity of 150 000 barrels of oil per day (bopd) and approximately 212 million cubic feet of gas per day. The modules are being tendered for start-up in 2014. One FPSO will be allocated to the Guará Norte area on block BM-S-9 and the other to the southern area of the Cernambi field (formerly known as Iracema) on block BM-S-11.

To date, with the addition of these two new modules, a total of 13 FPSOs are being procured for the two blocks, which include the Carioca and Guará areas on BM-S-9 and, on BM-S-11, the Lula (formerly known as Tupi) and Cernambi fields as well as the Iara area. The first permanent 100 000 bopd FPSO is already in operation on the Lula field*. Two 120 000 bopd FPSOs are due onstream on the Lula field and Guará area in 2013**, and contracts for eight 150 000 bopd FPSO hulls were awarded in November 2010, with start-up expected between 2015 and 2017 ***.

BG Group Chief Executive Frank Chapman said: "The development of our world-class interests in the Santos Basin continues apace. Production from the first FPSO is already underway, and a fleet of 12 further FPSOs presently underpins our substantial development plans."

BG Group has a 25% interest in the BM-S-11 concession (Petrobras S.A. 65% and operator, Petrogal 10%) and a 30% interest in the BM-S-9 concession (Petrobras S.A. 45% and operator, Repsol 25%).

-ends-

Notes to Editors:

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 25 countries on five continents, BG Group has a broad portfolio of exploration and production, Liquefied Natural Gas (LNG), transmission and distribution and power generation 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

Following the Declaration of Commerciality for the Tupi and Iracema areas on December 29, 2010, the "Lula" and "Cernambi" field names have been suggested to the Brazilian regulator, the ANP, for Tupi and Iracema areas respectively. For further details see:

http://www.bg-group.com/MEDIACENTRE/PRESS/Pages/29Dec2010.aspx 

* http://www.bg-group.com/MediaCentre/Press/Pages/28Oct2010.aspx

** http://www.bg-group.com/MediaCentre/Press/Pages/9Dec2010.aspx

*** http://www.bg-group.com/MediaCentre/Press/Pages/11Nov2010.aspx

Picture Desks:

For images of BG Group visit:  www.vismedia.co.uk (requires additional registration)

Contact:

Neil Burrows: +44 (0) 118 929 2462 [email protected]

Jo Thethi: +44 (0) 118 929 3110 [email protected]

Out of Hours Media Mobile: +44 (0) 7917 185 707

Investor Relations: +44 (0) 118 929 3025 [email protected]

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 2009. 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.