Update on Tupi and Guará fields, offshore Brazil

9 December, 2010

BG Group announces update on Tupi and Guará fields,

Santos Basin, offshore Brazil

BG Group today announced an update on the Tupi and Guará fields in the Santos Basin, offshore Brazil. The update relates to the first two Floating Production, Storage and Offloading (FPSO) vessels on the Tupi field and the first FPSO on the Guará field.

The first FPSO on the Tupi field has a production capacity of 100 000 barrels of oil per day (bopd) and up to 177 million standard cubic feet of gas per day (mmscfd). It commenced production inOctober 2010. The second FPSO on the Tupi field is due onstream in 2013 and will have a production capacity of 120 000 bopd and 177 mmscfd of gas. A similar FPSO will be deployed on Guará and is also due onstream in 2013. All three FPSOs will be leased.

The gas export pipeline with capacity to service all three FPSOs is in place, linking the Tupi area to Brazilian domestic gas infrastructure via the Petrobras Mexilhão platform.

Based on the new resources estimates for these fields previously released in BG Group's Third Quarter 2010 earnings statement, the three FPSOs are expected to recover total gross reserves of approximately 2.2 billion barrels of oil equivalent (boe) - approximately 600 million boe net toBG Group - within the concession periods, utilising a total of approximately 40 production and injection wells.

In light of the outstanding reservoir characteristics and high recovery per well, BG Group anticipates very low unit technical costs for this initial phase of development, amounting to:

·; capital costs of $5/boe; and

·; operating costs of $9/boe.

The key assumptions underlying this guidance are set out in the Background Notes, below.

BG Group Chief Executive Frank Chapman said: "Following our material upgrade to resources in November, the information released today should enable an improved appreciation of the value and capital efficiency of BG Group's world-class Santos Basin assets."

BG Group's appraisal and modelling work on the other pre-salt discoveries continues. The Group will update the market in due course once those results enable resource estimates to be refined further.

-ends-

Background Notes

* http://www.bg-group.com/MediaCentre/Press/Pages/2Nov2010.aspx

Reference conditions

·; Brent Oil price US $70/bbl

·; All costs are real and point forward from 1 January, 2011

Additional information

·; Tupi concession ends 2037, Guará concession ends 2039.

·; Capex/boe includes well costs (drilling and subsea), gas gathering pipelines and sundry capex.

·; Opex/boe includes FPSO lease, field opex and well workovers; excludes oil transportation costs of $3-4/boe to access international markets, and excludes Special Participation (SP) payment and royalty costs.

About BG Group

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

BG Group has a 25% interest in the Tupi, Iracema and Iara discoveries in BM-S-11 concession, offshore Brazil (Petrobras, operator 65%, Petrogal 10%). The Group has a 30% interest in the Guará and Carioca discoveries in the BM-S-9 concession, offshore Brazil (Petrobras, operator 45%, Repsol 25%).

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Contacts

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.