Corporate Responsibility Frank Chapman Chief Executive

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Corporate ResponsibilityFrank Chapman Chief
Executive

• London
• 25th June 2003

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Disclaimer
The following presentation includes
"forward-looking-information" within the meaning
of Section 27A of the US Securities Act of 1933,
as amended, and Section 21E of the US Securities
Exchange Act of 1934, as amended. Certain
statements included in this presentation,
including without limitation those concerning (i)
BG Groups strategy, outlook and growth
opportunities, (ii) BG Groups positioning to
deliver future plans and to realise potential for
growth, (iii) the gas to oil ratio, (iv) health
risk assessments, and (v) statements preceded by
believes, expects, anticipates, plans,
intends or similar expressions, contain certain
forward looking information concerning BG Group's
operations, economic performance and financial
performance. Although BG Group believes that the
expectations reflected in such forward looking
statements are reasonable, no assurance can be
given that such expectations will prove to have
been correct. Accordingly, results could differ
materially from those set out in the forward
looking statements, as a result of, among other
factors, (i) changes in economic, market and
competitive conditions, including oil and gas
prices, (ii) success in implementing business and
operating initiatives (iii) changes in the
regulatory environment and other government
actions (iv) the failure to ensure the safe
operation of BG Group's assets worldwide (v)
implementation risk, being the challenges
associated with delivering capital intensive
projects on time and on budget, including the
need to retain and motivate staff (vi) a major
recession or significant upheaval in the major
markets in which the BG Group operates, (vii)
commodity risk, being the risk of a significant
fluctuation in oil and/or gas prices from those
assumed, (viii) exchange rates being
significantly different to those assumed, (ix)
risks encountered in the gas and oil exploration
and production sector in general and (x) the
Risk Factors included in BG Group's Annual Report
and Accounts 2002. BG Group does not undertake
any obligation to update or revise any forward
looking statements. This presentation does not
constitute or contain an invitation or inducement
to any person to underwrite, subscribe for,
otherwise acquire, or dispose of any ordinary
shares or ADRs or other investments in BG Group
plc or any other entity, nor does it advise any
person to do any of the foregoing and this
presentation must not be relied on in any way in
connection with any investment decision.
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The Integrated Gas Major

• The business environment favours gas
• Our strategy is unique
• We have a balanced portfolio
• Our costs have been transformed
• BG offers high growth and good returns

Delivering exceptional value
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Business model
Markets
Enabling
Resources
Delivering exceptional value to shareholders
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Countries of current operation
Italy
Israel P.A. Territories
UK
Kazakhstan
USA
Spain
India
Trinidad Tobago
Tunisia
Egypt
Brazil
Thailand
Philippines
Malaysia
Bolivia
Indonesia
Singapore
Uruguay
Argentina
Active in some 20 countries
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Business Principles and Policies

• Business Principles set framework
• Owned, agreed and reviewed annually by the Board
• Rooted in the organisation underpinned by 8
  Group Policies

Conducting business responsibly
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Governance

• Matches highest standards
• Robust Assurance
• Integrated with the business

Conducting business responsibly
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Health and Safety Performance

• Continued improvement in safety performance
• 25 improvement in Lost Time Injury Frequency
• 2001-2002
• Top quartile performance in upstream oil and gas
  companies
• gt 30 take up of head office fitness facility

Maintaining progress
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Environmental Impact

• Our business delivers environmental benefits
• Gas/oil ratio will remain around 7030
• Promotion of fuel switching to gas
• climate change benefits lowest carbon fossil
  fuel
• local air quality improvements particulates and
  NOx
• Innovative technology
• MicroCHP
• Natural gas vehicles

Realising the environmental advantages of gas
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Environmental Performance

• Climate Change
• Greenhouse gas emissions reduced for 4th year
  running
• 5.7 million tonnes CO2 equivalent, BG managed
  operations
• 6 reduction 2001-2002 in absolute emission total
• 19 reduction 2001-2002 in relative emissions
  tonnes/boe
• Local Air quality
• Temporary increased SO2 emissions due to
  developments in Karachaganak. Action to reduce
  in future
• 4th flash gas compressor operational by end June
  2003
• Re-injection of sour gas to prevent increases
  with increased production
• Oxides of nitrogen emissions reduced 11
  2001-2002

Beyond compliance to meet international standards
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Delivering HSSE Improvement

• Health Risk Assessments in core assets by end
  2003
• Introducing behaviour based safety programmes to
  maintain improvements in performance
• Continually reviewing security of assets and
  staff in the line with threat assessments.
• ISO 14001/EMAS in 11 out of 13 (85) major
  managed operations
• 14-Point Profile Tool to drive improvement
• Chairmans Awards to recognise excellence and
  spread best practice

Driving world class HSSE Performance
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Economic Development

• The world needs energy will remain hydrocarbon
  dependent
• Sourced in increasing proportions from developing
  countries
• The challenge is managing socio-economic impact
  of oil and gas investment
• Gas is different from oil in countries where we
  are operational, we supply energy to local market
• Partnership between host Governments, companies
  and communities
• E.g. Bolivia, Kazakhstan
• Recognise complexity but seeking solutions with
  others
• Participated fully in World Bank Extractive
  Industry Review
• Support the Extractive Industries Transparency
  Initiative

Contributing to sustainable development
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Human Rights

• Security and human rights
• Group Security Policy endorses the Voluntary
  Principles on Security and Human Rights
• Managing community impact
• Egypt set the standard for community
  consultation on projects
• Kazakhstan relocation of village to World Bank
  guidelines
• Bolivia working with community and reducing
  security risks
• Indigenous people
• Rights are respected but few relevant locations
• Managed by consultation
• Tangguh we monitor and have confidence in
  operator
• South America pipeline routes, at early stage
  and will incorporate human rights concerns
  planning

Applying principles of Universal Declaration of
Human Rights
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Human Resources

• Accessing the worldwide talent pool essential to
  a successful business with high growth plans
• over 80 BG people outside UK
• 7 out of 19 Asset Managers not UK people
• 25 female employees, 24 attendance at
  Leadership Training
• South America 8 out of 9 management team from
  the Region
• Benefits of Localisation of management positions
• Contacts and culture
• Cost
• High skill base in some countries
• Training 87 attendees on International
  Management Programme local staff
• Building knowledge and using skills over 10
  expats from countries other than the UK
• A challenging yet supportive environment to
  encourage individual development and sustainable
  performance
• Work/Life balance
• Involving culture
• Learning from the outside environment

Attracting and retaining top talent
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Community Involvement

• Getting value for community investment
• Stakeholder consultations
• Projects aligned to skills transfer
• Reflect core business (gas-powered science buses)
• Maximize local content
• Sustainable local businesses (Kazakh contractors)
• Promoting inward investment with international
  partnering
• Capacity development (Pratham education
  initiative)
• Community contributions 6.5m in 2002
• 4.2m social funds and 2.1m voluntary
• Employee volunteer schemes in our businesses

Contributing to sustainable development
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Conclusion

• Corporate responsibility is fundamental to the
  way we operate because it makes business sense
• We seek to maximise our contribution while
  delivering shareholder value
• We work to understand and minimise any negative
  impacts
• We have achieved significant progress and
  continue to work on the remaining challenges

An area of commitment
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ANNEX ADDITIONAL SLIDES
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Business Principles

• Business Principles
• Personal conduct
• Work environment
• Corporate conduct
• Human rights
• Health, safety and environment
• Communication
• Third parties
• Customers
• Economic priorities

Conducting business responsibly
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Environmental ManagementISO 14001 Certification
T D E P Power Development Certification
Achieved
METROGAS , Argentina
BG BOLIVIA
BONGKOT, Thailand
PREMIER POWER, Northern Ireland
BG Trinidad and Tobago
GUJARAT, India
BG India
BG TUNISIA
NSW, UK Offshore
ARMADA, UK
1999
2000
2001
2002
2003
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14 Point-Profile Progress 2002
Effective tool for improvement
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14 Point tool approach

• The 14 Point profile is a self assessment tool
  which allows assets to analyse how they deal with
  the range of HSSE issues. It measures 14 inputs
  necessary to deliver superior performance
  including
• Leadership and commitment
• Competency and training
• Contractor performance
• Incident Investigation
• Assets complete the assessment questionnaire on
  the 14 elements to establish their baseline.
  This is then used to develop an annual
  performance improvement plan with targets agreed
  with their line managers and corporate HSSE
  department.
• This table shows the aggregate scores for BG
  Group 2002.
• wide green bar shows the end 2001 baseline,
• the yellow is the aggregate target and
• the red the stretch.
• The dark bar in the centre is actual 2002 scores.
• You will see that the targets are demanding, we
  reached target in 11 of the 14 elements. We
  reached stretch in none but came close in
  leadership and commitment and asset integrity.
  This is an internal management tool which
  underpins the performance on the previous slide
  by measuring and setting goals for the inputs to
  good HSSE performance.

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Environmental Performance
GHG Emissions (Million tonnes CO2e)