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• Certain statements included in this presentation contain forward-looking information concerning BG Group plc’s strategy, operations, financial performance or condition, outlook, growth opportunities or circumstances in the countries, sectors or markets in which BG Group plc operates. By their nature, forward-looking statements involve uncertainty because they depend on future circumstances, and relate to events, not all of which are within BG Group plc’s control or can be predicted by BG Group plc. Although BG Group plc 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. Actual results could differ materially from the guidance given in this presentation for a number of reasons. For a detailed analysis of the factors that may affect our business, financial performance or results of operations, we urge you to look at the “Principal risks and uncertainties” included in the BG Group plc Annual Report & Accounts 2011. Nothing in this presentation should be construed as a profit forecast and no part of this presentation constitutes, or shall be taken to constitute, an invitation or inducement to invest in BG Group plc or any other entity, and must not be relied upon in any way in connection with any investment decision. BG Group plc undertakes no obligation to update any forward-looking statements.

• No representation or warranty, express or implied, is or will be made in relation to the accuracy or completeness of the information in this presentation and no responsibility or liability is or will be accepted by BG Group plc or any of its respective subsidiaries, affiliates and associated companies (or by any of their respective officers, employees or agents) in relation to it.

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Working together to develop and Internationally Competitive Supply Chain

Aktau, 25 September 2012

Success story – The UK North Sea Industry

Supply Chain

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• Forty years of exploration and development of the UK’s oil and gas reserves has created a world class competitive supply chain

• Annual turnover ~£16 billion

• 450,000 jobs throughout the UK are supported by UKCS activity and the export of oil and gas related goods and services:

• Contributes £5-6 billion per year in corporate and payroll taxes and national insurance.

• UK exports of oil-related goods and services up from £2 billion in year 2000 to more than £7 billion a year

• Main markets are Africa, Europe, North America and Australasia

Source: Oil & Gas UK

Supply Chain Challenges

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• Demand planning and lack of transparency

– What projects or jobs are coming up, how do I plan/invest

• Lack of data on the supply chain – Who, capability and performance

– Local and international companies (JV potential, technology transfer)

– Need performance feedback for improvement

• Inefficiency and unnecessary cost in tendering and contracting

– Duplication, repetitive pre-qualification and RFI, non-standard contract form

• Payment ! – Late payment, lack of support for SMEs

Best Practice in Collaboration UK Supply Chain Code of Practice

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Best Practice in supply chain development

Sharing Supply chain data

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www.fpal.com

UK industry supplier database

+ 3000 suppliers

Registration Assessment Capability Profile Verification Performance

A Kazakhstan Supply Chain Code of Practice?

Benefits:

• Develop Local Content and competitiveness in Kazakhstan

• Encourage SME development and the modernisation of enterprises

• Identify and correct inefficiencies in the tendering process

• Improve performance by adoption of industry best practice

• Promote engagement and collaboration in the supply chain

• Increase overall transparency

Content to be developed by stakeholder collaboration across the industry

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DRAFT Kazakhstan Supply Chain Code of Practice

The code applies to three key stages in the commercial process: 1.Plan - transparent planning of contracting activity by major purchasers to improve supply

chain capability

2.Contract - streamline pre-qualification, tendering and negotiation processes to increase competitiveness and add value

3.Perform and Pay - increase performance feedback dialogue and shorten payment cycles to improve performance

Definitions • Purchaser: All companies in the supply chain who procure goods and services, including

1st tier Operators, their contractors and sub contractors

• Supplier: All providers of goods and services in the supply chain

• SME: Small and Medium Enterprises. A small enterprise has less than 50 employees and a turnover of up to Euro 10m (equivalent) per annum. Refer to EU definitions at http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/sme-definition/index_en.htm

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Best Practice in Collaboration Supply Chain Code of Practice

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The Kazakhstan Supply Chain Code of Practice

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1. Plan - transparent planning of contracting activity by major purchasers to improve supply chain capability and local content Purchasers • Share forward work plans with the industry,

though company websites, industry forums and official reporting formats. Include types of activity, expected contract value bands and timing.

• Publicise a list of internal contacts to facilitate discussion around future work plans.

• Use FPK - First Point Kazakhstan joint industry database - to identify and assess local suppliers of Goods, Works and Services.

• Give full and fair opportunity to local suppliers; extend pre-qualification lists through market research and use of FPK.

• Simplify pre-qualification for low-risk contracts. Provide opportunities for clarification. Avoid use of inappropriate exclusion criteria.

• Apply the Unified Methodology for calculating Local Content.

• Debrief unsuccessful suppliers within 30 days of pre-qualification evaluation, indicating areas for improvement.

Suppliers • Review purchaser plans. Attend industry

events such as purchaser forums in order to understand future requirements.

• Use FPK - First Point Kazakhstan joint industry database - to provide up-to-date information on own capabilities. Review and update regularly. Use own FPK record in marketing .

• Apply the Unified Methodology to own suppliers for calculating and reporting Local Content .

• Participate in debriefing sessions. Apply lessons learned for capability improvement.

2. Contract – streamline tendering and negotiation processes to increase competitiveness and add value

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Purchasers • Conduct all significant Tendering activity in

Kazakhstan.

• Use Tenders lists of local companies where enough local companies are able to pre-qualify. Promote and assist supplier development where good potential is assessed.

• Encourage Local content through weighted bid evaluation.

• Simplify the tendering process and Terms & Conditions for low value and low risk contracts.

• Avoid inappropriate or repetitive questions in pre-qualification and tender; questions already answered in FPK will not be repeated.

• Promote local sub-contractors and formation of local consortia through tenders and contracts.

• Set Local Content Targets in contracts according to own assessment of market capability. Targets should be contract specific.

• Incentivise local content improvement in contracts. Contractual Penalties relating to local content targets should not be applied where suppliers can demonstrate best endeavours to increase local content.

• Consider advance stage payments terms for SMEs where this has good potential to develop local content.

• Avoid requesting financial guarantees & insurance unless there is significant contractual risk..

• Only set appropriate Quality Standards. Use local standards where feasible.

• Invite alternative proposals in order to encourage innovation & new technologies

• Provide appropriate debriefing for all bids.

Suppliers • Seek to develop local sub contractors and

consortia through the contract.

• Propose realistic local content targets and work with the Purchaser to further develop local content through the contract with periodic review.

• Adhere to Purchaser’s HS&E standards, business principles and requirements for business ethics & conduct. Demonstrate compliance.

• Provide alternative proposals for innovation & new technologies where feasible.

• Keep FPK record up-to-date, with full assessment and capability profile where required by Purchasers.

The Kazakhstan Supply Chain Code of Practice

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3. Perform and Pay – increase performance feedback dialogue and shorten payment cycles to improve performance

Purchasers • Include performance indicators in all

significant contracts with an appropriate review programme for the life of the contracts

• Hold structured dialogue on performance, with feedback at appropriate stages during the contract. Seek to improve mutual performance, minimise waste learn from mistakes and apply best practice.

• Review local content targets with suppliers.

• Pay all valid invoices within 30 days.

Suppliers • Track and discuss key contract

performance indicators.• Request performance feedback with

Purchaser, including assessment of Purchaser’s performance.

• Submit complete and valid invoices with supporting documentation in accordance with contract obligation.

• Adopt a prompt payment policy for own suppliers.

• Provide advance stage payments to own subcontractor SMEs where this will develop local content.

The Kazakhstan Supply Chain Code of Practice

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The code is voluntary and its signatories commit to work towards full compliance with the code. It is designed to help the signatories achieve the highest standards of business ethics, health, safety and environmental operations in accordance with all relevant local, national and international statutory requirements.

Go beyond regulations - Promote industry collaboration

Joint branding with logos of operating companies, major contractors, trade associations, regulators etc.

Commitment to the CodeOn behalf of _________________________________(company)

Name (1)_________________ (2)_________________

Position CEO / President / MD Supply Chain Manager

Signed ____________________ ____________________

Date ____________________ ____________________

Best Practice in Collaboration UK Supply Chain Code of Practice

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International Best Practice Improving Supplier Capability and Performance

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Best Practice transferring to Kazakhstan

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Working together in Kazakhstan to develop an Internationally

Competitive Supply Chain

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Open competitive environment & Best Practice Inward investment – Employment - Technology and Capability transfer