How do you evaluate the significance of BG’s assets in Tanzania in relation to the company’s overall strategy?

Tanzania serves as an excellent example of how BG Group strategically leverages its competitive advantages. Our group strategy primarily focuses on exploration and the liquefied natural gas (LNG) segments. In 2010, we entered Tanzania after conducting a thorough analysis of the country’s potential for exploration success and the increasing demand for energy in Asia. Our aim was to explore natural gas reserves and export them to meet the growing energy needs in Asia, while also addressing Tanzania’s domestic energy requirements. Through early exploration work, we identified signific

ant gas-prone basins and have made multiple discoveries to date, with approximately 15 trillion cubic feet of total gross recoverable resources. We have also made progress in selecting and acquiring a site for an LNG terminal, positioning Tanzania as a prime opportunity for expanding our LNG business alongside Canada and the US. Our approach involves identifying exploration opportunities early, swiftly making discoveries, and developing world-class LNG projects to supply our global LNG marketing business. While we are still in the early stages of our operations in Tanzania, we have achieved encouraging results thus far.

What are your short-term expectations for ongoing exploration activities in blocks 1, 3, and 4?

Our success rate in offshore Tanzania has been exceptional, with a 100% success rate in 15 out of 15 wells since 2010. This achievement is remarkable considering the industry’s average success probability for exploration wells ranges from 10% to 20%. Among these wells, 10 were discovery wells, five were appraisal wells, and we conducted three successful drill stem tests on these discoveries. The resources we have proven so far are sufficient for a two-train LNG project. Currently, we are engaged in further appraisal and exploration work, and our next phase of exploration preparation is expected to commence in 2016 or 2017. We are also entering what we call the “select phase,” where we carefully analyze various options for developing the proven gas resources. This involves detailed design considerations for offshore and onshore facilities, as well as maturing the commercial structure of the entire project. Collaboration with our joint venture partners, including the Tanzania Petroleum Development Corporation and government agencies, will be instrumental in finalizing the commercial structure agreements, which are targeted for 2015. Overall, I am proud of our achievements to date, and I anticipate that the next 12 months will be an exciting and pivotal period.

How can Tanzania fully exploit its immense potential as an LNG exporter?

We are currently developing a large-scale upstream project and have formed a consortium with partners Ophir Energy and Pavilion Energy in blocks 1, 3, and 4. Additionally, in block 2, we have a consortium consisting of Statoil and ExxonMobil, who have also made significant gas discoveries. In 2012, the Tanzanian government proposed the idea of building a joint LNG plant, which presented a mutually beneficial opportunity for all parties involved. Collaborating on a joint LNG plant offers cost savings and a more efficient solution. We have been working closely with officials and have reached an agreement with the government and the five companies to conduct feasibility studies for the energy project over the next few years. BG Group plays a leading role in this consortium, and we have established a joint venture team with representatives from all organizations. We have offices in Dar es Salaam and London dedicated to progressing this joint venture. What is particularly exciting is our commitment to work closely with Tanzania to maximize local involvement in the project, including the utilization of Tanzanian institutions and local companies for construction and operation.

How is BG Group actively increasing its level of local content in Tanzania?

BG Group is fully committed to improving livelihoods and supporting development in Tanzania through our investment activities. Despite our relatively short time in the country, we have already made significant progress in this regard. An example of our efforts is the establishment of a dedicated offshore drilling supply base in Mtwara, in collaboration with Ophir and Statoil. As part of this initiative, we have invested approximately $40 million in upgrading the port of Mtwara, with 70% of the investment being channeled through Tanzanian-registered companies. Our objective was to ensure that these local companies meet international oil and gas safety and quality standards, and we are proud of the successful outcome. We remain committed to working closely with the local government and Tanzanian companies to enhance local content throughout our operations while maintaining the highest safety and quality standards. This requires collective efforts from BG Group, the government, and other institutions. One crucial aspect is building the necessary human capacity, and to address this, we are adopting an education pipeline approach. Additionally, we have initiated various social investment initiatives to support this approach. Engaging young people in key disciplines related to the oil and gas industry is vital, which is why we have partnered with Young Scientists Tanzania (YST) to conduct a science competition in schools across the country. Furthermore, we take pride in our international graduate development program, where we have recruited nine Tanzanian graduates over the past two years. These individuals undergo a two-year program, working in multiple countries within our international operations, before assuming roles within the company. Additionally, we provide scholarships for higher education in science-related studies, supporting Tanzanian students pursuing Master’s degrees in various fields. Our commitment to increasing local content remains strong.

How have you been working with Tanzania to ensure maximum local involvement and capacity building?

BG Group has been working closely and collaboratively with Tanzania to ensure maximum local involvement and capacity building. This is evident in both the joint venture for the LNG plant and our upstream operations. We are committed to building a platform that enables Tanzanian institutions and local companies to actively participate in the project’s construction and operation. To achieve this, we have formed partnerships and collaborations with Tanzanian entities. For instance, in the joint venture for the LNG plant, we have established a consortium comprising representatives from all participating organizations. We have set up offices in Dar es Salaam and London dedicated to progressing the work. These efforts facilitate ongoing communication and cooperation between all stakeholders. Furthermore, we have worked diligently with Tanzanian government officials to develop a feasible and mutually beneficial framework for the project. By engaging closely with Tanzania, we aim to create opportunities for Tanzanian institutions and companies to contribute their expertise and resources, thereby maximizing local involvement throughout the project’s lifecycle.