Statoil’s industrial response to the energy and climate challenges

Øystein Michelsen Executive Vice President, Statoil

• Energy company present in 40 countries with 30,000 employees

• Producing 1.95 million barrel of oil equivalent (boe) pr day

• About 22 billion boe in proven resources (5.6 billion as booked reserves)

• One of the world’s largest net sellers of crude oil

• The world's largest operator in waters deeper than 100 metres

• World leader in carbon capture and storage

• The second largest exporter of gas to Europe

• Largest retailer of oil products in Scandinavia

• Over 16 billion € in yearly group procurement

Statoil in brief

Striking the right balance Energy realities

Climate challenge

Global leadership

Statoil’s industrial response Low carbon production

Carbon capture and storage

New energy Energy supply

0

40

80

120

2001 2005 2009 2013

Economic development

CO2 efficient and attractive energy

Break even gas prices in power generation (no CO2 cost)

$10/MMbtu $11/MMbtu

$15/MMbtu

Source: IEA

Climate gas emissions - kg CO2 equivalent per barrel of oil equivalent

Norway Europe Russia Africa Middle East

Global average:

Gas Coal Nuclear Wind

Investment Operation Fuel

Norway - an important supplier of energy

Norway in the oil market

Source: BP Statistical Review of World Energy 2007.

Norway in the gas market

Net export (mb/d) Reserves (bn bbl) Net export (bcm/year) Reserves (tcm)

Statoil’s ambition: maintain the production level

Map source: Norwegian Petroleum Directorate.

Stilised production profile

Early phase projects Fields under development Fields in production

Access to new acreage needed to sustain production beyond 2020

Large remaining potential

North Sea

Norwegian Sea

Barents Sea

Undiscovered Produced Contingent resources in field and discoveries Remaining reserves

Source: Fact sheet, Ministry of Petroleum and Energy

alternatives

From pioneering to industrialsation

The European Gas perspective

Main supply routes to Europe

Norway

Russia

Algeria

Pipeline

LNG

•  Europe – in a fortunate position on gas

•  IEA report on natural decline rates (Nov 2009)

–  50% reduction in global capacity by 2030

•  Implication for Europe –  need 250 BCM/y of new capacity by 2030

•  Long term security of gas will require –  Timely investment in new capacity –  Access to new exploration acreage

•  Long lead times – Action needed now for 2020-25 supply

12 Statoil Group Procurement 2009

Top 10 Countries Spend based on suppliers’ invoice address

Total Spend 2008: BNOK 121,4 Total Spend 2009: BNOK 129,8

The economy is picking up speed, but…

Economic growth forecast by key country/region

Oil price 2001-2015 Brent blend, USD/bbl

Source: IHS Global Insight Source: Statoil

Weak market fundamentals

Competitive energy source

Fuel for the future

Gas: Bridging troubled waters

Source: Statoil

Short-term gas prices UK NBP, GB pence per British thermal unit

Statoil on the Norwegian Continental Shelf Exploration and production Norway

Florø

Stavanger

Bergen/Mongstad

Hammerfest

Kristiansund

Stjørdal

Brønnøysund

Sandnessjøen

Harstad

•  Statfjord

•  Oseberg

•  Gullfaks

•  Snorre

•  Norne

•  Heidrun

•  Åsgard

•  Kristin

•  Njord

•  Troll

•  Kvitebjørn

•  Visund

•  Grane

•  Sleipner

•  Volve

•  Draupner

• Marginal fields

Operations

North

Operations

North Sea

Operations West

Our strategy: Safe and efficient operations Maximise the potential

• Snøhvit

Offhore installations 34

Mobile rigs 18

Vessels 50

Helicoptres 22

Chartered planes 2

Helicopter bases 6

Supply bases 7

NCS - Great achievements in short time

• Consolidated two large organisations

• Production delivery confidence

• Positive HSE trend, with some setbacks

• 300 kboe/d in new production capacity

• 70 kboe/day to be put onstream 2010

• 4 PDOs

• Successful exploration

– 60 discoveries, 70 % success rate

•  IOR reserve growth: 431 mill boe

NCS - Great achievements in short time

• Consolidated two large organisations

• Production delivery confidence

• Positive HSE trend, with some setbacks

• 300 kboe/d in new production capacity

• 70 kboe/day to be put onstream 2010

• 4 PDOs

• Successful exploration

– 60 discoveries, 70 % success rate

•  IOR reserve growth: 431 mill boe

An industry that makes a difference A significant role in the Norwegian economy

Macroeconomic key figures 2008 Oil and gas share in…

Source: Statistics Norway, Ministry of Finance

Government revenue:

36 per cent

Gross domestic product

25 per cent

Total export:

51 per cent

Real investment spending

24 per cent

In 2009, total NCS investment amount to 40 opera houses

Major contributor to society From oil and gas to wealth and welfare

Government Petroleum Fund - Global Total capital, NOK bn

Source: Norges Bank, OECD.

Per capita GDP USD index, 2006 (USA = 100)

Norwegian Continental Shelf The first step – 1985 Norwegian Continental Shelf The second step - 1996 Norwegian Continental Shelf The third step - 2000 Norwegian Continental Shelf The fourth step – 2006/7 Norwegian Continental Shelf Status 1979

Key learnings

• What seems impossible can be done

• … and create significant value

Statfjord Statpipe Troll Snøhvit

Statfjord Nyhamna

Europipe II Europipe I

Norpipe

Emden

Teesside

ÅTS

Norne

Åsgard

Haltenpipe

Heidrun

Franpipe

Zeebrugge

Zeepipe I

St Fergus

Vesterled

Frigg

Kårstø

Kollsnes

Melkøya

Snøhvit

Ormen Lange

Easington

Langeled

Ekofisk

Sleipner

Troll

Dunkirk

Åsgard

Arctic resources and Statoil’s offshore positions

•  Chuckhi Sea (US Alaska)

•  Barents Sea (Norway / Russia)

• East Greenland

•  Newfoundland (Canada)

The Barents Sea

• Vast area

– 1.4 Million square kilometres

• Licence awards and consecutive exploration drilling since 1980

– 81 exploration wells

– 27 active exploration and production companies

• Major field developments

– Snøhvit Liquefied Natural Gas (StatoilHydro)

– Goliat oil field (Eni)