2011 Henry Bacon SeminarStatoil’s perspective on the High North/Arctic

Hans M. Gjennestad, Senior Strategy Advisor;

Development and Production Norway

May the 3rd 2011, Washington DC

Stavanger

Norway and the High NorthOur point of departure

Snøhvit

Norwegian Continental ShelfThe first step – 1985Norwegian Continental ShelfThe second step - 1996Norwegian Continental ShelfThe third step - 2000Norwegian Continental ShelfThe fourth step – 2006/7Norwegian Continental ShelfStatus 1979Key learnings

What seems impossible can be done

… and create significant value

Present status

• 4 mill boe/d export

• 3500 BCF/Y gas to Europe

StatfjordStatpipeTrollSnøhvit

Statfjord Nyhamna

Europipe II

Europipe I

Norpipe

Emden/Dornum

Teesside

ÅTS

Norne

Åsgard

Haltenpipe

Heidrun

Franpipe

Zeebrügge

Zeepipe I

St Fergus

Vesterled

Frigg

Kårstø

Kollsnes

Melkøya

Snøhvit

Ormen Lange

Easington

Langeled

Ekofisk

Sleipner

Troll

Dunkerque

Åsgard

Norwegian Continental ShelfOpportunities and challenges

0

1

2

3

4

2010 2015 2020 2025 2030

mill

boep

d

Reserves from fields in production Resources in f ields

Resources in discoveries Undiscovered resources

Opportunities

• Undeveloped reserves/Yet to find potential

Main challenges

• Maturing portfolio

• Many, but smaller new developments

Ambition towards 2020

• Maintain present production level

Towards 2030

• Need access to large scale acreage

• Political choices define future

Operational efficiency

Industrialisation and prioritisation

Access to new acreage

Gas in Europe Industrial reality towards 2030

      

“Gas fundamental to• Europe's energy security• Europe's economy and • Battle on climate change.”

Former Energy Commissioner Former Energy Commissioner Andris PiebalgsAndris Piebalgs

Felipe Gonzalez,

Chair of reflection Group, Project Europe 2030: Challenges and

OpportunitiesThe EU should grow its gas

production

• open new frontiers,

• remove licensing barriers,

• allow investments in frontier areas, such as the Arctic.

0

200

400

600

800

2007 2012 2017 2022 2027

4% natural decline illustration Demand - IEA Ref scenario

Demand - IEA 450 Scenario

Bill

ion

Sm

3 /Y

ea

r

European gas demand

Supply – present fields

Gap 8,7 TCF/y

18,6 TCF/y

•Licence awards/exploration drilling since 1980

–81 exploration wells

–27 active exploration and production companies

– 20 years of safe operations

•Major field developments

–Snøhvit Liquefied Natural Gas (Statoil)

–Goliat oil field (Eni)

•Recent oil discovery

–Skrugard

=> A new production region in the Arctic

The High North/ArcticExperience and way forward

Full subsea field/remote operationRecord-distance multiphase flowCO2 sequestration and storagePath breaking LNG technology

Zero surface solutions – from subsea to the beach

Snøhvit – technology for the ArcticA benchmark project for offshore and LNG technology

Norwegian/Russian agreementPotential implications

•For the Arctic region

– A new step in offshore oil/gas

•For Europe

– A new option for long term supply

•For Russia

– A new “less challenging” upstream region

•For Statoil

– A new “multifaceted” opportunity set

The ArcticLong-term perspective in the Arctic

•Norway moves from the South to the North

•Russia moves from the South to the North

•Significant resource potential along these development lines

→ The High North - a natural meeting area for long term co-operation.

Statoil’s Arctic positionsThe way forward

•Statoil positions

– Barents Sea

– Greenland – East/West

– Canada – Grand Banks

– Alaska – Chukchi Sea

•Key success factors in the Arctic

– Safety and public trust

– Solid sub surface knowledge

– Stamina

– Step wise development

Thank you

Oslo

Washington DC

The opportunities

Snøhvit

The Arctic The Statoil Perspective

The High North – Arctic

• A new energy region

• A source for long term energy supply.

• The NCS competence – excellent starting point

The Arctic for Norway

• A unique energy opportunity

• Further development of the national competence capital

• A driving force for regional value creation