Developing a strong gas portfolio in a turbulent market

Bengt Lie Hansen, President Statoil RussiaThe 8th Russian Petroleum & Gas CongressMoscow, 24.06.2010

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29.000 employees in 41 countries

Integrated international energy company

67% owned by Norwegian state

35 years of oil& gas production experience

World leader in the use of deepwater technology

Equity production of 1.96 mboe per day (2009)

Market capitalization of about USD 80 billion (2009)

World’s largest overall offshore organization

Strategy & focus areas

Major facts & figures

Worldwide presence

Global offshore champion

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A leading European gas position

• Large resource base and yet to find potential

• Closeness to large markets

• Extensive infrastructure

• Competent industrial cluster

• Stable regulatory framework

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Strong results in a turbulent gas market

Reduced demand and increased supply capacity have reduced prices

(bcm)

Natural Gas adjusted net operating income 2009

(NOK bn)

Processing and

transport

Marketing and trading,

including adjustments*

Adjusted earnings

2009

7.5

9.0 16.5

* Adjustments include; derivatives MtM, write downs and asset retirement obligations

0

10

20

30

40

jan. 08 jun. 08 nov. 08 apr. 09 sep. 09

German import priceZeebrugge, spot

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Oil production*

Gas becomes more important on the Norwegian Continental Shelf

Trading and optimisation increasingly important for value creation

* Production: Statoil and State’s Direct Financial Interest (SDFI) volumesThe volumes in long term gas contracts prior to 2000 are estimates. ** These numbers show group perspective on value creation and are not accounting figures

Most gas sold on long term contracts with regular price reviews

~ 3.4 bn NOKGas FlexibilityLNGCO2

Electricity

Upstream flexibility

Gas production* Volumes in long term gas contracts*

Record trading result in 2009**

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Gas value chain

•15% share of European gas market, second largest seller

•Supplying gas to UK, Germany, The Netherlands, Belgium, France, Italy and Spain

•Partner on Shah Deniz gas field with supplies to Azerbaijan, Georgia and Turkey

•Developing a competitive gas position in the US market

•Natural gas is more carbon efficient than other fossil fuels

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Developing our global gas position step by step

1977 - 2008

NCS gas machine

CaspianLNG

North Africa

Shtokman

Marcellus

The Arctic locomotive

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Troll A, The North Sea gas locomotive

•Troll A represents 60% of total gas reserves on the Norwegian continental shelf

•Supplying gas to Europe since 1996. Reserves estimated to last 70 years

•Gas transferred via 65km pipeline to shore for processing at Kollsnes near Bergen, Norway

•Processing on land reduces operating costs

•Powering the production platform from shore reduces emissions of CO2 and

nitrogen oxides

9Ormen Lange, The Norwegian Sea gas locomotive

•Subsea field development offshore at 1000 m water depth

•Multiphase flow pipeline to shore

•Gas processing plant on land

•World’s largest and longest subsea pipeline to UK

•Gas to UK market

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Snøhvit, The Barents Sea gas locomotive

•The world’s northernmost LNG operation

•5.1million tonnes of LNG.Production period: 2007-2035

•Sub-sea installations at 300m depth.No platforms or production vessels

•Gas transferred ashore for processingvia 143km pipeline

•CO2 from processing re-injected

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Snøhvit LNG

Differences in prices between New York and Henry Hub*

($/mmbtu)

Strategically positioned in the US

* Source: Platts

Developing the US gas business

•Competitive supply positions close to attractive markets in North East

•Source for increased trading and marketing activities

•Secures new infrastructure and market expansion into the New York City area

Marcellus Area

Cove PointRe-gas terminal

New York

Gulf of Mexico

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NORWAY

SnøhvitShtokman

•Giant field development

Groundbreaking technology and scale

Will ensure technological, industrial & social development and modernisation

•Important progress made on concept, feasibility and technological work

•Strong international partnership

•Opportunities for the Russian supplier industry

Shtokman - a catalyst for innovation & modernization

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Political consensus creates solid basis for energy cooperation in the Arctic

Russia and Norway agree the borderline in the High North on April 27th 2010

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Upside potential

* Statoil’s view on gas demand

Power generation Residential and commercialIndustrial Other

Confidence in natural gas as a competitive long-term source of energy - despite some short-term challenges

•Gas for power generation driving gas

growth in US and Europe

•Gas power is effective, flexible and

predictable

•Near-term capacity decisions will lock-

in future fuel mix for power

•Statoil well positioned to capture

growth based on resources and position

European and US natural gas demand(bcm)

CAGR ~

1.25%

CAGR ~

0.45%

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Concluding remarks

•Statoil has a strong diversified gas portfolio

•Statoil has strong ambitions in developing Arctic gas resources

•Gas will play an important role in the transition to a more carbon-effective future

•Gas is the fuel of the 21st century

•Gas companies need to demonstrate the benefits to society of using natural gas in the energy mix