Freelance Graphics - 20683 2pdf - Norsk Hydro · PDF file2000 2005 2010 2015 ... (Fortum,...
Transcript of Freelance Graphics - 20683 2pdf - Norsk Hydro · PDF file2000 2005 2010 2015 ... (Fortum,...
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Executive Vice President Tore TorvundExecutive Vice President Tore Torvund
Norsk Hydro ASA December 14, 2000Norsk Hydro ASA December 14, 2000
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Direction October 1999: Actions taken:
Develop 4 - 5 internationalcore areas
Each with a productionpotential >50,000 boe/dayDeep water vs. low cost areasBalanced portfolio: NCS vs International diversification
Reduce finding and development cost tobelow 5 USD/boe
Increase production to800,000 boe/day
Strengthen Hydro'sposition as a gas company
Further developed existing core areas
Iran added as a potential core areaStronger focus on international exploration activity
Increased focus on lead time from exploration to development decisions. Ormen Lange of great importance
Production target within reach based on existing portfolio
Gas strategy under development
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Hydro is a technology driven company, with deepwater expertise and experience from operating inharsh environments
Hydro can offer a differentiated approach and has good tradition of co-operation with authorities
Hydro is a leading company in a successful oil province (NCS)
Hydro has the opportunity to ut ilise NCS assets in international swaps
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NorwayNorway
Barents SeaBarents Sea
West AfricaWest Africa
CanadaCanada
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BrazilBrazil
Gulf of MexicoGulf of Mexico
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Producing fieldsand reserves
Developmentof Technical
resources
Exploration
2000 2005 2010 2015
Pro
duct
ion
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Build on Hydro's NCS operator competencies
Secure access to an initial portfolio with long term field development and exploration potential
Pursue possibilities for co-operation with existing companies in the area
Focus on competitive fiscal and commercial environment
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2000 2002 2004 2006 2008 20100
50
100
1501000 bbl/dayCanada - production potential (NH-share)
Hibernia/Terra Nova
Hebron
Scotian Shelf/
Flemish Pass
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Producing fieldHibernia on stream(9.000 bbl/day)*
Fields under developmentTerra Nova production startsummer 2001 (20.000 bbl/day)*
Hebron - sanctioning expectedin 2003 (~ 15.000 bbl/day)*
High potential explorationacreage to be drilled in2002/2003
Scotian Shelf
Flemish Pass* (NH-share of plateau production)
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Block 18
$1*2/$
Luanda
9
3417
5
1
Open blocks
Norsk Hydro participation
0 10 20 30 40 50
Block 17
Greater Tulipa Area
Girassol - Dalia Area
JACINTO-1
MARGARIDA-1
GIRASSOL-1
GIRASSOL-2A
DALIA-1
DALIA-2DALIA-3
DALIA-4
ROSA-1
LIRIO-1
ROSA-2TULIPA-1
ORQUIDEA-1CRAVO-1
CAMELIA-1
JASMIN-1
Greater Rosa-Lirio
Area
Block 17
Fields under developmentGirassol on stream 4Q 2001(20.000 bbl/day)*Sanctioning of Dalia in 3Q 2001(20.000 bbl/day)*Concept selection Rosa/Lirio 2001
High potential exploration acreageBlock 34; Signing of PSA 1st/ 2nd Q 2001, Preparations for 1st well 2001Block 17; Drill remainingexploration wellsBlock 5; 3d seismic acquisitioncompleted, 1st well 2001Block 9; Dry well 2000 Next commitment well 2002
2000 2002 2004 2006 2008 20100
50
100
1501000 bbl/day
Girassol DaliaRosa, Lirio
Explor.
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Angola production potential(NH-share)
* (NH-share of plateau production)
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2000 2002 2004 2006 2008 20100
50
100
1501000 bbl/dayRussia production potential (NH-share)
Potential ShtokmanPechora
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Field in production - KharyagaFirst Russian oil under PSA agreement (1999)2nd phase was decided this month3rd phase to be decided 2002Total production 20.000 bbl/day * (Phase 1-3)
Field development potentialTiman Pechora ProjectShtokman Gas Development
Approved in Duma for PSA - producing fieldHydro participates in Western alliance (Fortum, Total/Fina/Elf, Conoco)
Exploration potentialPechora Sea co-operation with Gazprom
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* (NH-share of plateau production)
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Anaran: first exploration contract signed in Iran by a Western company
Abadan: rights to negotiate exploration opportunities
Hydro negotiates further co-operation with NIOC
Iraq-Saudi ArabiaNeutral Zone
KUWAIT
QATAR
BAHRAIN
UNITED ARABEMIRATES
OMAN
IRAQ
IRAN
OMAN
SAUDIARABIA
AFGHANISTAN
Ad Dawhah
Muscat
Baghdad
Tabriz
Kuwait
Teheran
Ahvaz
Bushehr
Shiraz
Bandar Abbas
Mashhad
Al Manamah
Herat
Riyadh
Strait ofHormuz
PersianGulf
ArabianSea
Gulf of Oman
TURKMENISTANCaspian
Sea
ARMENIA
PAKISTAN
AnaranExplorationBlock
Abadan PlainsStudy Area
Dehluran
2000 2002 2004 2006 2008 20100
50
100
1501000 bbl/dayIran production potential (NH-share)
Anaran
Potential
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1998 1999 2000 - budget 2001 plan0
200
400
600
800
1000
1200
MNOK
NorwayInternational
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Exploration drilling Around 15 exploration wells
PL 252 east of Ormen Lange with large potential
North Sea round Hydro will apply for new licences with significant potential
Award expected in February 2001
8% production increase expected for Hydro, NCS
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Plateau production : NH sharePlateau production : NH share 'HYHORSPHQW3'2 6XEPLWWDO3'2 $SSURYDO�6DQFWLRQLQJ6WDUW 3URGXFWLRQ
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Fields in production and under development
2000 2002 2004 2006 2008 20100
100
200
300
400
500
600
700
800
900
Thousands
Boe/day
Exploration
Resources to bedeveloped
Fields in production and under development
Resources to bedeveloped
Fields in production and under development
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Expected production in 2001 is around 435.000 boe/day
Stronger production development expected in 2002
5 new fields in production by year end 2001
Production start Ormen Lange 2006
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19901991
19921993
19941995
19961997
19981999
20000
500
1.000
1.500
2.000
2.500
3.000
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Maintained position as efficient operator and low cost producer on NCS
Marginal manning increase in spite of 50% production growth from 1998
No increase in cost per barrel in 2001, in spite of major fields on decline
Ambitious targets for 2001Ambitious targets for 2001
Installations/fields inproduction (RHS):
Hydro
Total manning(own employees):
Offshore Onshore
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Increased equity for operators gives stronger incentives for value creation
Hydro wants to strengthen position in operated fields
SDFI shares provides a basis for international asset swaps
Acquisition of SDFI shares is dependent on acceptable commercial terms
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2000 2002 2004 2006 2008 20100
100
200
300
400
500
600
700
800
900
Thousands
Boe/day
0
10
20
30
40
50
BCM/year
Oil
Gas
Strong growth in Hydro's NCS gas production
Liberalisationrepresents challenges and opportunities
Possible dismantling of Norwegian Gas Negotiations Committee (GFU)
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100
200
300
400
500
600
700
800
BCM
2WKHU
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European Gas Consumption
Source: WEFA
Gas the logical long term energy source for Europe
Main growth in gas for power
Cost competitiveness
Environmental friendly
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Russia Algeria NCS UK0
40
80
120
160
Lon g run mar ginal cost
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Transport is ke y cost element
New supplies from Russia/Al geria at substantial cost
Ormen Lan ge ready for production in 2006
Source: McKinsey, Hydro
Øre/Sm3
LNG - cost level
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high
low
18
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UK and Ireland supply - demand balance
The UK and IrelandSubstantial importrequired from 2004/5
Infrastructureestablishedthrough Vesterled
Future potential in Poland and Scandinavia
New infrastructure required
Kårstø
Rostock
Berlin
Gas pipeline to Scandinavia/Poland
2000 2002 2004 2006 2008 20100
30
60
90
120
150
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0
1
2
3
4
5
6
7
8
BCM
TradingAgri consumption / third party salesGas production/GFU sales
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Turnover European gas business 2000Turnover European gas business 2000
Interconnector
St. Fergus
Vesterled
Sluiskil
Oseberg
HeimdalFrigg
Bacton
UK
Denmark
Norway
Zeepipe
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Operating income - Trading
19961997
19981999
YTD 3Q-100
0
100
200
300
400
500
NOK million
Power tradingCrude Oil Trading
NGL TradingEuropean Gas Trading
Trading activity basedon sourcing to Hydro's industrial plants
Power (Aluminium)
NGL (Agri/Petro)
Gas (Agri)
Interconnector position and flexibility of contracts is key in gas trading
Market knowledge and trading skills in oil/ NGL/power/gas
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Low investments and high tolling rights
20% interest in investment and 50% in tollingSupplies gas and provides offtake of electricityPays a fee over contract period to partnerPartner builds and runs plant
Capitalise on commercial skills in both gas and power
Gas and power price differentials ("spark-spread") and utilising the flexibility of the plant
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GasGas
El. El.
TollingTolling
GasGasPlantPlant
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2 x 400 MW located atthe Hydro Agri site inSluiskil - Holland
Competitive project and site location
Favourable gas position at Sluiskil
Synergies at an existing site
Partner's desire to generate electricity locally
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Significant production growth from existing portfolio
Strong focus on cost performance and reduction of F&D cost as result of new developments
Positioned for SDFI shares - given acceptable commercial terms
Increased international activity by utilising experience from NCS
Positioned for a post GFU gas market
Increasing returns by utilising existing asset base in otherHydro business areas
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Certain statements in this presentation are or may constitute “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not in the nature of historical facts may be deemed to be forward-looking statements and may contain identifying words such as “believes,” “anticipates,” “plans,” “expects” and similar expressions. These forward looking statements are based on Hydro’s current expectations, assumptions, estimates and projections about the company and the industries in which it engages in business. All forward-looking statements involve risks and uncertainties. For a detailed description of factors that could cause Hydro’s actual results to differ materially from those expressed in or implied by such statements, please refer to its annual report on Form 20-F for the year-ended December 31, 1999 and subsequent filings on Form 6-K with the U.S. Securities and Exchange Commission.
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