Statoil Annual Report 1982 - Equinor
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\ \ \ \ Den norske stats oljeselskap a.s Annual report and accounts 1982
Transcript of Statoil Annual Report 1982 - Equinor
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Den norske stats oljeselskap a.s Annual report and accounts 1982
Den norske stats oljeselskap a.sContentsPage
3 Statoil’s financial result1972 - 1982
4 Statoil’s value added 1972 - 19825 Highlights7 Report of the Board of Directors
for 198219 Profit and loss statement for 198220 Balance sheet as of 31 December
198222 Comments to financial statements30 Insurance of Offshore Installations
and Onshore Facilities35 Articles of Association36 Wells drilled on the Norwegian
shelf in 198237 Survey of activities for the
consolidated companies38 Statoil interests in licences
allocated as of 1 January 1983
The Board of DirectorsChairman:Finn Lied, DirectorVice-Chairman:Fredrik Thoresen, Managing DirectorThor Andreassen, Managing DirectorBenedicte Berg Schilbred,Managing DirectorFinn T. Isaksen, Managing DirectorErling Haug, Licence ManagerAtle A. Thunes, Senior Project Engineer
Alternate members:Jan Skaar, DirectorGerd Schanche, HousewifeMargaret B. L. Sanner, Senior SecretaryHans Jacob Fevang, PlannerGunnar Langvik, Section ManagerJan Gerhard Thoresen,Procurement Manager
AuditorEndresen, Kiette & Co.,State Authorized Auditors
Company AssembleyChairman:Egil Aarvik, EditorVice-Chairman:Evy Buverud Pedersen,Trade Union SecretaryOdd Bakkejord, Trade Union SecretaryGrethe Westergaard-Bjørlo, TeacherBodil Bjartnes, AdviserEgil Flaatin, DirectorJohan Nordvik, MayorMartha S~ter, ClerkBjom Lian, Section ManagerAma Jørgensen, Economic CoordinatorVidar Thomassen, Systems EngineerLars Bakka, Legal Counsel
Alternate membersMv Jacob Fostervoll, County GovernorJohannes Andreassen,Administration ManagerRagnhild Midtbo, TeacherJan I. Holm, Marine AdviserTine IhIe, Senior SecretaryInger Helen Førland, Senior EngineerLars Sund, Research CoordinatorKjell Mork-Knudsen, Systems ManagerVictor Jensen, Procurement OfficerTrond Eilertsen,Junior Drilling SupervisorJan Rafdal, Senior Engineer
I EXECUTIVE COMMITTEE I
I — I —
I EXPLORATION &
TRANSPORTPRODUCTION I
Sen Vice Pres M Bekkehe Sen Vice Pres T Espedal
Cover photo:The three first stages of the Statoil headquartersin Stavanger are now finished. We see some ofthe employees gathered in the patio between thebuildings.
President A. JohnsenSen. Exec. Vice Pres. H. Ager-Hanssen
Exec Vice Pres Exec Vice Pres Exec Vice PresJ M Wennesland J En J Øxnevad
SAFETY, QUALITYASSURANCE
Manaaer 0 J Tveit
INFORMATION ANDPUBLIC AFFAIRS
RESEARCH ANDDEVELOPMENT
Manager W H Olsen
Sen Vice Pres R S Kvamsdal
LEGAL AFFAIRS
Manager J. S Middelthon
ECONOMY ANDADMINISTRATION
TECHNOLOGY ANDPROJECTS
Sen Vice Pres J E Larigangen
Sen. Vice Pres J M Huslid
PERSONNEL RESOURCES ANDORGANIZATIONAL DEVELOPM.
- Sen Vice Pres K E Egeland
REFINING ANDMARKETING
Sen. Vice Pr J E Sandvik
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Statoil’s financial result 1972 - 19821972 1973 1974 1975 1976 1977 1978 1979 1980 1981
Statoil’s financial result in 1982 was NOK 2,729 million before taxes.Estimated taxes are NOK 2,296 million.
The upper curve indicates the result before taxes during the period1972 - 1982, while the lower curve
shows taxes paid in 1981 and estimated taxes for 1982.
19823000
2500
2000
1500
1000
500
500
Statoil’s value added for the last 10 years
State, municipality: NOK 4,638 mIllion
DMdends: NOK 721 million —
Lenders: NOK 2,999 millIon — 22
Employees: NOK 1,068 million
.00/0
The company: NOK 4,225 mIllion — 30.9°/o
Statoil’s value added during he last 0 years amount toNOK 13,651 million. The distribution of the value added is illustrated above.
The Government’s dividends are the divdends paid for 1981plus the Board’s suggested dividends for 1982. Pai taxes, estimated taxes,
dividends paid and dividends suggested totalNOK 5,359 million during the period. In addition there are taxes deducted
for the employees of NOK 288 million.
Statoil’s first decade was characterized by thedevelopment of an organization designed to meet thelarge challenges of the oil and gas business. Know-how and decentralization are important aspects ofthis development.
The Statoil Group had 2,900 employees at the endof 1982. In addition to the parent company Statoil,the consolidated companies include Rafinor A/S atMongstad and Norsk Olje a.s, headquartered in Oslo.
The Statoil headquarters is in Stavanger; in addition the company has offices in Oslo, Bergen, Trondheim, Harstad, at Tysv~r and on Sotra. Statoil hasoffices abroad in Beijing (Peking), London andStockholm.
A Gullfaks production company has beenestablished in Bergen, in addition to a separate
exploration department. Statoil has a project office inAsker near Oslo. In Trondheim there is a departmentunder the Division for Technology and Development,and a department for research and development.There is an exploration and a drilling department inHarstad, and a production organization is beingplanned. Statoil has a drilling department on Sotra.At Tysv~r there is a project office and an operatingcompany for the Statpipe terminal. The operatingcompany for the pipeline and the riser platforms willbe set up on Karmøy.
Statoil is also engaged in base activities in Stayanger, Kristiansund, Brønnoysund, Sandnessjøen,Harstad and Hammerfest,on Sotra, at Florø, Tr~naand Andenes.
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HighlightsAmounts in millions of NOK
Profit and loss statementThe consolidated company Statoil
1982 1981 1980 1982 1981 1980
Operating revenue 16938 13681 8719 14326 11593 7151
Operating result 5747 3 839 1 463 5360 3679 1 392
Financial expenditure 2 332 1 734 656 2 138 1 565 548
Result before year end adjustments 3432 1 933 813 3235 1 950 848
Net income 402 1 019 203 433 1 052 223
Balance sheetThe consolidated company Statoil
1982 1981 1980 1982 1981 1980
Current assets 3886 2849 3 119 2 943 2 044 2 352
Investment capita 17714 13029 11474 16886 12178 10600
Current liabilities 6422 3748 3116 5849 3064 2447
Long term debt 11529 8631 9019 10455 7691 8090
Shareholder’s equity 3370 3 336 2 317 3521 3456 2 404
PersonnelThe consolidated company Statoil
1982 1981 1980 1982 1981 1980
Number of employees as of 31 Dec. 2 933 2 645 2335 1 660 1 362 1 059
Salaries and social costs 617 471 347 366 250 157
Other highlightsThe consolidated company Statoil
1982 1981 1980 1982 1981 1980
Investments 6 123 3 091 2610 5928 2953 2 465
Ordinary depreciation 859 679 489 707 531 352
Shares 2944 2944 2944 2944 2944 2944
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Report of the Board of Directors for 1982Introduction
1982 showed good results for theconsolidated companies. The resultbefore year end adjustments increasedfrom NOK 1,933 million in 1981 toNOK 3,432 million in 1982. The resuit after taxes was NOK 402 millioncompared to NOK 1,019 million theyear before. The reason for the reduced result after taxes is the increasein taxes as a consequence of previousyears’ deficit being covered in 1980and 1981.
FriggAt Frigg, 16.7 billion cubic metres
of gas were produced in 1982. TheStatoil share of the production was515 million cubic metres. The Statoiloperating result from Frigg wasNOK 342 million in 1982.
Development of North East Friggis on schedule and the field isexpected to be ready for production1 January 1984. Statfjord B went on stream on 5 November 1982.
Exploration andproductionStatfjord
In 1982, the average daily production of crude oil from Statfjord A was221,000 barrels compared to 162,000barrels in 1981. A total of 10.7 milliontonnes were produced from StatfjordA, of which Statoil’s share was 4.5million tonnes.
Statfjord B went on stream on 5November 1982. Increase in dailyproduction has been on schedule, andat the end of 1982 production reached82,000 barrels. The cost estimates forplatform B are some NOK 10.8 billion.
Construction of the Statfjord Cplatform is on schedule. The concretestructure was floated out from thedock in the spring of 1982 and slipforming was started. Lifting of deckmodules began in January 1983. TheC platform is scheduled to be readyfor production at the beginning of1986.
Based on the revised cost estimatesfor the B platform from 1981, the costestimates for the C platform were revised again at year end 1981. Thisresulted in a readjustment fromNOK 12.3 to NOK 13.1 billion.
The Statoil operating result fromStatfjord production was NOK 5.6billion in 1982.
MurchisonCrude oil production from the Mur
chison field was 5.3 million tonnes in1982, of which Statoil received about0.4 million tonnes. Statoil’s operatingresult was NOK 568 million.
Norwegian authorities gave permission to the Norwegian licensees inMurchison to land the Murchison gasin the UK. At the same time, it wasdecided to exercise the Norwegiangroup’s option to become a licenseein the pipeline from Murchison to theBrent field. From Brent the gas willflow through the Flags system to St.Fergus in Scotland.
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Gulifaks The construction of Statfjord C is on schedule.The Gullfaks development is a ma- Modules are being hoisted onto the deck at
jor task for Statoil. The company is Rosenberg Shipyard, Stavanger.operator and has an 85 per cent shareof the field. The total recoverable reserves are estimated at 210 milliontonnes of oil and 29 billion cubicmetres of gas.
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The drilling rig Neptuno Nordraug inthe Midnight Sun on Tromseflaket in thesummer of 1982.
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Exploration activity in theSleipner area has beenextensive in 1982. We see anartist’s impression of athree-dimensional map overthe area. The red part isfilled with gas, the yellowwith water. The figure iselongated vertically to betterillustrate the shape of thestructures.
Spudded exploration and delineationwells on the Norwegian continentalshelf.~ Other companies operator~ Statoil operator
III1978 1979 1980 1981 1982
Phase 1 of the field developmentincludes two platforms. The GullfaksA platform is an .integrated drilling,production and quarters platform,which is scheduled to go on stream in
50 1987. Pre-engineering of the A platform was ready in 1982 and detail engineering of deck and modules was
40 started. Contracts for building of concrete structure, outfitting of shafts aswell as building of the quarters area
30 have been signed. The total investment costs for the A platform are estimated at NOK 15.9 billion.
20 The Guilfaks B platform is an integrated drilling and quarters platform, which is scheduled to go on
10 stream in 1989. The B platform willhave a concrete base structure. Thepreliminary cost estimates for the Bplatform are NOK 12.1 billion.
Development of Gullfaks is onschedule both as regards time andprice. The Guilfaks production company was established in Bergen inJuly 1982.
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HeimdalThe Heimdal development is on
schedule, with Elf Aquitaine Norgea.s as operator. Statoil owns 40 percent of the field. Pre-engineering wasready in 1982 and detail engineeringis in progress. All major building contracts are signed.
The dry gas from the Heimdal fieldhas been sold to buyers on the Continent and will be transported throughthe Statpipe Norpipe system. Condensate will be sent through the pipeline to the Brae platform in the British sector and from there on throughthe Brae-Forties system to CrudenBay in Scotland.
The operator presented a revisedcost estimate of NOK 9.2 billioncompared to previous estimates ofNOK 7.8 billion. The reason for thisincrease is that a large part of theplatform work must be carried outoffshore. Production start is scheduled for summer 1986.
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UlaThe Ula field, in block 7 12, is lo
cated about 65 kilometres north ofthe Ekofisk area. British PetroleumDevelopment of Norway (BP) is operator, and Statoil owns 12.5 per cent.The estimated recoverable reserves ofthe field are 21 million tonnes of oiland slightly more than 1 billion cubicmetres of gas.
In the autumn of 1982, the operatorpresented a revised plan for the Uladevelopment with a cost estimate ofclose to NOK 12 billion. In addition,there are investments in an oil transportation system. Based on the revised development plan, Statoil decided, in December 1982, to participate in the field development.
1000 —
The field is planned with threesteel platforms, one for each of thefollowing three functions: production,drilling and quarters area. The gaswill be transported via Cod to Ekofisk and further on through Norpipe’sgas pipeline to Emden in West Germany. Oil will be piped via Ekofiskto Teesside.
K118 - L/16The K/18 and L 16 blocks are on
the Dutch continental shelf. The Norwegian Parliament decided to letStatoil exercise its option to participate in these blocks with a share of7.5 per cent, which the company didin July 1982.
In December 1982, the StatoilBoard of Directors decided to participate in the development of K! 18 inaccordance with the developmentplans worked out by the operator,Conoco. These plans include a drilling platform and a production platform, as well as a pipeline to theHelder field. From Helder, the oilwill be transported ashore through anexisting pipeline. The developmentcosts are estimated at about NOK 1.8billion. Production start is scheduledautumn 1984.
Exploration for Oil and GasIn 1982, there have been drilled
more exploration and delineationwells on the Norwegian continentalshelf than in any previous year. Atotal of 48 wells were spudded, ofwhich Statoil is operator for 15. Tocarry out this drilling programme,Statoil used up to five rigs at thesame time.
In addition to new discoveries inthe Sleipner area and on Tromsøflaket, gas was found in the blocks30 2 and 30 3.
As part of the fifth round of concessions, six new licences wereawarded north of the 62nd parallel in1982. Statoil became operator for oneblock on Haltenbanken and one onTromsøflaket. In the seventh round ofconcessions, Statoil was given theoperatorship for two blocks onTr~nabanken. Statoil owns 50 percent in all these licences.
The seismic surveys were also extensive in 1982. To carry out theplanned exploration programme,Statoil has entered into a long-termcontract with Geco for chartering of aseismic vessel from March 1982.
The Sleipner AreaStatoil explored the Sleipner area
extensively in 1982. Two wells in theeastern structure in block 15 9 haveconfirmed the interesting discoverymade in 1981. One well, drilled in thesouthwestern part of the block, wasdry, while a discovery was made in
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The crew on board the Dyvi Delta prepare a test on block 30/2.
the southeastern part. The reserves ofthe last discovery have not yet beendecided. Statoil’s estimates for recoverable reserves in the Sleipner areaare about 170 billion cubic metres ofgas and 70 million cubic metres ofcondensate. Negotiations for the saleof gas are in progress.
TommelitenEarlier, gas/condensate has been
proven in the two separate structuresin Tommeliten, where Statoil is operator. One well was drilled in the northern structure in 1982, and it will probably lead to a readjustment of the reserve basis. Statoil is currently working on field development studies.
OsebergOn 1 April 1982, Norsk Hydro
took over the operatorship for block30 6 after Statoil had drilled sixwells. Later, three more wells havebeen drilled in Oseberg. A fourth
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The activity at the supply bases increases, here atNorbase in Hammerfest.
well, which was dry, was drilled in aseparate structure in the block.
Licence 079, which includes theparts of block 30 9 that are part ofthe Oseberg structure in block 30 6,was in 1982 awarded to Norsk Hydro,Saga Petroleum and Statoil, withNorsk Hydro as operator. Statoil’sshare of licence 079 is 70 per cent. Afive per cent share was retained for apossible new Norwegian company. In1982, the operator drilled and testedone well in block 30 9. The recoverable reserves of the complete Osebergfield are estimated at 90 million tonnes of oil and 50 billion cubic metresof gas, of which about 30 per cent arefound in block 30 9.
Work on the commerciality declaration and the field developmentplan is in progress.
TrollAt the end of 1982, the operator,
A S Norske Shell, had drilled ten
wells in block 31 2, of which ninewere on the Troll field. The total recoverable gas reserves are estimatedat about 400 billion cubic metres.
The results from drilling and ongoing field development studies indicate that only oil from the westernpart of block 31 2 is commercial.Phase 1 of the development willtherefore probably be based on acombined gas and oil productionfrom one platform. The operatorplans to present a commercialityreport in 1983 84.
The Troll field stretches over fourblocks, of which only 31 2 has beenawarded. The total recoverable reserves may be about 1,600 billioncubic metres of gas. Half of thereserves are probably found in block31 6. The Government has suggestedStatoil as operator for blocks 31 3and 31 5, and Norsk Hydro as operator for 31 6. For all blocks, theGovernment suggests an ownershipdistribution of 85 per cent to Statoil,9 per cent to Norsk Hydro and 6 percent to Saga Petroleum. Statoil hasunderlined to the authorities the particular importance of block 31 6, andsaid that it would be natural to giveStatoil the operatorship of this particular block.
TromsøflaketStatoil proved the Askeladden field
in block 7120 8 on Tromseflaket in1981. During summer 1982, the discovery was confirmed by a new wellin the southern part of the structure,at the same time as new discoverieswere made in the adjacent blocks7120 7 and 7120 9. More than 200billion cubic metres of gas have beenproven in the area.
Statoil has initiated studies to findpossible technically and economicallyfeasible development alternatives forAskeladden and adjacent fields.
Supply Base ActivitiesIn 1982, Statoil was engaged in
supply base activities in Hammerfest,Harstad, Kristiansund, Stavanger andon the island of Sotra. These supplybase activities have been increasing.
In connection with the start-up ofexploration drilling on Tr~nabankenin 1983, Statoil has been engaged insupply base projects in Helgeland, inthe county of Nordland. Statoil owns50 per cent in a limited company thatwill establish a supply base in Sandnessjøen and a helicopter base inBrønnøysund. Statoil has also agreedwith the Tr~na municipality to establish an oil contingency depot.
Together with Norsk Hydro, Statoilhas agreed with the Harstad municipality to rent an area of 40 decares(10 acres) to establish a permanentsupply base in Harstad.
The Coast Center Base on Sotrawill serve as supjly base for the Gullfaks development and the fourthphase has been approved for construction. Statoil has appointed Florøas the supply base for bulk supplyand pipe storage. In 1982, Statoil decided to participate as shareholder ina base company in Flora municipality.
TransportationStatpipe
Development of the Statpipe gastransportation system is on schedule.A pipeline for rich gas will be laidfrom Statfjord to Kârstø, where thewet gas will be separated at a terminal and stored for shipment. Dry gaswill be transported through a pipelineto Ekofisk and further on through theNorpipe system to the Continentalbuyers. Total investment costs in Stat-pipe are estimated at NOK 20.3 billion. The system will go on stream on1 January 1986.
Pre-engineering of pipelines andriser platforms was ready in 1982. Detail engineering is now in progress.Deliveries of pipes started in the firsthalf of 1982. In June, coating of concrete started in Esbjerg, Denmark andat Andalsnes, Norway. The riser platforms are under construction. At theKalsto landfall on Karmoy, the pipeline will be protected in a concretetunnel, built in the autumn of 1982.
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The Statpipe gas gathering system will tieStatfjord and Gulifaks directly to theContinental buyers via the Norpipe system fromEkofisk to Emden.12
The gas pipeline fromStatfjord and Guilfakscomes ashore at Kaiste onKarmey. A concrete tunnelprotects the pipeline againstthe waves in the hostileseashore area.
Site work at Karsto is wellunder way. The area wherethe terminal will be built hasbeen levelled and thefoundation work has started.
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Pipe for the Statpipe systemis loaded in Japan - andunloaded at Andalsnes,Norway.
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Norol’s market share
IIIIIIII
1979 1980 1981 1982
Development of crude oil prices(Arabian light)
Current pricesReal prices, in accordance withOECD’s price index Dollars
per barrel35
In 1982, work on the onshore pipelineroute to Karsto has been concentratedon the tunnel under the fjords ofKarmsundet, Førdesfjorden and Forlandsfjorden. This work is ahead ofschedule.
In 1982, sites have been bought atBygnes on the island of Karmoy forbuilding of a control centre for theplatforms and pipeline.
Pre-engineering of the terminal isready and detail engineering has
300/ started. Levelling work on the termi° nal area at Kârsto is nearly finished.
It has been decided not to build an28°! ethane separator at Kársto for the° time being. Instead, ethane will flow
with the dry gas to the Continent.26% Norpipe
In 1982, Norpipe a.s and Norpipe24°! Petroleum UK Ltd. had a total turn-over of about NOK 3,020 million and
this gave a profit after taxes of22°! NOK 225 million. Statoil received
° NOK 137 as a dividend of its 50 percent share in the two companies.
20% Operation of the pipeline systemwas satisfactory. There was a certaindecline in transported quantity as aconsequence of reduced Ekofisk production. To Teesside 14.8 million tonnes of crude oil were transported, areduction of 10.8 per cent over 1981.To Emden 13.2 billion cubic metresof gas were transported, which is 1.5per cent less than in 1981.
Statfjord TransportIn 1982, 106 cargoes of crude oil
were transported from the Statfjordfield to various ports in NorthernEurope. Offshore loading wassatisfactory, with a regularity of nearly 100 per cent. Statfjord Transporthas four tankers at its disposal an~1has entered into a long-term charteragreement of one more ship, which isexpected to be delivered in themiddle of 1983.
5 Refining and MarketingSale of Crude Oil
In 1982, Statoil’s total access tocrude oil was 7.2 million tonnes. Ofthis, 2.5 million tonnes were royaltyoil bought from the state at marketprice (norm price).
About 2.4 million tonnes ofStatoil’s crude oil were deliveredthrough the refinery at Mongstad.The remainder was sold, mainly tocustomers in Northwestern Europe.
The international market for crudeoil was relatively weak in 1982, with alow demand and high supply. Themarket was kept in a fair balance,mainly by OPEC’s production regulation. The weak demand is due tolow economic activity, energy conservation, stock decline and transfer
to other sources of energy. Global oilconsumption was about four per centless than in 1981. There is expected tobe a decline in the demand for oil in1983, too.
OPEC introduced a new production regulation in March 1982. Maximum total OPEC production wasfixed at a daily average of 17.5 million barrels, which was distributedamong the different membercountries. Some OPEC countriesexceeded their quotas during the year,but Saudi Arabia had a low production to keep OPEC’s total productionin a fair balance with the demand.
Through the year, OPEC maintained the reference price of USD 34per barrel for Arabian Light.
At the beginning of 1982, the contract price for North Sea oil wasabout USD 37 per barrel. During thefirst half of 1982, the producers reduced their prices by three dollars perbarrel to about USD 34 per barrel.This price level was maintained in thethird and fourth quarters of 1982.
Due to the increasing dollar exchange rate, the oil price in Norwegian currency rose from NOK 1,626per tonne in January to NOK 1,854per tonne in December.
Refining, and Sale ofRefined Products
The operation of the Mongstad refinery has been satisfactory with a capacity use of 74 per cent, whichensures a maximum upgrading ofheavier products to lighter ones.
To meet the demands of the authority concerning reduced lead content in petrol, the owner companieshave started building a facility forproduction of super petrol with a lowlead content. The facility is scheduledto be ready for operation in the autumn 1983, and it is estimated to costabout NOK 120 million.
The Statoil Group exported morethan one million tonnes of oil products from the Mongstad refinery in1982. The export includes mainly theproducts naphtha and gas oils, whichwere mostly sold on a contract basisto companies in Western Germany,the U.K. and The Netherlands.
The Statoil Board of Directors decided on 16 December 1982 to expand the refinery to 6.5 million tonnes per year and to build a crude oilterminal at Mongstad. The expansionwill increase the upgrading capacityof the refinery, which will result in abetter exploitation of the low-sulphurNorth Sea oil. After this expansion,the refinery will be in a strong position from a competitive point of view,compared to other Western Europeanrefineries. If the authorities approvethe expansion plans in the spring of1983, the enlarged refinery and the
7273 7475 76 77 7879 8081 82
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crude oil terminal will be ready forproduction in 1988.
Norsk Olje a.sIn Norway, Norsk Olje a.s (Norol),
handles all marketing of the consolidated companies’ refined products.
Total domestic sale of petroleumproducts was 6.5 million tonnes. Thiswas an decline over 1981 of abouttwo per cent. Norol’s market sharefor sale of refined products in Norway increased from 26.2 per cent in1981 to 26.6 per cent in 1982.
Norol’s sales amounted toNOK 5,844 million, and a net incomeof NOK 39 million after taxes. Theoperating result for 1982 wasNOK 395 million. This is a considerable improvement compared to 1981.The result improvement is due partlyto inventory profits and partly to regulation of prices to consumers instep with the increase of the dollarexchange rate, while the increase inproduction cost did not have an effectbefore two to three months later.
Norol’s investments in 1982 wereNOK 160 million. They are mainly innew petrol stations and a strengthening of the distribution net work. Inaddition a marketing test with petrolmixed with methanol was initiated.About 600 people in Tromsø, Stay-anger and Hamar take part in the test.
Sale of GasIn 1982, Statoil sold 5J5 million
cubic metres of gas from the Friggfield to the UK.
The final agreements for sale of gasfrom Statfjord, Heimdal and Guilfakswere signed with various buyers onthe Continent.
The Western European gas industryis now investing considerable sums ina new infrastructure to be able tooffer gas to more consumers in thefuture. Therefore people in WesternEurope will increase their use of gasfor domestic purposes, where thegood quality of the gas can be betterexploited.
Statoil’s total access to wet gas wasabout 40,000 tonnes in 1982. Thesales value for the wet gas was satisfactory.
PetrochemicalsThe marketing conditions for plas
tic raw material grew worse in 1982compared to 1981. The market pricesare low. Statoil’s share of the petrochemical activity at Bamble gave anegative operating result of 12 millionin 1982.
The production at Noretyl has beenvery satisfactory from a technicalpoint of view. At Norpolefin’s facilities, considerable improvements inproduct quality and regularity wereachieved compared to 1981.
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Top:The Mongstad refinery, anartist’s impression after theexpansion suggested byStatoil
Middle:The Statfjord field in.January 1983. M/Tiarenathe newest Statfjord tanker,at the Statfjord A loadingbuoy. Behind the buoy wesee the Statfjord A platform,and left, at a distance,Statfjord B.
Bottom:Statoil and Norol havestarted a marketing test withpetrol mixed with methanol.The Norol petrol station atHinna near Stavangersupplies test cars with themixture.
The results of the Statoil petrochemical activity is still not satisfactory. It will be necessary to take furthersteps to improve the profitability.
Other activitiesSurveys
Statoil contributed to the work ofthe Ministry of Petroleum and Energywith an analysis of perspectives forpetroleum activities over the next fewyears. Statoil’s analysis is an appendixto Parliamentary Report No. 40(1982 83). During the year, meetings
Within the ‘Northern Norway Programme’ Statoil has also carried outstudies of transportation alternativesand possibilities for use of gas if itshould be landed in Northern Norway.
Transportation of oil and gas in thesame pipeline can give increased profitability of field development. Statoilhas been working on several projectsrelated to two phase transportation ofpetroleum. Furthermore, Statoil contributed to the establishment of petroleum technical research centres inTrondheim and Stavanger. These
safety and contingency research werefinished in 1982. Statoil was engagedin implementing these programmes.
Organization andEnvironmentWage and Labour Relations
The cooperation between the operating companies on the Norwegiancontinental shelf has been considerably strengthened through the Norwegian Employers’ Association for Operating Companies (NOAF). NOAFcarried out long negotiations with the
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The final agreements for saleof Statfjord gas toContinental buyers weresigned in Stavanger inNovember 1982. Total valueof the gas in the Statpipefields Statfjord, Heimdaland Guilfaks is estimated atalmost NOK 150 billion.Klaus Liesen, Chairman ofthe Ruhrgas AG Board ofDirectors, (left) and ArveJohnsen, President ofStatoil.
were held with the Skânland Committee and the Mellbye Committee,which are preparing reports of thevarious aspects of the oil business.Research and Development
Statoil’s efforts within petroleumrelated research and developmentwere kept at a high level of activity.
Statoil has been working on an industrial development programme fordeep sea technology, particularly withrespect to production equipment forTroll. Special emphasis has been puton developing platform equipmentand seabed installations.
In phase I of the programme, nearly 100 Norwegian companies and research institutions have been asked topresent suggestions for the project. Inthe next phase, some of these ideaswill be further developed.
centres will be important resourcesfor future petroleum geared researchin Norway.
Safety and Quality AssuranceStatoil’s work with safety and
quality assurance was above all concentrated around the company’sdrilling activity and Statoil’s largedevelopment projects, Gullfaks andStatpipe. The company’s quality insurance system was used and furtherdeveloped in connection with thecompany’s large development projects. In all the company’s projects anumber of quality and safety revisionswere carried out.
The company was engaged in projects concerning well control and oilcontingency.
The large public programmes for
Operator Employees’ Association(OAF) without the parties’ reachingan agreement. The matter was decided by the National ArbitrationBoard in December 1982.
Negotiations about wage regulationwith the employee organizations, theNorwegian Society of Chartered Engineers (NIF), the Norwegian Oil andPetrochemical Trade Union(NOPEF), the Norwegian Society ofEngineers (NITO), and the Norwegian Office Workers Association(NF), were brought before NAF andthe trade unions centrally before theparties reached an agreement.Employees and Work Environment
At the end of 1982, there was atotal of 2,933 employees in the consolidated companies. The number ofemployees in Statoil was 1,660.
u~~ /&:~/E~I
I-——
J
1~
I’.p
16
Statoil carried out training withinvarious fields. Furthermore, internaltraining for managers was developed.Several of the company’s female employees get further education with financial support from Statoil.
For training of operating and drilling personnel in managing positions,Statoil has personnel stationed withother oil companies in Norway andabroad. To secure recruitment ofqualified operating personnel for theGullfaks production company, Statoildecided to start a separate trainingcourse as a supplement to ordinarytraining.
The company and Work Environment Committee had many meetingswith a number of important matterson the agenda. In particular, thedevelopment of the Gullfaks andStatpipe operating organizationsshould be mentioned.
The Board of Directors wishes tothank all employees for valuableeffort and good cooperation in 1982.
Organization and AdministrationStatoil’s organization chart is
shown on page 2.In accordance with the aims of the
authorities to spread oil activities,Statoil has continued decentralizingoperative functions. Statoil’s production company for Gullfaks is beingestablished in Bergen. The Statpipeoperating organization has been setup at Kârsto and on Karmøy. A separate drilling department was established in Harstad in 1982.
After an application from Statoil,the Ministry of Local Governmentand Labour decided to remove thecompany’s upper limit of employeesin Stavanger.
It has been decided to establish aseparate subsidiary in the Netherlandsto take care of the company’s interests in blocks K/18 and L 16.
Economy and FinancingThe Accounts for 1982
The Statoil Group’s total sales in1982 were NOK 16,769 million, ofwhich NOK 9,610 million was export.This gives a sales increase of 24 percent. The growth was mainly due tothe increased production from theStatfjord field and the high dollar exchange rate.
The consolidated profit and lossaccount showed an operating result ofNOK 5,747 million. The annual netincome after deduction of minorityinterests was NOK 402 million. TheStatoil accounts show an annual netincome of NOK 433 million.
The Board of Directors proposesthat the net income for 1982 is usedin the following manner:
Net income 1982Brought forwardfrom 1981
NOK 452 millionNOK 89 millionNOK 353 million
Carried forwardto 1983 NOK 10 million
For 1982, remuneration to theBoard of Directors was NOK 166,200,to the Company AssemblyNOK 100,785 and salary to the Stat-oil president was NOK 508,910.
The Statoil Group invested in 1982NOK 6,123 million, of which Statoil’sown investment was NOK 5,928 million. The major part of the investmentwas made in Statfjord, Statpipe andGullfaks.
Reference is made to the accountswith comments.
FinancingThe currency markets were char
acterised by a gradually strongerAmerican dollar during the year. Thedecrease of the interest rate in theUSA during the second half year wasfollowed by corresponding interestrate reductions in other importantcountries. Consequently, the difference of the rate of interest betweenthe dollar and other currencies didnot change much during this period.Compared to Norwegian kroner, thedollar increased from aboutNOK 5.80 at the beginning of theyear to about NOK 7.30 in November. At the end of 1982 the exchangerate was about NOK 7.06.
The major part of Statoil’s foreigncurrency debt is in dollar. Repaymentof these loans will mainly take placeduring the period from 1983 to 1989.As a consequence of the increasedvalue of the dollar in 1982, a furtherNOK 1,076 million was allocated tocover unrealised currency loss onlong-term loans.
The high rate of the dollar gives increased income in kroner from thesale of petroleum. In total, Statoilbenefits from a high dollar exchangerate.
Statoil’s interest expenses in 1982were about NOK 918 million. Thisgives an average interest rate of about10 per cent.
Statoil’s total need for capital in1982 was NOK 4,960 million. Of this,NOK 2,354 million came from internal sources, while NOK 2,606 millionwas financed by an increase of long-term debt. Loan repayments wereNOK 299 million.
As operator, Statoil has carried outcomprehensive work in connectionwith export credit loans to financeforeign deliveries to Statpipe and
Development of crude oil price in 1982NOK per tonne
2000
4,00
The consolidated investments in1981-1982 and estimated investmentsin 1983-1984Billions of NOK
15
NOK 433 million
NOK 19 million
Reserve fundDividends
JFMAMJ J ASOND
Development of USD in 1982Kroner per dollar
8,00
7,00
6,00
5,00
J F MA M J J A SO ND
10
i i :1981 1982 1983 1984
17
Gullfaks. Furthermore, the companyhas entered into agreements for export credits for Heimdal and NorthEast Frigg.
In the revised national budget for1982, the Government gave Statoil theopportunity to borrow NOK I billionfrom Norwegian banks and credit institutions. During the autumn thecompany used this opportunity.Statoil made a public bond issue ofNOK 200 million.
of the world. In the Board’s opinion,the crude oil price will increase on along-term basis.
The fluctuations of the dollar exchange rate will influence the Statoilfinancial results. The rate was high in1982, which gave Statoil increased income.
As a consequence of a certain increase in production, Statoil’s Boardexpects a moderate increase in company income in the years to come.1983 will be the first complete production year for the Statfjord B platform.
The Group’s refining will also givean increasing operating result in theyears to come. However, the petrochemical activity will continue to givenegative operating results, eventhough there are some signs of improvement.
Against this background, a moderate increase of net income is expected
- .--.
-~ ~~••• ~~)Y
1 ~
The Statoil Board of Directors in January 1983. Seated, from left to right: Benedicte BergSchilbred, Finn Lied and Fredrik Thoresen. Behind, from left to right: Thor Andreassen, Finn T.lsaksen, Atle A. Thunes, Erling Haug and Arve Johnsen, President.
in the years to come. However, theBoard would like to underline the uncertainty of tife situation.
Guilfaks and Statpipe will continueto be major development projects, butStatfjord and Heimdal will also demand considerable investments. Theinvestments of these four development projects will make up 85 percent of the Group’s total investmentsin 1983, estimated at NOK 12 billion.
To carry out the investment programme, it will be necessary to arrange new long-term loans of considerable amounts. Financial charges willconsequently be a major item in theStatoil accounts.
Projects will give large income,mainly in dollars. Due to the currencyrisk it will be appropriate for thecompany to arrange the major part ofthe loans in the same currency.
The consolidated companies’ resultbefore taxes and the distributionoptional. Actual result for 1981—1982and expected result for 1983—1984.
El Taxes~ Dividends~ Reserve fund
Fredrik ThoresenVice chairman
Erling Haug
ProspectsThe crude oil market is character
ised by low demand and high supply.On a short-term basis this may forceprices down. The contract price forNorth Sea oil was reduced byUSD 3.50 to USD 30.50 per barrel,effective from 1 February 1983.
However, the American economyshows signs of improvement. A risingbusiness curve may spread to the rest
L4
In billionsAccumulated loss of NOK
4
I1981 1982 1983 1984
Thor Andreassen
Stavanger, 24 February 1983
Finn LiedChairman
~Th
Benedicte Berg Schilbred Finn T. Isaksen
Atle A. Thunes
Profit and loss statement for 1982Amounts in millions of NOK
The consolidatedcompanies Statoil
- 1982 1981 1982 1981
- - 16769 13499 14283 11547• - 169 182 43 46
- 16 938 13 681 14 326 11 593
• • 5 882 4 942 5 035 4 769• • - - • • 617 471 366 250
• • 3 984 3 495 2 945 2 305- • 859 679 707 531
21 13 2• - - - — 172 242 — 89 59
I.- . . 11191 9842 8966 7914•. - 5 747 3 839 5 360 3 679
• • • - - -. 139 92 138 92• • • • - 434 219 384 181
• • • ••• • •• - 2 3- - • - • • - - • 2 905 2 045 2 658 1 835
• - • 2 332 1 734 2 138 1 565-- • • - •• • • - 3415 2105 3222 2114
• 19 3 13 1• • 2 175 ______ 165
- ••. - - 17 172 13 164
• • • - • - 3 432 1 933 3 235 1 950
• - • 2314 352 2296 350• • • - • -. - - • 579 540 513 548
•- ---i-i - 127 ____ —7 ____
• - - - - • -• - 3 020 892 2 802 898
• - 412 1 041 433 1 052• -- -- • 10 22
• •••-• • •• - -- 402 1019
Consolidated balance sheet as of 31 December 1982Amounts in millions of NOK
The consolidatedcompanies Statoil
1982 1981 1982 1981
383 258 110
4 41 616 1 317 981 614
• •- 471 452• - • - - -• - 604 486 559 518
- - 449 138 446 138
•• 830 _____ 646 376 281• 3 886 2 849 2 943 2 044
• •- - 295 295• - • •. 491 488 489 486
• - -. 75 75 40 37
• •• • 9741 5669 8881 4738• • •• - 6 842 6 288 6 780 6 269
77 85127 107 112 98361 317 289 255
17714 13029 16886 1217821600 15878 19829 14222
Stavanger, 24
Finn Lied Fredrik Thoresen Thor Andreassen Finn T. IsaksenChairman Vice-Chairman
Benedicte Berg Schilbred Erling Haug Atle A. Thunes
The consolidatedcompanies Statoil
1982 1981 1982 1981
~j Liabilities and shareholder’s equityCurrent liabilitiesShort-term bank creditsProvisions for taxationInterest incurred, not dueSuppliersDebt to subsidiariesCalculated taxesOther short-term debtNext year’s installment on long-term liabilitiesTotal current liabilities
Long-term debt (18)Export creditsBank loansBonds and notes outstandingLoans from the Norwegian GovernmentCurrency risk fund (19)Other long-term debt (20)Subordinated debtNext year’s installment on long-term liabilitiesTotal long-term debt
Conditional tax-free allocationStock valuation reserveRegional development fundClassification fundConsolidation fundTotal conditional tax-free allocationsMinority interests
Shareholder’s equityCompulsory shareholder’s equityShare capital: 29,435,000 shares at NOK 100 eachReserve fund
Free shareholder’s equityBrought forward as of 1 JanuaryNet incomeTotal shareholder’s equityTotal liabilities and shareholder’s equityContingent liabilities, joint and several liability,etc. (21)
ebruary 1983
60 78 1465 353 226 121168 121 155 111
1 393 995 1 304 90645 29
1 187 150 1 169 1492123 1644 2028 14441 026 407 922 3036422 3748 5849 3064
661 370 613 3624 980 3 468 4 327 2 8922446 2222 2367 21372412 2102 2331 20221 643 504 1 553 477
339 274 186 10474 98
— 1 026 407 — 922 30311529 8631 10455 7691
79 172610 1
9124 18155 145
2944 2944 2944 2944125 125
—101 —627 19 540402 1 019 433 1 052
3 370 3 336 3 521 3 45621 600 15 878 19 829 14 222
177 175 145 138
Arve JohnsenPresident
Comments to financial statementThe consolidated financial statements are founded on the same accounting principles as are applied to the parentcompany. In addition to Statoil, the consolidated financial statements include Norsk Olje as, where Statoil has a 73.62 percent share, Rafinor A/S & Co., of which the consolidated companies own 164/230.
Accounting principlesThe following items are charged to the profit and loss account• Expenditures concerning licences in the exploration phase.• Expenditures for research, special studies and development projects.• Interests and other financial expenditures.
The following items are capitalised and subject to later depreciation• Expenditures related to commercial fields where Statoil has exercised its option to participate in field development
DepreciationOrdinary depreciation on offshore facilities is in accordance with the unit of production method. According to this methodthe annual ordinary depreciation percentage appears as the relation between the annual production amount and the totalestimated, recoverable reserves of the field reduced by a safety margin of 15 per cent. Further depreciation, calculated asthe difference between the 6 year depreciation according to the Norwegian Petroleum Revenue Tax Act and the unit ofproduction method, is found under year end adjustments in the consolidated profit and loss statement.
Ordinary depreciation of fixed assets onshore are estimated on the basis of their expected life. Any provision for taxdepreciation of these assets will be booked under year end adjustments.
Conversion principles for foreign currencyItems in foreign currency are converted into Norwegian kroner(NOK) according to the following principles:• Revenues and expenditures are converted into Norwegian kroner (NOK) according to the prevailing exchange rate at the
time of payment.• Current assets and current liabilities are converted at the rate of exchange prevailing as of 31 December.• Fixed assets are entered at the prevailing exchange rate at the time of procurement.• Long-term debts are converted at the exchange rates prevailing when the loans were drawn. If the debt calculated
according to the rates of exchange for all currencies as of 31 December is higher than the comparable booked debt, aprovision is made for an amount equal to the difference, and at the same time the amount is expensed as a financialcost. Realised currency losses are charged under financial costs to the extent they are not covered by previous provisions. Currency gains are charged as income only when such gains are realised in connection with payment of debt.
Partnerships and limited partnershipsStatoil’s shares in partnerships and limited partnerships are included in the respective items in the statement of profit andloss and in the balance sheet.
In the limited partnerships in which Statoil participates, the partners, according to existing accounting agreements, havethe right to audit the operators’ accounts within two years after the end of the financial year. Corrections which might bethe consequence of such audits will, in Statoil’s accounts, lead to changes in a later year.
InventoriesInventories of crude oil, petroleum products, and equipment are valued at the lower of purchase production cost or netmarket price.
Principles used for consolidating companies• Shares in subsidiaries are eliminated using the past equity method. Possible surplus value which is a result of the
elimination is charged to the corresponding assets and is depreciated accordingly.• Internal current accounts, internal sale, internal gains, and other internal transfers are eliminated in the consolidated
balance sheet and the consolidated statement of profit and loss.
Notes to financial statements for 19821. Sales are distributed as follows:
Millions of NOK The consolidated companies Statoil1982 1981 1982 1981
NorwayCrude oil and gas 1 808 945 1 808 945Refined products 4 520 4 485 3 297 3 431Petrochemical products, etc 831 574 244 219
ExportsCrude oil and gas 8227 5233 8227 5233Refined products 949 1 891 273 1 348Petrochemical products, etc 434 371 434 371
16769 13499 14283 11547
2. The item, other revenues, refers to rental income, NOK 142 million and sale of seismic data, NOK 27 million.
3. For Statoil, the item includes royalty to the state in the amount of NOK 1,034 million. For the consolidated companiesthe item also includes NOK 622 million in petrol tax. Exploration costs of NOK 441 million are part of this item.
4. Amount allocated to cover possible loss on receivables.
5. Statoil’s dividends received refers to dividends for the financial year 1981 of NOK 88 million from Norpipe a.s and NOK33 million from Norpipe Petroleum UK Ltd. In addition, advance dividends of NOK 6 million for 1982 from NorpipePetroleum UK Ltd. are included. An additional sum of NOK 10 million for tax credit on dividends for the years 1979 - 1982is included, according to the tax agreement between Norway and the U.K.
6. Extraordinary income applies mainly to settlement after changed cost distribution in the petrochemical industry, as wellas compensation for previous volume deficiency of gas.
7. According to the Norwegian Petroleum Tax Act, crude oil is taxed at norm price at the time of production. This resultsin taxation of unrealised income in periods of inventory build-up. Tax on unrealised income in 1982 amounted to NOK 270million.
8. Provision for tax depreciation is distributed over the offshore production facilities as follows (in millions of NOK):
Statfjord 447Murchison 14Frigg 52
Total Statoil 513Norsk Olje a.s 66
The consolidated companies 579
See also note 17.
9. Other year end adjustments are distributed as follows:
Millions of NOK The consolidated companies Statoil
Changes in inventories 62 7Regional development fund 26Premium fund 21Consolidation fund 9Classification fund 9
127 —7
10. This item refers to the following minority interest shares:
26.38% of the income of NOK 39.2 million in Norsk Olje a.s NOK 10.3 million40.55°h of the income of NOK 0.7 million in Rafinor A/S NOK 0.3 million
NOK 10.6 million
• • - • • • ts of the following:
• 1982 1981
- 433 1052. •- - 39 81
—-I’ - I 1 1473 1134
Increase in unrealised income on inventories 53 86Deprecation of surplus value in subsidiaries 8 7
412 1 041Minority interest share 10 22
Consolidated companies’ share 402 1 019
12. Short-term deposits in Norwegian kroner include a total of NOK 17 million of withheld employee income tax, payable tothe tax authorities. The comparable amount of the consolidated companies is NOK 28 million.
Statoil’s medium of exchange is distributed as follows:
Amounts in millions Currency Exchange rate NOK
Deutsche marks (DEM) 0.7 296.45 2U.S. dollar (USD) 2.5 7.03 18Pound sterling (GBP) 0.7 11.39 8Finnish marks (FIM) 0.7 133.15 1Danish kroner (DKK) 5.6 83.85 5Norwegian kroner (NOK) 76
110
13. Other short-term receivables for Statoil include NOK 15 million in short-term financing related to sale of houses toemployees.
14. Shares in subsidiaries consist of the following items:
Amounts in 1000 NOK Book Par Number Ownership Total companyvalue value of shares interest share capital
Norsk OIje a.s 291 500 213 500 213 500 73.62% 290 000Rafinor A/S 3 000 3 000 3 000 30% 10 000
294500 216500
15. In the consolidated balance sheet, the value added fronl the purchase of shares in-Norsk Olje as, totalling NOK 110.8million, is distributed among the assets it is expected to affect, and it is depreciated accordingly. See principles of consolidation. The value added as of 31 December 1982 is reduced to NOK 69.5 million.
16. The distribution of shares is as follows:
Amounts in 1000 Book Par Number Ownership Total companyvalue value of shares interest share capital
Norpipe a.s 390 000 390 000 3 390 000 50% 780 000Coast Center Base A/S 27 27 110 50% 55Statfjord Transport a.s 420 420 840 932 42.04% 1 000Vestbase a.s 400 400 400 40% 1 000Norbase a.s 160 160 160 40% 400Botnaneset Industriselskap A/S 3 000 3 000 30 18.5% 16 200Norpipe Petroleum UK Limited 95 751 £ 6 250 5 250 000 50% £ 12 500Norpolefin (UK) Limited 35 £ 3 3333 33 ½% £ 10
489 793
The shares are recorded at cost. The subsidiary Norsk OIje a.s. owns shares in other companies amounting to a totalbook value of NOK 6 million of which NOK 4 million is included under current assets. The consolidated companies’ totalbooked value of shares amounts to NOK 495 million.
17. Specification of fixed assets:
Millions of NOI( Investmen Additions Disposed Accum. de- Book valueas of during of during preciation as as of
1 Jan. 1982 the year the year of 31 Dec. 82 31 Dec. 82
• .. . 7391 5316 3826 8881• . •• - 6 269 4 697 4 186 6 780
• • - - 144 55 87 112268 40 19 289
14072 10108 4186 3932 16062
• .• . 9293 5418 3 4967 9741• . ••- 6292 4745 4186 9 6842
127 22 72 77213 74 4 156 127335 49 1 22 361
16 260 10 308 4 194 5 226 17 148
Provision for tax depreciation is NOK 1,820 million of the accumulated depreciation in Statoil. The corresponding figure forthe consolidated companies is NOK 1,947.
Investments distributed by year:
Millions of NOK 1978 1979 1980 1981 1982 Total invest-and ments as of
before 31 Dec. 81
••• . 1624 4849 756 260 5316 12805• • •• - 4627 2276 1550 2404 511 6816-• • - - 49 40 23 37 55 204• 29 5 132 102 40 308
6329 2618 2461 2803 5922 20133
As of 1 Jan. 80• •• • 8111 905 374 5415 14805
• • •• - 2 388 1 532 2 408 559 6 887105 19 3 22 149155 25 39 70 289109 125 101 48 383
10868 2606 2925 6114 22513
The consolidated companies were established on 1 January 1980.
The book value of the above mentioned fixed assets is distributed by project as follows:
Millions of NOK Ownership Net book Additions Depre- Book valueinterest value as of in 1982 ciation as of
in per cent 1 Jan. 1982 in 1982 31 Dec. 1982
Statfjord 42.04661 8 156 2 499 822 9 833Gulifaks 85.000 769 695 1 464Statpipe 60.000 142 2084 2226Heimdal 40.000 84 257 341Frigg 3.041 270 60 98 232Murchison 8.125 389 29 84 334N/E Frigg 3.000 10 24 34Ula 12.500 45 4 49K 18 7.500 33 33Rafinor 30 351 28 55 324Noretyl 33 399 9 62 346Norpolefin 33 1/3 337 2 47 292Coast Center Base 50 24 12 2 34Other 100 384 186 50 520
11360 5922 1220 16062
Depreciation is expensed as ordinary depreciation NOK 707 million, and under year end adjustments NOK 513,see note 8.
25
18. The long-term debt of the consolidated companies is distributed by currencies as follows:
Amounts in millions Currency Average rate of Book valuevalue exchange in NOK
Norwegian kroner 4 051U.S. dollar (USD) 868.6 5.51 4786Deutschemark (DEM) 315.6 266.80 843Swiss franc (CHF) 224.3 305.40 685Pound sterling (GBP) 17.2 10.581 182French franc (FRF) 73.0 111.00 81Japanese yen (JPY) 10 000.0 2.54 254Danish kroner (DKK) 35.0 84.51 30Currency risk fund (NOK) 1 642Next year’s installment on long-term liabilities 1 026
11 529
Of the subsidiaries’ domestic long-term debt, NOK 43 million is obtained by using as security, vessels with a bookedvalue of NOK 97 million, and NOK 257 million is obtained by using as security installations, real estate, and housing with abooked value of NOK 740 million.Unused part of long-term loan agreements is about NOK 730 million.19. In 1982 the Statoil currency risk fund has been increased by NOK 1,076 million to cover the currency loss which wouldhave occurred if the total debt had been repaid at the exchange rates of 31 December 1982. The amount is charged to theprofit and loss statement. Corresponding figure for the consolidated companies is NOK 1,139.20. Other long-term Statoil debts include financing which the partners in the Heimdal field and K/18 have carried forStatoil, and which includes the costs incurred prior to the option being exercised. The debt will be repaid by crediting tothe partners future income from sales from the respective fields. If the debt is not repaid by the time the productionlicence expires, the outstanding debt will be cancelled. Statoil has the option of prepaying the debt. Statoil’s share offinancing of drilling equipment on the Statfjord platforms is also included.21. Together with the other partners in I/S Noretyl and I/S Norpolefin, Statoil has a joint and several liability for the debtincurred in the name of the partnerships. This is mainly accounts payable in the amount of about NOK 145 million inaddition to Statoil’s previously booked share.The consolidated companies are responsible for guarantees to employees and customers for a total of NOK 32 million.The consolidated companies have an uncovered obligation for pension in connection with early retirement and a pensionage of 65 years for certain groups of employees.Liability and insuranceIn connection with the activities on the continental shelf, including transportation systems, Statoil has, like all otherlicensees, an unlimited liability for possible claims for damages. The company has taken out insurance for this liability fordamages up to a total of approximately NOK 700 million for each incident. Statoil has a principle that it insures companyassets at their estimated replacement value. Due to the lack of capacity on the insurance market this could not be donefor the Statfjord platforms. However, the insurance sum is higher than the booked value of the platforms.Charter agreementsStatoil has signed charter agreements for a total of four drilling rigs. Remaining charter periods vary from four to eightyears. Furthermore, Statoil has chartered six supply vessels and three standby vessels to service these rigs.Statoil has a contract for seismic data collection over the five year period 1982-1986.Statoil leases some of the automated office equipment.In a partnership, Statoil, together with the other partners, is responsible for agreements signed by the partnership.
Operating result for the consolidatedcompanies, by area and activity:Amounts in millions of NOK Operating Operating Ordinary Operating
revenue costs deprecation result
1982 1981 1982 1981 1982 1981 1982 1981
Statfjord 7603 5203 1 606 1 339 374 235 5623 3629Murchison 746 408 108 100 70 39 568 269Frigg 457 404 68 88 47 64 342 252Exploration expenses etc.,other licences 73 69 1 269 551 44 22 — 1 240 — 504
Production of oil and gas 8 879 6084 3051 2078 535 360 5293 3 646Refining and marketing 14769 11983 14067 11596 214 191 488 196Petrochemical activities 860 561 763 436 109 128 — 12 3Transportation 1 22 1 —22Internal deliveries —7571 — 4947 — 7 571 — 4947
Total 16938 13 681 10 332 9 163 859 679 5747 3 839
26
Source and application of funds
Amounts in millions of NOK The consolidated Statoilcompanies
1982 1981 1982 1981
Source of funds:Result before year end adjustments 3432 1 933 3235 1 950Depreciation 859 851 707 696Currency risk fund 1139 429 1 076 414Taxation — 2314 352 —2 296 350Dividends paid — 368 — 368Premium fund — 21
~rotaI internal financing 2727 2861 2 354 2 710New long-term loans 2788 416 2 606 341
TOTAL SOURCE OF FUNDS 5515 3277 4960 3051
Application of funds:Investment in fixed assets 6 123 2 946 5928 2 822Repayment of long-term loans 410 1 034 299 957Change in working capital — 1 018 — 703 — 1 267 728
TOTAL APPLICATION OF FUNDS 5 515 3 277 4960 3 051
Specification of change in working capital:Cash and short-term deposits 125 184 69 11Short-term receivables 417 49 427 24Inventories 495 405 403 273Current liabilities — 2 055 — 433 — 2 166 420
Change in working capital — 1 018 — 703 — 1 267 — 728
Result analysis for the consolidated companies
1982 1981 Definition
Operating resultNet operating margin 34.0°/o 28.1% Operating revenue
Result before extraordinary itemsGross profit margin 2O.2°Io 15.4% Operating revenue
Result before extraordinary itemsTotal rate of return 33.70/0 27.2% pIus financial costs(before taxes) Average total capital
Result before extraordinary itemsShareholder’s equity 32.8°/o 59.0% less taxes
___________________________________ Average shareholder’s equity
Value added statementAmounts in millions of NOK The consolidated companies
1982 1981
Operating revenue 16938 13681+ purchased goods and services used 8 013 7343
gross value added from own activities 8 925 6 338÷ ord nary depreciation 859 679
net value added from own activities 8 066 5 659financial income 573 311net extraordinary items 17 — 172
= value added for distribution from own activities 8 656 5 798
= total value added for distribution 8 656 5 798
Which is distributed as follows:EmployeesGross salaries and social benefits 617 7.l0/c 471(including income tax) (165) (127)
Capital investorsInterest to borrowers 1 766 20.4°/a 1 616 27.9%Dividends to the Government 358 4.1°/o 368 6.4%
State, municipalityRoyalties, taxes and petrol tax, etc 4016 46.4°/o 1 701 29.3%
The companyRetained for future value added (this year’s net income,tax depreciation, currency risk fund and deduction of recommended dividend to the Government) 1 899 22.0°/o 1 642 28.3%
Total value added for distribution 8656 1000/a 5798 100%
Current cost accountingAt times when there is a strong inflation, traditional accounts with costs based on historical purchase value do not providesatisfactory information about the development of a company’s profitability and financial standing. The current cost accountsbelow are prepared according to the British Statement of Standard Accountign Practive (SSAP 16).
In hsort, the method measures the costs (cost of goods sold and depreciation) based on replacement value. The resultingcorrections are adjusted for financing in foreign currencies because the debt is nominally fixed and independent of inflation.
In the balance sheet, fixed assets and inventories are adjusted to replacement value. These adjustments appear as an individualitem - cost reserve - under shareholder’s equity in the balance sheet below. The adjustments which are included in the profitand loss statement below, are called realised cost reserves, and the corrections in the balance sheet, unrealised cost reserves.
The table below is based on Statoil’s ordinary operating result:
Current cost profit and loss accounts for 1982
Amounts in millions of NOK 1982 1981
5360 3679
3405513
Historical cost operating resultCurrent cost adjustments:Depreciation (1)Costs of goods (2)Monetary working capital (3) — 408 289
Current cost operating result 4 952 3 390Net financial costs 2 138 1 565Gearing adjustment 237 159
Result before extraordinary items 3 051 1 984Extraordinary items 13 164Taxation — 2 296 350Movement in deferred taxation (4) — 165 — 374
26124
—4
Current cost net income attributable tothe shareholder (5) 603 1 096
28
Current cost balance sheet as of 31 December 1982
Assets:Cash and short-term depositsShort-term receivablesInventories (2)Long-term receivablesFixed assets (1)
Total assets 28421
Liabilities and shareholder’s equity:Current liabilitiesLong-term debtDeferred taxation (4)Shareholder’s equity as of 1 JanNet incomeDividends paid __________
Cost reserve (6)
Total liability and shareholder’s equity 28421
Notes:1. The calculation of replacement cost of fixed assets is based on price indexes for offshore and onshore installations. Indexes
are based on relevant price indexes for groups of investments in the national financial statement.
2. The cost of goods for certain product groups is adjusted to the replacement value at the time of sale.
3. The monetary working capital adjustment (customer claims - supplier debt) are linked to the prices of the product groups.
4. Realisation of fixed assets at values recorded in the current cost balance sheet would have resulted in a tax responsibility ofabout NOK 1547 million per 31 December 1982. The responsibility occurs as a consequence of provisional tax depreciationbooked in the company’s financial accounts.
5. Corresponds to net income sufficient to maintain the company’s funds in real terms.
6. Specification of cost reserve:Unrealised: 1982 1981Revaluation of fixed assets 6 770 4 056Revaluation for stocks 2 26Realised:Depreciation adjustments 861 521Cost of sales adjustments 119 64Monetary working capital adjustment — 6 19External financing — 471 — 234
7275 4414
Recommendation fromthe Company Assemblyto the General Meeting regarding the annual reportand accounts for 1982.At the meeting on 4 March 1983 the Statoil CompanyAssembly discussed the annual report and accounts for1982 of the Board of Directors for Den norske statsoljeselskap and for the Statoil Group.The Company Assembly recommends that the GeneralMeeting approve the annual report submitted, and establishthe accounts in accordance with the draft made by theBoard of Directors.The Company Assembly approved the recommendation ofthe Board of Directors that the 1982 net income be used inthe following manner:
Net income 1982 NOK 433 millionBrought forward from 1981 NOK 19 million
NOK 452 millionReserve fund NOK 89 millionDividends NOK 353 millionCarried forward to 1983 NOK 10 million
Oslo, 4 March 1983
Egil AarvikChairman, Company Assembly
1982110
2011824824
24652
198141
1 584445818
16723
19611
306476911 015
34274414
19611
3427603368
5849104551180
36627275
23311 096
Auditor’s Reportfor 1982to the Shareholder of Statoil,Den norske stats oljeselskap a.sWe have audited the accounts for 1982 according togenerally accepted auditing standards. We have also auditedthe accounts for the consolidated companies for 1982.The annual financial statements for the company and theconsolidated companies are in compliance with theCompanies Act, and in our opinion present the result of theyear and the financial position of the company and theconsolidated companies on the basis of generally acceptedaccounting principles.The Board’s proposal for application of the company’s netincome complies with the Companies Act.The statement of profit and loss and the balance sheetsubmitted for the company and for the consolidatedcompanies may be adopted as the accounts of Statoil andthe Statoil Group for 1982.
Stavanger, 28 February 1983Endresen, Klette & Co.
State Authorised Accountants
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Karl-Johan Endresen Ole M. Klette 29
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People working with the Gullfaks A insurancegathered in front of the previous grainexchange in London, with the slip signed by allthe insurers. From left to right: GunnarSletvold, Assistant Insurance Manager ofStatoil, John C. Wallace, Director of thebrokers Sedgwick Offshore Resources Ltd,London, Gunnar Hoye, Senior Vice Presidentof the Storebrand-Norden Group, Leo R.Whalen, Senior Vice President of the brokersMarsh & McLennan mc, New York, and Thorlnge Willumsen, Treasurer of Statoil.
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Insurance ofOffshore Installationsand Onshore Facilities
Statoil has a complex networkof insurance agreements
Statoil’s share in several of the largest and most expensive installations in the North Sea may cause thecompany considerable economic losses in case of serious damages. Comprehensive insurances are necessaryin order to cover such losses. Statfjord A and B areinsured for more than NOK 12 billion each and theyare considered the world’s largest single risks withinthe insurance world. Statoil owns 42 per cent of Stat-fjord, 85 per cent of Gullfaks and 60 per cent of Stat-pipe.
For many years to come, Statoil’s risk exposure willbe spread over a relatively small number of installations. The company has therefore a particular requirement of buying risk relief through insurance. The extent of the risk exposure is reflected in the large annual insurance premiums. In 1982 Statoil paid someNOK 70 million in premiums for each of the two firstStatfjord platforms. Operational insurance for threeStatfjord platforms and Gullfaks A will in 1987amount to a total of NOK 360 million in premiums,based on the present coverage and premium level.Statoil’s total annual premiums may increase toNOK 500-600 million during the next five years.
Insurance coverage for North Sea installations involves a complicated network of agreements betweeninsurers and reinsurers. It is difficult to say exactlyhow many underwriters are involved or how the risk isspread. The system of risk sharing makes it possiblethat even large damages may be reduced to manageable sizes for the individual insurer.
In 1982, Statoil’s Department of Finance and Insurance has been concentrating on the two developmenttasks which the company is operator for: the oil andgas field Gullfaks and the gas gathering system Statpipe. Construction insurances were negotiated in 1982for both Gullfaks A and the Statpipe system, includingthe two riser platforms and the Karstø gas terminal.These agreements represent a total of nearly NOK 500million in premiums during the construction periods,which will be finished in 1986 87.
31
Insurance in the Construction PhaseIn the case of major construction projects a large
number of contractors will be involved at the sametime. Each of these is normally responsible for unforeseen losses or damages in the course of their work.The responsibility is more complicated if one contractor causes damage on work carried out by anothercontractor, or work which has already been taken overby the builder. If each individual contractor should insure his liability, this might lead to complicated andtime-consuming lines of argument or recourse claims ifloss or damages should occur. Furthermore, this arrangement would in all probability lead to an increasein the total insurance costs. The contractor would haveto cover these costs in the price of the individual contract and the total cost of the project would thus increase.
Owing to these conditions, it is usual that thebuilder insures the whole project from commencementof the work until the facility is read) for use. All contractors are included in the insurance in the same wayas if they had taken out a separate insurance. Thiskind of project insurance is often called a ‘Construction All Risks’ (CAR) insurance. Besides covering anyphysical damage on the insured object, including materials and equipment, the insurance also covers liability vis-a-vis third parties, cleaning up and removal ofdebris. The project CAR insurance has thus a verywide scope of coverage.
OrganizingEach joint venture on the Norwegian continental
shelf has as the highest decision making authority, amanagement committee, which decides the insurancecoverage for a development project. The managementcommittee appoints various subcommittees to giveadvice in professional matters, such as insurance. Thecommittees have regular discussions where they givetheir opinion as to the operator’s various propositions.
The daily tasks of a joint venture are carried out bythe operator. An important part of the operator’s insurance work consists of composing a full technicaland economic documentation concerning the plannedconstruction. This can often be time-consuming, particularly before the many technical solutions have beenfinally decided.
It is especially important that the documentation forthe insurance market contains information as to whatvalues will be at risk on each building site and forwhat periods.
Gulifaks AMeasured in Norwegian currency, the insurance ca
pacity of the world market for oil risks has increasedconsiderably during the later years. This increase ismainly due to the strong increase of the American dollar compared to Norwegian kroner. A considerablepart of the venture capital involved in insurance of oilinstallations is in dollars. When the Gullfaks A projectinsurance became effective on 1 February 1983, thetotal worldwide capacity was about NOK 12.5 billion.
The London market, principally represented byLloyd’s, controls 60-70 per cent of the world’s capacityfor oil insurance. Lloyd’s is not an insurance company, but an association where individual underwritershave joined in groups or syndicates. The syndicatescarry risk in the same way as an ordinary insurancecompany. The capacity of Lloyd’s is only availablethrough a separate system of insurance brokers inLondon. Direct contact between Lloyd’s and the insured is not permitted. The available capacity is led by
a handful of experienced underwriters, called leaderswho must all support a proposition from Ihe broker inorder to make the rest of the market underwrite thecoverage. For Gulifaks A, the insurance could thus notbe presented to the market through different, competing London brokers.
Dependency on the London insurance capacity excluded also competition between the different insurance markets. Statoil, as operator, proposed thereforethat an expert group be asked to work out a proposition for insurance coverage of the platform.
Based on reasons of capacity, a London brokerparticipated. It was also desirable to include a representative from the American market.
Insurances for North Sea installations give the Norwegian insurance companies a possibility to developexpertise within oil insurance. It was therefore naturalthat Den Norske Oljeforsikringsring was asked to participate in the bid group. Oljeforsikringsringen is anassociation of Norwegian casualty insurance companies.
The bid group presented its final proposal to theGullfaks insurance committee in January 1983. Earlier,the operator had participated at several of the group’smeetings. This gave an opportunity to present theviewpoints of the insured concerning risk assessmentand premium structure before the premiums were finally settled by the market.
On the basis of the insurance committee’s recommendation the management committee decided theirfinal insurance cover for Gullfaks A. The insurancewas thus effective when the construction work startedin February 1983. The sum insured was fixed atNOK 10.45 billion, a sum sufficient to cover the construction work before the mating of deck and concretegravity base structure in 1986.
Based on the licensees’ experience from other NorthSea projects, the chosen procedure has proved to besatisfactory. Earlier the insurance market chargedhigher premiums for concrete platforms than for steelplatforms. This was mainly due to lack of experienceand knowledge about concrete structures, whereassteel platforms had been insured for several years.However, the claims record for concrete platforms hasbeen so good that the premiums today have reachednearly the same level as for steel constructions.
As mentioned earlier, the project insurance for Gullfaks A includes, in addition to the licensees, all contractors, no matter where in the world the work is performed. When the builder is responsible for the insurance, the contractors will often consider it necessary tohave a closer knowledge of the insurance terms beforethey submit tenders. To meet this wish, the wording ofthe policy was negotiated with the London market formore than a year before the coverage became effective. With London’s dominating position, its approvalwas sufficient also for the other markets. For the firsttime in connection with a project on the Norwegiancontinental shelf, the conditions of insurance are included in each individual construction contract.
Statpipe PipelineEven if the budgeted total costs of Gullfaks A and
Statpipe’s pipeline and riser platforms are of the samesize, insuring the two projects presented quite a different set of problems.
Gullfaks A consists of one large platform. The entire value will be gathered in one structure from themating of deck and concrete structure to the platformis commissioned. During this period, the insurers areexposed to very large sums, for instance if a total loss
32
Insurance of the Karstø gas terminal is thebiggest non-marine insurance covered byNorwegian insurance companies. This is amodel of the terminal at Linde AG in Munich,from left to right: Hâkon ørn, SeniorEngineer Statoil, Ole Haaland, SeniorEngineer Forsikringsaktieselskapet Vesta,Fredrik Gjertsen, Staff Engineer NorgesBrannkasse, Thor Vesseltun, Vice President ofStorebrand-Norden, Per Aasbe, Staff EngineerStatoil, and Fredrik Berger, Senior EngineerStatoil.
Reinsurer
Reinsurer
Reinsurer
Reinsurer
Arve Johnsen, President of Statoil, lays downthe foundation stone of the Gulifaks Aplatform in Hinnavágen near Stavanger inFebruary 1983. Next to him is SigmundBrusletto, Director of Norwegian Contractors.Gullfaks A is insured for NOK 10.45 billionduring the construction period.
The insured
The insurer
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Marine and non-marine insurance of oilinstallations is a complicated net of agreementsbetween the insured, the insurer and a numberof reinsurers.
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should take place during tow-out to the field.As regards the offshore part of Statpipe, which
consists of two relatively simple steel platforms and840 kilometres of offshore pipeline, the insurers disregard the risk of total loss of the pipeline. Thereforepipelines are traditionally insured only for a sum corresponding to the maximum possible damage, for instance NOK 50-100 million per damage. In Statpipe itis the riser platforms at about NOK 1 billion eachwhich represent the largest individual values.
This means that several insurance markets wereconsidered for this project. The operator’s work wasroughly comparable with what has been described forGullfaks A, except for the fact that the different markets were asked to submit their offers in competitionwith each other. The order for cover was finally givento an American broker who offered the lowest totalpremium. The insurance became effective on 1 February 1983.
The Karstø TerminalThe insurance market is organized in a manner
which does not permit non-marine facilities to becovered together with marine installations. The reasonis that the different insurers have specialised within insurance and do not want to mix up their risk portfolios. The Karstø terminal therefore had to be insuredunder an individual insurance separate from those ofpipelines and platforms.
Norwegian insurance regulations are more restrictiveconcerning non-marine insurance than marine andpetroleum insurance. Thus, it poses more practicalproblems to insure abroad for non-marine facilities.The operator’s task was therefore to create real competition and at the same time try to place the policy inNorway. The insurance sum excludes usual competition between the Norwegian insurance companies. Theproblem was solved in the following manner:
Two major brokers, one English and one American,were asked to evaluate what they considered to be thelowest obtainable market premium. The offer shouldbe given based on a policy text which was developedbeforehand in cooperation between Den Norske Oljeforsikringsring and Statoil. The two brokers were toldthat Oljeforsikringsringen would be offered the insurance at the lowest premium. If Oljeforsikringsringendid not find the premium conditions satisfactory, thebroker with the lowest bid would get the order. TheNorwegian insurance companies accepted the lowestpremium offer that was presented.
Insurance of the Kársto terminal is the largest onshore insurance covered by Norwegian insurance companies. The sum insured is NOK 5.6 billion.
Self InsuranceThe major part of the premiums for oil insurance
end up abroad, either as direct payment to foreignunderwriters or as reinsurance from the Norwegianinsurance companies. Den Norske Oljeforsikringsringcovers eight to ten per cent of the worldwide capacityfor oil insurance. But more than 90 per cent of this isreinsured with foreign underwriters.
Statoil is concerned with keeping the biggest possible part of the insurance premiums in Norway. Forbusiness reasons there are, however, limits as to howbig chances the Norwegian insurance companies cantake on a limited number of major risks. The otherNorwegian oil companies’ need for reduction of theirrisk exposure is also a limiting factor.
Statoil has found that the most practical way of re
ducing the growth in company premiums is to increase the degree of self insurance for offshore installations. The simplest form of self insurance wouldbe if Statoil allocated a fund in its accounts to meetpossible loss or damages. Regulations in Norwegianinsurance and tax laws demand, however, that suchallocation must take place in a separate self insurance fund. If the authorities approve the plans,Statoil aims at establishing such a fund as soon aspossible, where a minor sum is allocated each yearfor each risk as an insurance premium. The ability ofthe fund to carry a risk will have to be limited at thebeginning, but Statoil evaluates the possibility asgood for increasing the fund and so the degree ofself insurance over time.
Den Norske Oljeforsikringsring:
Gjensidige Norsk Skadeforsikring
Norges Brannkasse
Polaris Assuranse A/S
Samvirke Skadeforsikring A/S
A/S Storebrand - Norden Skadeforsikring
Forsikringsaktieselskapet Vesta
34
Articles of Association
Art.1The corporate purpose of Den norskestats oljeselskap a.s is either by itself,or in participation or cooperationwith other companies, to carry out exploration, production, transportation,refining and marketing of petroleumand petroleum-derived products, aswell as other activities reasonably related thereto.
Art.2The registered seat of the Company isin Stavanger.
Art.3The share capital of the Company isNOK 2 943 500 000 divided into29 435 000 shares of NOK 100 each.
Art.4The Board of Directors of the company shall be composed of seven directors. Five of the directors, includingchairman and vice-chairman, areelected by the General Meeting. Twoof the directors are elected by andamong the employees in accordancewith regulations made under provisions of the Companies Act concerning the rights of employees to berepresented on the board of directorsand in the company assembly ofcompanies limited by shares.Four alternate directors shall beelected in respect of the two directorselected by and among the employees,and these alternates shall be summoned in the order in which they areelected. Two alternate directors shallbe elected in respect of the otherdirectors, one first alternate and onesecond alternate. The normal term ofoffice for the directors is two years.
Art. 5Any two directors jointly may sign forthe Company. The Board may grantpower of procuration.
Art. 6The Board shall appoint the Company’s President and stipulate his salary.
Art. 7The company shall have a CompanyAssembly consisting of 12 members.Members and alternates shall be
elected for two years at a time. TheGeneral Meeting shall elect eightmembers and three alternate membersfor these eight. Four members andalternates for these four are to beelected by and among the employeesof the Company in accordance withregulations made under provisions ofthe Companies Act concerning therights of employees to be representedon the board of directors and in thecompany assembly of companieslimited by shares.The Company Assemble elects achairman and a vice-chairman fromamong its members.The Company Assembly shall hold atleast two meetings annually.
Art. 8The ordinary General Meeting shallbe held each year before the end ofJune. General Meetings are held inStavanger or in Oslo. ExtraordinaryGeneral Meetings shall be summonedwhenever so demanded by the Shareholder, the Board, or two members ofthe Company Assembly.
Art. 9The ordinary General Meeting shalldeal with and decide the followingmatters:a) Adoption of the statement of profit
and loss and the balance sheet.b) Application of the annual profit or
coverage of loss as shown in theadopted balance sheet, and thedeclaration of dividends.
c) Adoption of the consolidated statement of profit and loss and theconsolidated balance sheet.
d) Any other matters which are referred to the General Meeting bystatute or the Articles of Association.
Art. 10The Board shall submit to the General Meeting, ordinary or extraordinary, all matters which are presumedto involve significant political questions or questions or principle and orwhich may have important effects onthe nation and its economy.Such matters shall be deemed to include, inter alia:
a) Plans for the next following yearwith economic surveys, includingplans to cooperate with other companies.
b) Essential changes of such plans asmentioned in a) above.
c) Plans for future activities, including participation in activitiesof major importance in other companies or joint ventures in whichthe Company participates or plansto participate.
d) Matters which seem to necessitateadditional appropriation of Government funds.
e) Plans for establishing new types ofactivity and localization of important elements of the Company’soperations.
1) Plans to participate in the exploitation of petroleum reserves in oroutside Norway, including theexercise of state participation option rights.
g) Semi-annual reports on the Company’s activities, including activities of subsidiaries and importantjoint ventures with other companies.
Matters which the Board submits tothe General Meeting pursuant to thisArticle and, if possible, matters whichthe Ministry has announced that itwishes to consider at such a GeneralMeeting, shall, if possible, be presented in writing and delivered to theMinistry in good time prior to theGeneral Meeting.If there has been no opportunity tosubmit the above-mentioned mattersin advance to the General Meeting,the General Meeting shall promptlybe notified of the Board’s resolution.Whenever possible, matters as mentioned in a) and g) above should besubmitted to the Company Assemblyfor comments.The General Meeting decides whetherto take note of the Board’s proposalsunder this Article, to approve them orto alter them.
Art. 11The provisions of the Companies Actshall be supplementary to theseArticles of Association.
Wells drilled on the Norwegian shelf in 1982Exploration and delineation wells
3067 306-9Norttym Nortrym
3064 ____________________
Treasure Seeker
7120 9 1Treasure Scout
2/2 2DyvI Alpha
34 10-15 34 10-16N Nordraug N N
640111 I 64071-20 Delta Dyvl Delta
30 6-10Treasure Scout
34 4.4Dyvi Alpha
Operator
OPERATED BY STATOIL
II
15/9-12N Nordraug
1st qtr. 2nd qtr. 3rd qtr. 4th qtr.
1/9-6Sedco 703
15/9-13Ross RIg15/9 12
Deepsea Saga
15/9-15Ross Rig
15/9-14Deepsea Saga
30 3-1DyvI Della
15/9.16Deepsea Saga
30/6-6Deepsea Saga
8/3-2West Vanguard
15 9 ~7West Van
30 2-IDyvl Della
34 10-14Ross Rig
Norsk Hydro
PARTNER OPERATED LICENCES
____
Neptuno Nordraug
7120/7-IN Nordraug
7 11-6Treasure SeekerTreasure Seeker
31 44Nertry,n
Saga
Amoco
35 3-5West Venture
Borgsten Dolphin
29 6.1Sedco 701
Treasure Scout
Dyvt Alpha
6407 2 1West Venture
6507 11 2West Venture
2/1-4AladdIn
Borgsten DOlphIn
1564Giomar Blscay it
16/7-3Giomar Blacay II
Esso
6507 10-1Sedce 707
306-liNT
Treasure Seeker
211-5Sedco 707
216-3Byford Dolphin
30113Borgny Doiph
7 11-No 46
Shell
Glomar Blscay II
35/8 2Sedco 704
WELLS IN WHICH STATOIL HAS NOT PARTICIPATED
1/34Borgsten Dolphin
16/7-4Glomar Blscay II
Esso
Shell
Phillips
31 2-7 31/24 31 2-9 31 2-10 31/2-4Borgny Dolphin Borgny Dolphin Borgny Dolphin orgny Delphi ryny Doip
Giomer Biscay Ii
D Delta Dyvi De ta NT. Nortrym T Seeker Treasure Seeker N. Nordraug Neptuno Nordraug
36
Survey of activities for the consolidated companies
Activity Company/licence Operator Location The consolidated Type ofcompanies’ share activity
Exploration Prod. licence 038 Statoil Block 15 12 50% ExplorationProd. licence 044 Statoil Block 1 9 50% EvaluationProd, licence 046 Statoil Blocks 15/8, 15/9 50% EvaluationProd, licence 051 Statoil Block 30/2 50% ExplorationProd. licence 052 Statoil Block 30/3 50% ExplorationProd. licence 060 Statoil Block 7119/12 50% ExplorationProd, licence 064 Statoil Block 7120/8 50% ExplorationProd, licence 071 Statoil Block 8/3 50% ExplorationProd, licence 073 Statoil Block 6407/1 50% ExplorationProd. licence 077 Statoil Block 7120/7 50% ExplorationProd. licence 080 Statoil Block 6609/5 50% ExplorationProd. licence 084 Statoil Block 6610/7 50% Exploration
Activity Field/licence Operator Location The consolidated Type ofcompanies’ share activity
Production Statfjord Prod. ic. 037 Mobil Blocks 33/9 and33/12 50% Oil production
Murchison Prod. lic. 037 Conoco Block 33/9 50% Oil productionFrigg Prod, lic. 024 Elf Block 25/1 5% Gas production
Activity Field/licence Operator Location The consolidated Type ofcompanies’ share discovery
Development N E Frigg Prod. lic. 024 Elf Block 25/1 5% GasGullfaks Prod. lic. 050 Statoil Block 34/10 85% Oil/gasUla Prod, lic. 019 BP Block 7/12 12.5% Oil/gasHeimdal Prod. lic, 036 Elf Block 25/4 40% GasK 18 LJ16 Conoco Dutch cont. shelf 7.5% Oil
Activity Company Operator Location The consolidated Type ofcompanies’ share activity
Transportation I/S Statpipe Statoil Kárste 60% Gas transportationNorpipe a.s Separate adm. Stavanger 50% Oil and gas transp.Norpipe Petroleum UK Ltd Separate adm. Teesside 50% Oil terminalK/S Staffjord Transport a.s &Co. Statoil Stavanger 42.04661% Transp. of crude oil
Activity Company Operator Location The consolidated Type ofcompanies’ share activity
Refining and Rafinor A/S & Co. Separate adm. Mongstad 70% Refinerymarketing Norsk Olje a.s Separate adm. Oslo 73.62% Marketing
I S Noretyl Norsk Hydro Bamble 33% PetrochemicalsI/S Norpolefin Saga
Petrokjemi Bamble 33 %% Petrochemicals
Activity Company Operator Location The consolidated Type ofcompanies’ share activity
Service Coast Center Base A Scompanies & Co. Separate adm. Sotra 50% Supply base
Vestbase a.s Separate adm, Kristiansund N. 40% Supply baseNorbase a.s Separate adm. Harstad 50% Supply baseBotnaneset industriselskapA/S Separate adm. Florø 18.1585% Supply baseHelgelandsbase a.s Separate adm. Sandnessjøen 50% Supply base
Statoil interests in licences allocated as of 1 January 1983Production licence Statoils share in Type of Type ofand year allocated Block Operator Ordinary Maximum agreement* discovery Field
Norwegian continental shelf005 - 1965 7/3 Union 10 1 Returned in 1981008 - 1965 18/10, 2 6 Elf 2 1 Gye019A - 1965 7/12 BP 12.5 1 Oil/gas Ula019B - 1977 2/1, 7/12 BP 50 72 1 Oil020 - 1965 16/8 BP 12.5 1022 - 1965 2/3, 3/5 Gulf 11 1023 - 1969 3/7 Elf 5 2024 - 1969 25/1 Elf 5 4 Gas Frigg, NE Frigg025 - 1969 15/3 Elf 6 2 Gas026 - 1969 25/2 Elf 5 2 Gas E Frigg, SE Frigg027 - 1969 25/8 Esso 17.5 3 Oil Balder028 - 1969 25/10 Esso 17.5 3 Oil Balder029 - 1969 15/6 Esso 17.5 3 Gas/condens. Sleipner030 - 1969 30/10 Esso 17.5 3 Gas Odin, NE Frigg031 - 1969 2/10 Phillips 17.5 2032 - 1969 2/9 Amoco 10 3033 - 1969 2 11 Amoco 10 3 Oil/gas Vallhall/Hod036 - 1971 25/4 Elf 40 4 Gas/condens. Heimdal037 - 1973 33/9, 33/12 Mobil 50 4 Oil/gas Statfjord/Murchison038 - 1974 15/12 Statoil 50 75 1 6/3, 15/11 returned in 1982039 - 1974 24/9 Conoco 50 75 1 Returned in 1982040 - 1974 29/9, 30/7 Norsk Hydro 50 66 1 Gas/condens. Hild041 - 1974 35/3 Saga 50 70 1 Gas043 - 1976 29/6, 30/4 BP 50 70 1 Gas/condens.044 - 1976 1/9 Statoil 50 75 1 Oil/gas Tommeliten045 - 1976 24/11, 24/12 Statoil 50 75 5 Returned in 1982046 - 1976 15/8, 15/9 Statoil 50 75 1 Gas/condens. Sleipner047 - 1977 33/2, 33 5 Norsk Hydro 50 66 1048 - 1977 15/2, 15 5 Norsk Hydro 50 75 1 Gas/condens.049 - 1977 33/6 Agip 50 70 1050 - 1978 34/10 Statoil 85 85 5 Oil/gas Gullfaks051 - 1979 30/2 Statoil 50 75 1052 - 1979 30/3 Statoil 50 75 5 Oil053 - 1979 30/6 Norsk Hydro 50 80 5 Oil/gas Oseberg054 - 1979 31/2 Shell 50 75 5 Oil/gas Troll055 - 1979 31/4 Norsk Hydro 50 75 5 Oil Brage056 - 1979 34/2 Amoco 50 75 1057 - 1979 34 4 Saga 50 75 5 Oil058 - 1979 35/8 Gulf 50 70 1 Gas oil059 - 1980 6507/12 Saga 50 80 5060 - 1980 7119/12 Statoil 50 80 5061 - 1980 7120/12 Norsk Hydro 50 80 5 Gas062 - 1981 6507/11 Saga 50 80 5 Gas063 - 1981 7117/9 Norsk Hydro 50 80 5064 - 1981 7120 8 Statoil 50 80 5 Gas Askeladden065 - 1981 1 3 Elf 50 80 1066 - 1981 2 2 Saga 50 80 5 Gas/oil067 - 1981 2 5 Shell 50 80 1068 - 1981 28,2 11 Norsk Hydro 50 80 5069 - 1981 7/8 Conoco 50 80 5070 - 1981 7/11 Norsk Hydro 50 80 5 Oil071 - 1981 8/3 Statoil 50 80 1072 - 1981 16/7 Esso 50 80 5 Gas/condensate073 - 1982 6407/1 Statoil 50 80 5074 - 1982 6407/2 Saga 50 80 5075 - 1982 6507/10 BP 50 80 1076 - 1982 7119/7 Norsk Hydro 50 80 5077 - 1982 7120/7 Statoil 50 80 5 Gas078 - 1982 7120/9 Norsk Hydro 50 80 5 Gas
38
Production licence Statoils share in Type of Type ofand year allocated Block Operator Ordinary Maximum agreement’ discovery Field
079 - 1982 30/9 Norsk Hydro 70 70 5 Oil Oseberg080 - 1982 6609/5 Statoil 50 75 5081 - 1982 6609/7 Phillips 50 80 1082 - 1982 6609 10 Saga 50 80 S083 - 1982 6609 11 Norsk Hydro 50 80 5084 - 1982 6610 7 Statoil 50 80 1Dutch continental shelfL/16-B 1968 K 18, L/16 Conoco 7.5 •. Oil
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