In many ways, StatoilHydro, as Norway’s national operating company (NOC), is setting the pace for other NOCs. And the company is well aware of its position.

In an interview with E&P, Lund explained that StatoilHydro, like a number of other state oil companies, is national in name, but global in nature. “StatoilHydro is gradually transforming into a global energy company,” he said.

The company has certainly made significant strides in a short time.

The first quarter for which financial statements of the merged StatoilHydro organization were presented was 4Q 2007. The results, not surprisingly, were heavily influenced by costs arising from the merger. Net income for 4Q 2007 totaled NOK 6.2 billion (US $1.2 billion), compared to NOK 15 billion ($3 billion) in 4Q 2006.

The results from 1Q 2008 tell a different story. The company’s net income for the period amounted to NOK 16 billion ($3.1 billion), compared to NOK 9.9 billion ($2 billion) in 1Q 2007.
It comes as no shock that the increase in revenues was mainly due to a 42% increase in realized oil prices measured in NOK and higher gas prices. This increase was partly offset by increased exploration costs, a factor that apparently is not impacting StatoilHydro’s expansion plans.

“We continue to build long-term growth through an extensive exploration program and active business development,” Lund explained. “Our exploration activity has yielded encouraging results. So far in 2008, we have confirmed 15 new discoveries, 12 in Norway and three internationally.”

The number of discoveries in 1Q 2008 compares favorably to the company’s results for 1Q 2007. The company drilled 19 exploration and appraisal wells in 1Q 2007 — seven on Norway’s continental shelf and 12 internationally, nine of which were confirmed discoveries.

StatoilHydro’s successes are Norway’s successes

In mid-May, Norway’s Ministry of Petroleum and Energy reported that the state’s net cash flow from the petroleum sector had reached record levels. According to Aslaug Haga, Minister of Petroleum and Energy, earnings equate to NOK 80,000 ($15,880) per Norwegian citizen. The ministry has estimated the state’s net cash flow from the petroleum sector in 2008 at NOK 356 billion ($70.7 billion).

Taxes and fees constitute NOK 216 billion ($42.8 billion), the net cash flow from the State Direct Financial Interest (SDFI) is NOK 123 billion ($24.4 billion), and dividend from StatoilHydro is NOK 17 billion ($3.4 billion).

Total oil production (including natural gas liquids and condensate) is estimated at 2.4 million b/d in 2008, which is slightly lower than production in 2007. Though oil production is expected to continue to decrease gradually in the coming years, the high price of oil per barrel is pushing revenues higher than ever before.

Since oil production began offshore Norway, the country has produced approximately one-third of its expected recoverable resources. Today, the ministry says, nearly half of the total expected oil resources have been produced. Remaining reserves are primarily those connected to existing fields or yet to be discovered. Not surprisingly, the country anticipates a strong focus on exploration and producing mature assets.

In pursuit of that objective, StatoilHydro is using all of the resources at its disposal, key among them, partnerships that will help identify and commercialize technologies that will make producing the remaining reserves possible.

“No doubt our future operations will be more demanding,” Lund said, noting that he believes the most rapid progress will be the result of collaboration. “Partnerships and collaboration have a better track record than isolationism,” he explained. “They are part of our DNA as a company.”

Comments