Annual Report 1988
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• . •• I -— .4 ‘a o Den norske stats oljeselskap a.s Den norske stats oljeselskap a.s Board of Directors t - Chairman: - - Jan Erik Langangen I a o a Vice Chairman: ou • Arnfinn Hofstad 5 d o Directors: platfo fo h - . Else Bugge Fougner 6 e. rt o the I: • . I r Marit Reutz 11 rofi and Loss Accoun or 1 Ole Knapp Balance Shee a December Bjarne Gravdahl 14 Statement of Accountin olici Petter Anda 25 Auditors’ Re’ ‘ rt and Anne-Britt Andersen Recommendation from the Corporate s Eivind Lønningen Assembly HA ~ 26 Reserves and Production Deputies: 28 Statoil Group Activities Bent Wenaas 47 Articles ofAss. lation Kjeld Rimberg 48 Survey ofthe Statoil Giou a ‘a Gunnar Langvik activities 1988 Lars Bakka 50 Addresses RSTAD Svein G. Øhriing Tore Hugo Jensen Tor Ragnar Pedersen • SANDNESSJOEN Corporate Assembly BRONNOYSUND Chairman: HEIDRUN Oluf Arntsen SMORBUICK MIDGARO Vice Chairman: ~4jORD D~IG Brit Jakobsen Members: TRONDHEIM Axel Buch KRISTIANSUND Kristin Krohn Devoid Sigbjørn Eriksen Vigdis Ravnøy MURCHISON FLORO Unn Aarrestad John Stene MONGSTAD Terje Fossmark BERGEN Svein H. Rolfsen ~ // .osi.o Olaf Andersen ~ MD STOCKHOLM• P H 1 • TO • STAVANGER • BANGLE Deputies: ST.FERGUS • STENUNG8UND Oddny Bang Knut Engdahi coo uu Ragnhild Setsaas Helge Kjørholt iouu Lars P. Lundahi Randi Kleppe KALUNDBORG Johs. Bergsland Arne Breistein IDE / Reidar Nyiand — - EMDEN • HAMBURG / •THE HAGUE •LONDCN I ~ Front cover: Clearing up. From J~ren, ZEEBRUGGE Norway’s south-western corner. Photo: LeifBerge ~ ~ ~ ~ ---- — Highlights Amounts in millions of NOK - OT-CTC~ - RG~W r Profit and Loss Account The consolidated Sta toil companies 7 - 1988 1987 1986 1988 1987 1986 Operating income 56320 60822 49 190 37673 42422 32015 Operating profit 6 190 7 995 6 601 5400 7825 5657 . Net financial items (2121) (1 537) (2 391) (2052) (1 419) (2 162) Profit before extraordinary items 4069 6 458 4210 3348 6406 3495 Profit before adjustments 1779 3 458 4 210 1345 3406 3495 5uP~” Profit (loss) for the year 340 (1 534) 1145 398 (1 460) 1 348 ~ ~,.E Balance Sheet The consolidated Sta toil companies ~ 1988 1987 1986 1988 1987 1986 Fixed assets 49438 46300 42142 46765 43918 40363 Current assets 10551 9 942 8 269 6334 5538 4254 H. Current liabilities 9990 11269 9413 6440 7424 6561 •“~ ~ Long-term liabilities 34570 31235 27379 32362 29 320 25 490 Conditional untaxed reserves 11138 9 708 8 227 9597 8410 6804 Shareholder’s equity 4280 3954 5217 4700 4302 5762 ‘Jr.1.. Other Highlights The consolidated Sta toil companies 1988 1987 1986 1988 1987 1986 Investments & acquisitions 9863 11685 8427 8946 10475 7 473 Cash flow 8053 6429 5979 7335 6131 4886 Ordinary depreciation 4723 4527 3593 4099 3920 3080 Total rate of return * 13.6% 17.9°c 14.6°o Rate of return on shareholder’s equity (after taxes) * 52.1°c 42.7°c 44.6°c Equity ratio 12.3% 12.1°c 15.7°c *) Definition page 23 Personnel The consolidated Sta toil companies 1988 1987 1986 1988 1987 1986 Number of employees at 31 Dec. 11167 10627 8471 7731 6794 4863 Salaries and related costs 4022 3619 2584 2891 2469 1601 — ~,_jZ_ -~. — .~-..- - —~ .~ ~:- -, r - ~ ~ — .-,__ I - - — — — - - - -. ~ The Statoil Group Statoil’s Executive Committee, from left: Tor Espedal, Martin Bekkeheien, Henrik Ager-Hanssen, Tore Tenne, Harald Norvik, Johan Nic. Void and Jakob Bleie. The Statoil Group consists of the parent company Den norske stats oljeselskap a.s (Statoil) and 14 STATOIL subsidiaries in which Statoil owns President H. Norvik a controlling interest of at least Senior Executive Vice President H. Ager-Hanssen Exec. Vice Pres. J.N. Void 50 per cent. In Sweden and Floence, Adm. & Data Processing Denmark the daily operations are Senior Vice President Ti. Willumsen Personnel & Organization run by joint-stock companies Sen. Vice Pros. P.S. Rettedsi Legal Affairs end Company Secretariat fully owned by Statoil’s subsidia Sen. Vice Pres. J. Middeithon ries in the respective countries. Public Affairs Sen. Vice Prea. O.J. Age Research and Development Sen. Vice Pres. J.M. ffvorii Statoil is fully owned by the Quaiiiy Assurance and Satoiy Sen. Vice Pros. J.A. Firing Norwegian State. Corporsie Pianning Sen. Vice Pres. K.E. Egeland EXPLORATION & I I REFINING & I I PETROCHEMICALS & PRODUCTION I I MARKETING I PLASTICS Pres. T. Espedal I Pres. T. Tonne Pres. M. Bekkeheien I I Exec. Vice Pres. I I Exec. Vice Pres. Exec. Vice Pres. J. Bleie I I S. Rennemo I I F.R. Kulás —~ STAFF FUNCTIONS —~ STAFF FUNCTIONS H STAFF FUNCTIONS CRUDE OILS STATOIL PROJECT PLANNING SVENSKA STATOIL AB I PRODUCTS J NATURAL GAS PETROKEMi A.B. J STATOIL BAMBLE —~ Sr. VIce Proc. Sr. Vice Prea. 0. Heigre ISr Vice Pros. P. Melibye Pros. G. Gradin I P.E. Luxhej Pros. S. Riben Sr. Vice Pres. 0. Aas EXPLORATION STATOIL AIS (DK) MARKETING & TRANSPORTATION Sr. Vice Pree. J Pros. J SALES PLASTICS Sr. Vice Pros. S. Sect Pros. J.T. Bjerke R.M. Larsen J. Munk Andersen Sr. Vice Pres. PROJECTS BERGEN OPERATIONS STATOIL MONGSTAD I I. Freyetad Sr. Vice Proc. Sr. Vice Pres. Sr. Vice Prea. T. H. Helgesen I H. Ynneadal 1. Ramatad TECHNOLOGY I STAVANGER OPERATIONS ~r. Vice Prea S. Bergseth Sr. Vice Pros. I E. Endroeon E&P INTERNATIONAL Sr. Vice Pros. J. Hualid A platform for further growth 1/, 1988 was a year of mixed results for the Statoil Group. On the The importance of gas resources to Statoil is increasing. credit side we recorded very strong results in Petrochemicals We are pursuing the plans for Sleipner, Troll and Zeepipe which and Plastics for the second year running and good results in will secure gas supplies to our Continental buyers from 1993. Norol. Income and results from upstream operations suffered Under the framework of the Troll deal we signed an agreement from the impact of low oil prices. On the debit side, 1988 was a for gas deliveries to Spain. The agreement for supply of two very poor year for Refining and Marketing. This was mainly billion cubic metres of gas for electricity generation in the due to costs associated with the expansion of the Mongstad Netherlands is an indicator of a growing market potential for refinery, but also low margins in several markets. gas on the Continent, in the UK and in Scandinavia. Seen as a whole, the results were not satisfactory. Profits Another important task is our effort to enhance the quality before extraordinary items of approximately NOK 4.1 billion of our organization through further development of profes are clearly below par, measured by any scale. The results were sional qualifications and better management. The most efficient weakened not only by relatively low oil and gas prices, but also way of developing professional skills or leadership qualities by the Mongstad development. Management and staff are among our employees is through demanding assignments directing considerable effort towards these aspects of our during the daily routine. The most successful organization is business. one that has a systematic career planning programme for We were confronted with a most demanding task at Mong development of ever more competent professionals and leaders stad early in 1988. Extreme uncertainty prevailed regarding through regular transfers of staff. schedule and costs. Now the old refinery is on stream again, and Among other central challenges facing the Group, I would we are approaching the completion of the new upgrading particularly like to mention the implementation of the joint facilities. Uncertainty associated with commissioning and venture with Himont Inc. in Antwerp; making new commercial start-up has been greatly curtailed. discoveries offshore Norway; cost-effective completion of our I would like to give credit to all those people who helped offshore and onshore developments; improving safety through accomplish the Mongstad project and who have been able to out our Group; and negotiation of new gas contracts that will keep up working morale and high spirits during a particularly allow profitable field developments in the Norwegian sector. demanding period. In the longer term we have a major task in developing a We must prepare for fluctuating and low oil prices in the wider international commitment. Our base will remain on the years ahead as well, and the process of adapting to these Norwegian Continental Shelf, but to succeed in establishing changing conditions has already started. The Group’s operating production in other areas, we must rely on patient long-term and administrative expenditures were reduced by about NOK planning. 350 million in 1988. Our target for the 1989-91 period is a further Our own expertise, combined with the right strategic alli cut of NOK 2 billion. Productivity in all parts of our activities ances, will gradually provide Statoil with a more diversified must be increased. There is a considerable potential for and balanced portfolio of projects, upstream as well as improvement, and we shall succeed in realizing this potential. downstream. It is essential to Statoil’s organization to operate Our efforts to promote safety and reduce accidents were in a sufficiently long range perspective. It is of paramount rewarded in 1988 But we must go further, and our goal is to importance, therefore, that the political handling of Statoil’s halve the number of lost-time injuries over a two-year period. development should command a broad consensus. This will The work to consolidate Statoil’s financial standing is consolidate Statoil’s role and responsibility as Norway’s most proceeding together with our commitments to research, important oil company. development and innovation. For upstream operations, our Statoil is currently in a process of considerable change and criteria for commerciality is break-even at an oil price of USD adaptation.