Total E&P Norge AS
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TOTAL E&P NORGE AS ANNUAL REPORT 20 17 CONTENTS 04 KEY FIGURES 05 BOARD OF DIRECTORS’ REPORT 12 INCOME STATEMENT 13 CASH FLOW STATEMENT 14 BALANCE SHEET 16 ACCOUNTING POLICIES 17 NOTES 27 AUDITORS' REPORT 30 TOTAL'S INTERESTS ON THE NCS 31 MANAGEMENT STRUCTURE 2 2017 TOTAL REVENUES MILLION NOK 29 705 OPERATING PROFIT MILLION NOK 9 890 PRODUCTION (NET AVERAGE DAILY PRODUCTION) THOUSAND BOE 239 RESERVES OF OIL AND GAS (PROVED DEVELOPED AND UNDEVELOPED RESERVES AT 31.12) MILLION BOE 765 EMPLOYEES AVERAGE NUMBER OF FULL-TIME EMPLOYEES 392 3 ANNUAL REPORT 2017 | TOTAL E&P NORGE AS | KEY FIGURES KEY FIGURES MILLION NOK 2017 2016 2015 INCOME STATEMENT Total revenues 29 705 24 762 30 423 Operating profit 9 890 4 164 10 864 Financial income / (expenses) - net (79) (204) (1 020) Net income before taxes 9 811 3 960 9 844 Taxes on income 6 563 1 663 6 014 Net income 3 248 2 297 3 830 Cash flow from operations 18 824 13 351 15 644 BALANCE SHEET Intangible assets 1 416 1 763 2 090 Investments, property, plant and equipment 81 676 85 103 84 056 Current assets 15 775 9 385 7 106 Total equity 10 429 17 154 18 880 Long-term provisions 43 713 37 922 36 139 Long-term liabilities 27 957 32 856 33 504 Current liabilities 16 767 8 319 4 730 OTHER KEY FIGURES Acquisition of property, plant and equipment (in MNOK) 8 919 13 583 15 476 Exploration activity, costs and investments (in MNOK) 544 1 512 1 270 Rate of return on capital employed *) 7.4 % 4.8 % 8.8 % Production cost USD/bbl 5.0 5.5 6.9 Transport cost USD/bbl 3.6 3.6 3.6 PRODUCTION (IN THOUSAND BOE.) Net average daily production 239 235 239 RESERVES OF OIL AND GAS (IN MILLION BOE.) Proved developed and undeveloped reserves at 31.12 765 816 869 EMPLOYEES Average number of employees 392 438 447 *) Net income plus financial expense after tax as a percentage of capital employed at 1 January. Capital employed consists of total equity and liabilities less non-interest carrying debt. 4 ANNUAL REPORT 2017 | TOTAL E&P NORGE AS | REPORT BOARD OF DIRECTORS’ REPORT pursue exploration opportunities in Norway - Total submitted applications in the Awards 1 as operator and partner. in Predefined Areas 2017, which resulted As of 31 December 2017, Total E&P Norge in the award of three licences in January INTRODUCTION participated in 83 licenses on the Norwegian 2018. The licences are located in the Continental Shelf, of which 32 were operated Norwegian Sea and the North Sea. licenses. Total E&P Norge AS is a wholly owned sub- The main events as a partner company and sidiary of the French energy major Total. The Some of the key events in 2017 for Total as license partner in 2017 are: Company is based in Stavanger and respon- operator: - Total became a 7.5% share partner in sible for the Total Group’s exploration and - The finalisation of the Martin Linge top- the Technology Centre Mongstad with production activities in Norway. Total E&P sides process, utility and flare modules by Gassnova (77.5 %), Statoil (7.5%) and Shell Norge has been present in Norway for more the main contractor TechnipFMC/Samsung (7.5%). than 50 years. The Company is the second Heavy Industries (SHI) from the construc- - Total joined the Northern Lights full scale largest E&P company in Norway in terms of tion yard in Geoje, South Korea. The work CCS value chain project as a partner under production and reserves. was completed at the yard by the end of the operatorship of Statoil and with Shell as Total E&P Norge also represents nearly 10 December and the modules left for Norway the other partner. per cent of the global annual production from in January 2018. - Divestment of the Company’s remaining Total’s global E&P business, making the affili- - On 1 May 2017 a tragic crane accident 15% interest in Gina Krog to KUFPEC, in line ate one of the main contributors in the Group occurred at the SHI yard, where six yard with the Group’s strategy context. workers lost their lives and many were in- - Divestment of our interests in the licenses The year 2017 has been characterised by jured. All work at the site was suspended PL120 and PL120CS to Repsol (11% in both a high activity level and substantial changes for a period during investigations, and Total licenses, including a 7.7% interest in the within the Total E&P Norge portfolio and supported SHI with experts in order to find Visund and Visund Sør fields) – a trans- organisation. These changes continue into the fundamental causes and implement action completed in 2018. 2018, pending final closures of these main measures to prevent such an accident from transactions: happening again. The considerable work and efforts by our staff - On 21 August 2017, The Total Group - Following the crane accident, the finali- within the existing scope of activity, contribu- announced that it acquired the global E&P sation of the modules and sail away were tions to considerable costs savings internally business of Maersk Oil and Gas. This trans- postponed, and lifting, hook-up and com- and with our main operators, together with action includes the Maersk Oil Norway missioning in the North Sea moved from awards in the licensing rounds and planning assets and organisation, of which a partici- 2017 to 2018, and the start up of the field of future exploration wells, confirm the Com- pating interest of 8.44% in the giant Johan moved to 2019. pany’s commitment to and strength on the Sverdrup field in the North Sea is included. - In addition to the main modules from SHI, Norwegian Continental Shelf. - On 27 November 2017, Total announced the Living Quarter (LQ) was completed by Total E&P Norge attaches high impor- a sale of all of its interests in the operated Apply in Emtunga, Sweden, under a sub- tance to corporate social responsibility Martin Linge field (51%) and Garantiana contract to the main topsides contractor. and the due compliance by all Company discovery (40%) on the Norwegian Conti- - Digital communication systems were tested staff and our cooperating partners with the nental Shelf to Statoil. between the LQ and the Martin Linge On- Ethics Charter and Code of Conduct set by shore Operations Centre in Stavanger. the TOTAL Group. The year 2017 has - Conversion work was carried out on the The company is a member of the employ- Floating Storage and Offloading unit (FSO) er and industry association Norsk olje og been characterised by operated by Knutsen NYK Offshore Tankers gass and is working actively in many of the a high activity level and AS (KNOT) and the unit was prepared for organisation’s committees and work groups substantial changes within future oil storage offshore for when Martin supporting the industry’s joint interests on the Total E&P Norge Linge comes on stream. policy as well as technical subjects. Notably portfolio and organisation. - The Company continued production from Total E&P Norge’s Managing Director Pierre the subsea fields Skirne and Atla. Atla was Bang was elected to the Norsk olje og gass originally set to cease production in Q3 Board in November 2017. 2015. As a result of these transactions Total will - The Ministry of Petroleum and Energy mainly have production from non-operated approved the application from Total E&P assets in Norway in the years to come. How- Norge to produce the Herja discovery ever, the company maintains its position as well through the Martin Linge installation, the leading foreign producer from its OBO thereby increasing the resource estimate (Operated By Others) assets and continues to with 55 mboe. 5 ANNUAL REPORT 2017 | TOTAL E&P NORGE AS | REPORT related to the Martin Linge project. Some 2 non-conformities and one notification of EXPLORATION AND LICENSING order were identified during one of the ROUNDS HSE PERFORMANCE, audits. Several corrective measures were OPERATED ACTIVITY implemented and presentations and meet- In 2017, the Company continued its search for ings were held with the authorities. Based attractive new exploration acreage: on the input given by the company, all PSA Total’s exploration on the NCS forms part Total E&P Norge continues its efforts in order audits during 2017 are closed. of an overall approach on the geology in the to reach the ambition of being a benchmark In 2017, absence due to illness in the Com- North Sea area across country borders. The company in HSE performance, based on safe pany was at the same level as in 2016; 2.8%. exploration is aiming at creating value by: and environmentally friendly operations, and Total absence (employees’ illness + leave due - Focusing on larger prospects with the has adopted Safety as a core value. to own children’s illness) was 3.3%. potential for stand-alone economic devel- There was one Lost Time Injury (LTI) re- The Company has a Rehabilitation Com- opment corded within the Company’s HSE perimeter mittee which is responsible for providing - Increasing the value of our assets through in 2017. In 2017, the Total Recordable Injury relevant assistance to employees suffer- nearby exploration Rate (TRIR) was 0.64, below the target of ing from long-term illness. Total E&P Norge 0.94. The Lost Time Injury Frequency (LTIF) also has a committee that follows up and Total applied in the 2016 Awards in Pre-de- was 0.64, above the target of 0.47.