Statoil Gas Seminar

Creating value in times of low commodity prices Statoil gas seminar, 18 February 2016, London Jens Økland, EVP, Marketing, Midstream & Processing (MMP) Classification: Internal 2012-10-24 Our industry is in a challenging situation

• Low oil and gas prices Commodity prices 140 Climate 120 100 80 • High costs 60 USD/boe 40 20 0 • Oil and gas in a 2013 2014 2015 2016 Oil Gas (NBP) decarbonising world Costs

2 Sources: Platts, Heren, IHS Statoil’s mid- and downstream business is adding value

• With low commodity prices, the relative MMP1) - adjusted earnings2) importance of our mid- and downstream activity increases 25

• Through Asset Backed Trading, the value of our products can be increased 15

10 Billion NOK • MMP earnings in 2015 exceeds NOK 20 5 billion and accounts for nearly 30% of

Statoil’s adjusted earnings 0 2012 2013 2014 2015 MMP

1) Marketing, Midstream & Processing (MMP). Before 2015: Marketing, Processing and Renewables (MPR) 2) Before tax 3 Source: Statoil Asset Backed Trading – an extensive toolbox for value creation

• Our most successful trading activities imply Adjusted earnings 1) MMP - 2015 use of physical infrastructure or contractual assets − Storages − Refineries − Terminals − Shipping − Rail − Capacity bookings • Active use of assets add flexibility and optionality to our portfolio and increase our Natural gas Europe Natural gas US competitiveness Liquids Other

1) Before tax 4 Source: Statoil Resetting costs in MMP

Continue efforts to become more competitive

A sustained culture of continuous improvement

Respond to complexity with simplicity

5 Opportunities in European gas markets

• Europe has a large and growing supply gap • Norwegian gas is well placed as a cost-efficient supply source for the long term • Due to its cleanness and versatility, gas will remain a key part of European energy supply

Outlook for EU demand and indigenous supply Outlook for Norwegian gas production

600

500

400 Norway Import needs 300 Indigenous EC reference 200 EC 2030 policies

100 IEA WEO 2015

0 2012 2020 2025 2030

6 Sources: IEA, European Commission, Norwegian Petroleum Directorate 7

European gas market outlook Statoil gas seminar, 18 February 2016, London Olav Kolbeinstveit, Vice President, Statoil Market Analysis Classification: Internal 2012-10-24

European gas price drivers – more than oil Price fall less severe than for oil Brent and global gas prices USD/MMBtu Key European gas market drivers 25 . Demand Forward prices* • Competing fuels 20 • Temperature 15 FW market1) . Supply 10 • Flexible long-term contracts

• LNG supply 5

0 2010 2011 2012 2013 2014 2015 2016 2017 2018 Japan - Korea Spot LNG NBP spot (UK) Henry Hub (US) Brent

1) Forward prices as of 15 February 2016, NYMEX Henry Hub Forward 12 February 2016 9 2) Sources: Platts, ICE, NYMEX, Statoil ASA Growing global LNG liquefaction capacity The LNG market is cyclical LNG production capacity BCM US LNG exports: 600 . Limited volumes in 2016 500 . Significant volumes contracted by portfolio players 400 . Tolling contracts 300

200

Current LNG price level does not 100 justify new investments 0 2010 2015 2020

Existing capacity Australia US Others

10 Source: IHS CERA, Pira, Statoil ASA US LNG currently on the margin in Europe US LNG will flow according to price signals – or at all?

Short-run marginal cost ranges for US LNG supply to Asia and Europe

Asia North America Europe USD/MMBtu USD/MMBtu USD/MMBtu 5.3** 4.5** 1.7 - 3 1 - 1.5 4.8 - 6.1 4.1 - 4.6 0.4

2.7*

JKM Shipping HH Shipping/Regas NBP

* NYMEX Henry Hub Forward curve for Calendar 2017 12 February 2016 11 ** ICE NBP Forward curve for Calendar 2017 15 February 2016 and Platts JKM spot Source: NYMEX, ICE, Platts, Pira, Statoil ASA US LNG most expensive source to Europe

Financial Times 3 February 2016

12 EU28 gas consumption has bottomed out Gas to power is expected to recover EU 28 gas demand per sector . Historic drop in consumption BCM

mainly related to gas to power 600

500 . No growth expected in the 400 buildings sector 300

. Stable demand in the industry 200

sector 100

0 2005 2010 2014 2015 2016E

Buildings Industry Others Electricity/CHP/Heat Plants

13 Sources: European TSO’s, ENTSOG, Eurostat, IEA, CCGTs1) in the UK competitive with coal plants Carbon tax drives gas to power recovery UK Coal switching range and gas-to-power consumption . Gas to power demand is price sensitive p/th mcm/d 100 100 90 90 80 FW 80 . market2) Growing political willingness to 70 70 curb use of coal 60 60 50 50 40 40 30 30 20 20 10 10 0 0 2010 2011 2012 2013 2014 2015 2016 2017 2018

Coal Switching Range (LHS) Gas-to-power consumption (RHS) NBP (LHS)

1) Combined Cycle Gas Turbine (CCGT) 2) Forward prices as of 15 February 2016 14 Sources: ICIS Heren, ICE, Statoil ASA EU 28 natural gas imports increasing Record low indigenous production in 2015 Indigenous production EU 28 EU 28 gas imports BCM BCM 250 400 90%

200 300 80%

150

200 70% 100

100 60% 50

0 0 50% 2005 2010 2014 2015 2016E 2005 2010 2014 2015 2016E LNG North Africa Russia Norway Imports in % of consumption

15 Sources: European TSO’s, Eurostat, IEA, PIRA Dutch gas production capped Seasonal flexibility hit Groningen production 60 . Groningen BCM • Production cap 27 bcm 40 • Was key source of flexibility 20 0 2005 2010 2014 2015 2016E . Flexible Norwegian gas 8 Seasonal output important BCM/month 6 Min-Max 5Y 4 5Y Average 2 2015

0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

16 Source: NAM, Dutch Energy ministry Concluding remarks

. Challenging period – risks to the upside . LNG connecting regional markets . Increasing import needs to Europe

17 18

Capturing business opportunities Statoil gas seminar, 18 February 2016, London Tor Martin Anfinnsen, Senior Vice President, Marketing and Trading Classification: Internal 2012-10-24

A major gas player with Europe as gravity point

NCS NCS Melkøya LNG • Largest gas producer on NCS1) • Pipeline gas to North West Europe • Melkøya LNG facility

USA • Shale gas production in Marcellus

• Deliveries of gas to Toronto and US shale gas New York City

Statoil offices with natural gas business activities

20 1) Norwegian continental shelf (NCS) Statoil’s gas is well positioned in Europe

Access to an integrated and flexible Large gas resource potential Proximity to markets pipeline infrastructure on the NCS

Polarled Pipeline LNG

Åsgard transport Ormen Lange 1450 Nyhamna Norway 400 – 1200 Tampen Link Troll km Russia 3 1922 6000 – 7000km Kollsnes bn Sm Vesterled Kårstø Sleipner Draupner St Fergus Europipe II Ekofisk Europipe I

Norpipe Langeled Easington Zeepipe Emden/ 625 Franpipe Dornum Caspian Zeebrugge Dunkerque Reserves * Algeria Region Contingent resources in fields/discoveries ~3000 km ~4000 km Undiscovered

* Statoil share of NCS reserves ~34% 21 Source: Norwegian Petroleum Directorate (NPD) resource account as of 31.12.2014 Our marketing strategy

• Developments in gas market give new Statoil’s contract portfolio has changed sales channels and opportunities Oil indexed − Transformation away from oil-indexing Gas indexed − Unbundling of the value chain and third Other

party access 2010 2014 − Development of liquid hubs European gas prices are converging 70 • Long-term contracts are still important, 60 50 but take on a modernised form DE 40 IT 30 UK EUR/MWh 20 NL 10 0 2011 2012 2013 2014 2015 2016

22 Source: ICIS Heren Capturing value at the trading desk

Capitalise on NCS Manage risk in Monetise total portfolio equity gas position contract portfolio through trading

Optimising production in Keep volume commitments and Execute optimisation strategies time, volume and geography safeguard cash flow and trade around total portfolio

23 Seising upstream opportunities on the NCS

Aasta Hansteen

Providing services to NCS peers Polarled • Gas modulation, transport and back-up services • Dispatching services • Blending services to meet quality specs • Fuel and injection gas

24 Taking opportunities in a global LNG market

• Highly flexible LNG portfolio creating new business opportunities • The LNG protfolio is made up predominantly of equtiy volumes combined with third party volumes • The global LNG market provides trading opportunities for our LNG portfolio

25 Gas meets UK’s energy needs

• Coal phase out and falling indigenous production is creating an energy gap • Gas is key to a stable energy solution

Coal phase out gives energy gap in UK Growing UK import need

100% Generation gap 120 80% Coal 100 Imports 60% 80 ? Other 60

40% Gas bcm 40 20% Renewables 20 Nuclear 0% 0 2013/2014 Late 2020s 2000 2005 2010 2015 2020 2025 2030 Net gas production Net gas demand

26 Concluding remarks

. Despite current market prices, our outlook for gas in Europe remains positive . Statoil’s gas activity has an extensive toolbox of value-creating options . Coal phase out in the UK is giving new opportunities for gas

27 28

Longer-term gas market perspectives Statoil gas seminar, 18 February 2016, London Eirik Wærness, Senior Vice President and Chief Economist Classification: Internal 2012-10-24

Long-term Energy Perspectives Short-term volatility – long-term trends, across different scenarios

Commodity prices (real Dec 2015, indexed Feb 1997=100) 800

Brent HH 600 NBP Reform, 2.8% Coal 2012 Renewal, 2.9% 400 Rivalry, 2%

200

0 1997 2002 2007 2012

30 Source: Thomson Reuters Datastream It takes decades to change the global fuel mix New renewables set for rapid growth, robust gas demand across scenarios World fuel mix 1972 - 2040

100 % . Economic growth and structure . Energy efficiency improvements 80 % New renewables . Demography, urbanisation Biomass & waste 60 % Hydro . Energy and climate policies Nuclear . 40 % Geopolitics, energy security Gas . Fuel costs, availability, prices Oil 20 % Solid fuels . Technological evolution, costs

0 % . Consumer preferences 1972 2012 Reform Renewal Rivalry 2040

31 Source: IEA (history), Statoil (projections) Paris COP21 – a breakthrough? Achieving the targets entails a significant role for natural gas

. Significant improvement: common target . Several scenarios possible − The outcome is NOT given . Implications for natural gas: − Good news, if implemented − INDCs1) typically not concrete on gas − Replacement of coal required − Carbon emission schemes revitalised?

32 1) Intended Nationally Determined Contributions (INDC) Oil and gas are here to stay Considerable supply gap in all scenarios, and gas demand increases in all

Oil demand*, supply from existing fields Gas demand, supply from existing fields Mbd Bcm

Demand range Supply gap Demand range Supply gap Decline Production range Decline Production range 120 5000

100 4000 80 3000 60 2000 40

20 1000

0 0 2012 2020 2030 2040 2012 2020 2030 2040

* Excl. Bio-fuels 33 Source: IEA (history), Statoil (projections) Regional variation in long-term demand outlook Non-OECD Asia drives global markets, ~500-750 bcm demand growth

Gas demand development Gas demand growth by region 5 000 Bcm Reform case, Bcm Reform 5 000 Rivalry Renewal 4 000 Reform 4 500

3 000

4 000 2 000 Mature markets 3 500 1 000

0 3 000 2000 2012 2020 2040 2012 2040 OECD Russia/FSU Non-OECD Asia Middle East Other Mature markets: OECD & Russia / FSU

34 Source: IEA (history), Statoil (projections) Europe’s gas imports will grow EU has to pursue a policy making Europe attractive for gas suppliers

bcm 600

500 Demand 400 EU gas import requirements 300

200 Norway Indigenous 100 EC reference EC 2030 policies 0 IEA WEO 2015 2012 2020 2025 2030

35 Source: European Commission, IEA, Statoil, Eurogas Key long-term issues in summary

. It takes decades to change the fuel mix . Demand driven by Non-OECD Asia . COP21 an important milestone . Europe needs more gas imports . Gas demand increases in all scenarios . Regional gas pricing globally linked

36 37 Conclusions

. Statoil MMP is an important value driver for Statoil

. Our asset backed trading model is an important tool for generating value . We maintain a positive view on the long-term outlook for gas in Europe

38 39 Forward-looking statements

This presentation contains certain forward-looking statements that involve risks and uncertainties. In some These forward-looking statements reflect current views about future events and are, by their nature, subject cases, we use words such as "ambition", "continue", "could", "estimate", "expect", "focus", "likely", "may", to significant risks and uncertainties because they relate to events and depend on circumstances that will "outlook", "plan", "strategy", "will", "guidance" and similar expressions to identify forward-looking statements. occur in the future. There are a number of factors that could cause actual results and developments to differ All statements other than statements of historical fact, including, among others, statements regarding future materially from those expressed or implied by these forward-looking statements, including levels of industry financial position, results of operations and cash flows; changes in the fair value of derivatives; future product supply, demand and pricing; price and availability of alternative fuels; currency exchange rate and financial ratios and information; future financial or operational portfolio or performance; future market interest rate fluctuations; the political and economic policies of Norway and other oil-producing countries; position and conditions; business strategy; growth strategy; future impact of accounting policy judgments; EU directives; general economic conditions; political and social stability and economic growth in relevant sales, trading and market strategies; research and development initiatives and strategy; projections and areas of the world; the sovereign debt situation in Europe; global political events and actions, including war, future impact related to efficiency programs, market outlook and future economic projections and terrorism and sanctions; security breaches; situation in Ukraine; changes or uncertainty in or non- assumptions; competitive position; projected regularity and performance levels; expectations related to our compliance with laws and governmental regulations; the timing of bringing new fields on stream; an inability recent transactions and projects, completion and results of acquisitions, disposals and other contractual to exploit growth or investment opportunities; material differences from reserves estimates; unsuccessful arrangements; reserve information; future margins; projected returns; future levels, timing or development of drilling; an inability to find and develop reserves; ineffectiveness of crisis management systems; adverse capacity, reserves or resources; future decline of mature fields; planned maintenance (and the effects changes in tax regimes; the development and use of new technology; geological or technical difficulties; thereof); oil and gas production forecasts and reporting; domestic and international growth, expectations and operational problems; operator error; inadequate insurance coverage; the lack of necessary transportation development of production, projects, pipelines or resources; estimates related to production and infrastructure when a field is in a remote location and other transportation problems; the actions of development levels and dates; operational expectations, estimates, schedules and costs; exploration and competitors; the actions of field partners; the actions of governments (including the Norwegian state as development activities, plans and expectations; projections and expectations for upstream and downstream majority shareholder); counterparty defaults; natural disasters and adverse weather conditions, climate activities; oil, gas, alternative fuel and energy prices; oil, gas, alternative fuel and energy supply and change, and other changes to business conditions; an inability to attract and retain personnel; relevant demand; natural gas contract prices; timing of gas off-take; technological innovation, implementation, governmental approvals; industrial actions by workers and other factors discussed elsewhere in this report. position and expectations; projected operational costs or savings; projected unit of production cost; our Additional information, including information on factors that may affect Statoil's business, is contained in ability to create or improve value; future sources of financing; exploration and project development Statoil's Annual Report on Form 20-F for the year ended December 31, 2014, filed with the U.S. Securities expenditure; effectiveness of our internal policies and plans; our ability to manage our risk exposure; our and Exchange Commission, which can be found on Statoil's website at www.statoil.com. liquidity levels and management; estimated or future liabilities, obligations or expenses and how such liabilities, obligations and expenses are structured; expected impact of currency and interest rate fluctuations; expectations related to contractual or financial counterparties; capital expenditure estimates Although we believe that the expectations reflected in the forward-looking statements are reasonable, we and expectations; projected outcome, objectives of management for future operations; impact of PSA cannot assure you that our future results, level of activity, performance or achievements will meet these effects; projected impact or timing of administrative or governmental rules, standards, decisions, standards expectations. Moreover, neither we nor any other person assumes responsibility for the accuracy and or laws (including taxation laws); estimated costs of removal and abandonment; estimated lease payments, completeness of the forward-looking statements. Unless we are required by law to update these gas transport commitments and future impact of legal proceedings are forward-looking statements. You statements, we will not necessarily update any of these statements after the date of this report, either to should not place undue reliance on these forward-looking statements. Our actual results could differ make them conform to actual results or changes in our expectations. materially from those anticipated in the forward-looking statements for many reasons.