2013 Annual Report on Form 20-F 2013 Annual Report on Form 20-F The Annual Report on Form 20-F is our SEC filing for the fiscal year ended December 31, 2013, as submitted to the US Securities and Exchange Commission. © Statoil 2014 STATOIL ASA BOX 8500 NO-4035 STAVANGER NORWAY TELEPHONE: +47 51 99 00 00 www.statoil.com Cover photo: Harald Pettersen 2013 Annual Report on Form 20-F 1 1 Introduction 3 1.1 About the report 3 1.2 Key figures and highlights 4 2 Strategy and market overview 5 2.1 Our business environment 5 2.1.1 Market overview 5 2.1.2 Oil prices and refining margins 6 2.1.3 Natural gas prices 7 2.2 Our corporate strategy 7 2.3 Our technology 9 2.4 Group outlook 10 3 Business overview 11 3.1 Our history 11 3.2 Our business 12 3.3 Our competitive position 12 3.4 Corporate structure 13 3.5 Development and Production Norway (DPN) 14 3.5.1 DPN overview 14 3.5.2 Fields in production on the NCS 15 3.5.2.1 Operations North 18 3.5.2.2 Operations Mid-Norway 18 3.5.2.3 Operations North Sea West 19 3.5.2.4 Operations North Sea East 20 3.5.2.5 Operations South 20 3.5.2.6 Partner-operated fields 21 3.5.3 Exploration on the NCS 21 3.5.4 Fields under development on the NCS 23 3.5.5 Decommissioning on the NCS 25 3.6 Development and Production International (DPI) 25 3.6.1 DPI overview 25 3.6.2 International production 27 3.6.2.1 North America 29 3.6.2.2 South America 30 3.6.2.3 Sub-Saharan Africa 31 3.6.2.4 Middle East and North Africa 31 3.6.2.5 Europe and Asia 32 3.6.3 International exploration 32 3.6.4 Fields under development internationally 35 3.6.4.1 North America 35 3.6.4.2 South America 36 3.6.4.3 Sub-Saharan Africa 36 3.6.4.4 Middle East and North Africa 36 3.6.4.5 Europe and Asia 37 3.7 Marketing, Processing and Renewable Energy (MPR) 38 3.7.1 MPR overview 38 3.7.2 Natural Gas 39 3.7.2.1 Gas sales and marketing 39 3.7.2.2 The Norwegian gas transportation system 41 3.7.2.3 Processing 41 3.7.3 Crude oil, liquids and products 42 3.7.3.1 Marketing and trading 42 3.7.3.2 Terminals and storage 42 3.7.4 Processing and manufacturing 43 3.7.5 Renewable energy 44 3.8 Other Group 45 3.8.1 Global Strategy and Business Development (GSB) 45 3.8.2 Technology, Projects and Drilling (TPD) 45 3.8.3 Corporate staffs and support functions 46 3.9 Significant subsidiaries 47 3.10 Production volumes and prices 47 3.10.1 Entitlement production 48 3.10.2 Production costs and sales prices 49 3.11 Proved oil and gas reserves 50 3.11.1 Development of reserves 53 3.11.2 Preparations of reserves estimates 54 3.11.3 Operational statistics 55 3.11.4 Delivery commitments 57 3.12 Applicable laws and regulations 57 3.12.1 The Norwegian licensing system 58 3.12.2 Gas sales and transportation 59 3.12.3 HSE regulation 60 3.12.4 Taxation of Statoil 60 3.12.5 The Norwegian State's participation 61 3.12.6 SDFI oil and gas marketing and sale 62 3.13 Property, plant and equipment 63 3.14 Related party transactions 63 3.15 Insurance 63 3.16 People and the group 64 3.16.1 Employees in Statoil 64 3.16.2 Equal opportunities 65 3.16.3 Unions and representatives 65 4 Financial review 66 4.1 Operating and financial review 66 4.1.1 Sales volumes 66 4.1.2 Group profit and loss analysis 68 4.1.3 Segment performance and analysis 71 4.1.4 DPN profit and loss analysis 74 4.1.5 DPI profit and loss analysis 76 4.1.6 MPR profit and loss analysis 78 4.1.7 Other operations 80 4.1.8 Definitions of reported volumes 81 4.2 Liquidity and capital resources 82 4.2.1 Review of cash flows 82 4.2.2 Financial assets and debt 83 4.2.3 Investments 86 4.2.4 Impact of inflation 87 4.2.5 Principal contractual obligations 87 4.2.6 Off balance sheet arrangements 88 4.3 Accounting Standards (IFRS) 88 4.4 Non-GAAP measures 89 4.4.1 Return on average capital employed (ROACE) 89 4.4.2 Unit of production cost 90 4.4.3 Net debt to capital employed ratio 91 5 Risk review 92 5.1 Risk factors 92 5.1.1 Risks related to our business 92 5.1.2 Legal and regulatory risks 98 5.1.3 Risks related to state ownership 100 5.2 Risk management 101 5.2.1 Managing operational risk 101 5.2.2 Managing financial risk 101 5.2.3 Disclosures about market risk 103 5.3 Legal proceedings 103 6 Shareholder information 104 6.1 Dividend policy 106 6.1.1 Dividends 106 6.2 Shares purchased by issuer 107 6.2.1 Statoil's share savings plan 107 6.3 Information and communications 109 6.3.1 Investor contact 109 6.4 Market and market prices 110 6.4.1 Share prices 110 6.4.2 Statoil ADR programme fees 111 6.5 Taxation 112 6.6 Exchange controls and limitations 115 6.7 Exchange rates 116 6.8 Major shareholders 117 7 Corporate governance 119 7.1 Articles of association 119 7.2 Ethics Code of Conduct 120 7.3 General meeting of shareholders 121 7.4 Nomination committee 122 7.5 Corporate assembly 123 7.6 Board of directors 126 7.6.1 Audit committee 129 7.6.2 Compensation and executive development committee 130 7.6.3 Safety, sustainability and ethics committee 131 7.7 Compliance with NYSE listing rules 131 7.8 Management 133 7.9 Compensation paid to governing bodies 136 7.10 Share ownership 143 7.11 Independent auditor 143 7.12 Controls and procedures 145 8 Consolidated financial statements Statoil 146 8.1 Notes to the Consolidated financial statements 151 8.1.1 Organisation 151 8.1.2 Significant accounting policies 151 8.1.3 Segments 160 8.1.4 Acquisitions and dispositions 164 8.1.5 Financial risk management 165 8.1.6 Remuneration 168 8.1.7 Other expenses 169 8.1.8 Financial items 170 8.1.9 Income taxes 171 8.1.10 Earnings per share 173 8.1.11 Property, plant and equipment 173 8.1.12 Intangible assets 175 8.1.13 Financial investments and non-current prepayments 176 8.1.14 Inventories 177 8.1.15 Trade and other receivables 177 8.1.16 Cash and cash equivalents 178 8.1.17 Shareholders' equity 178 8.1.18 Finance debt 178 8.1.19 Pensions 181 8.1.20 Provisions 185 8.1.21 Trade and other payables 187 8.1.22 Leases 187 8.1.23 Other commitments and contingencies 188 8.1.24 Related parties 189 8.1.25 Financial instruments: fair value measurement and sensitivity analysis of market risk 190 8.1.26 Condensed consolidating financial information related to guaranteed debt securities 194 8.1.27 Supplementary oil and gas information (unaudited) 198 8.1.28 Subsequent events 209 8.2 Report of Independent Registered Public Accounting firm 211 8.2.1 Report of Independent Registered Public Accounting Firm 211 8.2.2 Report of Independent Registered Public Accounting Firm 212 8.2.3 Report of KPMG on Statoil's internal control over financial reporting 213 9 Terms and definitions 214 10 Forward-looking statements 217 11 Signature page 218 12 Exhibits 219 13 Cross reference to Form 20-F 220 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 20-F (Mark One) REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2013 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ OR SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of event requiring this shell company report _________ Commission file number 1-15200 Statoil ASA (Exact Name of Registrant as Specified in Its Charter) N/A (Translation of Registrant’s Name Into English) Norway (Jurisdiction of Incorporation or Organization) Forusbeen 50, N-4035, Stavanger, Norway (Address of Principal Executive Offices) Torgrim Reitan Chief Financial Officer Statoil ASA Forusbeen 50, N-4035 Stavanger, Norway Telephone No.: 011-47-5199-0000 Fax No.: 011-47-5199-0050 (Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person) Securities registered or to be registered pursuant to Section 12(b) of the Act: Title of Each Class Name of Each Exchange On Which Registered American Depositary Shares New York Stock Exchange Ordinary shares, nominal value of NOK 2.50 each New York Stock Exchange* *Listed, not for trading, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission Securities registered or to be registered pursuant to Section 12(g) of the Act: None Statoil, Annual Report on Form 20-F 2013 1 Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.