shaping the future Annual report and accounts 2006 Shaping the future today Students get the chance every year to participate in our summer project and have a go at specifi c assignments. This team has produced a model which shows subsea separation. From left: Magne Hestness, Anne Person, Øystein K Rande and Oddbjørn R Nilsen. The way to the real world is short: we are starting up the world’s fi rst commercial subsea facility for separating oil and gas from water and sand on our Tordis fi eld in the North Sea. This is one of many examples which demonstrate our ability and courage to develop and adopt new technology which can enhance our value creation. An article on pages 8-13 describes the subject in more detail. We look at tomorrow’s technological challenges, which some of the students in this opening illustration to our annual report may be involved in solving a few years from now. A company which is a front runner in key technology areas does not wait for the future to happen but forms the future itself. This applies not least in the environmental area, and in 2006 we demonstrated our ability to be innovative and our will to tackle the climate challenges with new industrial solutions. Key fi gures INCOME CASH FLOW RETURN NOK billion NOK billion Per cent 120 70 30 60 100 25 50 80 20 40 60 15 30 40 10 20 20 10 5 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 Income before financial items, other items, Cash flow used Return on average capital income taxes and minority interest in investing activities employed after tax Net income Cash flow provided by operating activities OIL PRODUCTION/PRICE GAS PRODUCTION/PRICE PROVED OIL/GAS RESERVES NOK/scm 1,000 boe per day USD/barrel 1,000 bbls per day Million boe 800 2.00 500 5,000 450 700 60 400 4,000 600 1.50 350 500 300 3,000 40 400 250 1.00 300 200 2,000 150 200 100 1,000 20 0.50 100 50 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 Entitlement oil production Sales equity gas production Natural gas Average oil price Brent Blend Average gas price Oil and NGL CARBON DIOXIDE (CO2) TOTAL RECORDABLE INJURY FREQUENCY SERIOUS INCIDENT FREQUENCY Million tonnes 14 8 12 12 10 6 10 8 8 6 4 6 4 4 2 2 2 0 -2 2002 20032004 2005 2006 20022003 2004 2005 2006 2002 2003 2004 2005 2006 Number of total recordable injuries per million Number of serious incidents per million working hours CO2 reductions made through measures working hours implemented between 1997 and 2006 for Statoil operations Total CO2 emissions from Statoil operations USGAAP – – Hovedtall Financial highlights 20042006 20032005 20022004 20012003 20002002 FinansielleFinancial information data (i millioner (NOK kroner) million) DriftsinntekterTotal revenues 306425,166 218 249387,411 375 243301,443 814 236245,640 961 230240,447 425 ResultatIncome before før finans, financial andre items, poster, other skatt items, og minoritetsinteresser income taxes 65 107 48 916 43 102 56 154 59 991 Åretsand minority resultat interest 116,88124 916 1695,043 554 1665,085 846 1748,873 245 1643,065 153 KontantstrømNet income fra operasjonelle aktiviteter 3840,615 807 3030,730 797 2424,916 023 3916,554 173 5616,846 752 KontantstrømCash flow provided benyttet by operatingtil investeringsaktiviteter activities 3160,913 959 2356,250 198 1638,807 756 1230,797 838 1624,023 014 RentebærendeCash flow used gjeld in investing activities 3640,084 189 3737,664 278 3731,959 128 4123,198 795 3616,756 982 NettoInterest-bearing rentebærende debt gjeld 2035,786 326 2034,093 906 2336,081 592 3437,278 077 2337,128 379 GjeldsgradNet interest-bearing debt 24,94519,0% 19,28722,6% 20,218 28,7% 20,906 39,0% 23,592 25,0% AvkastningNet debt to på capital gjennomsnittlig employed sysselsatt kapital etter skatt 23,5%16.8% 18,7%15.1% 14,9%18.9% 19,9%22.6% 18,7%28.7% Return on average capital employed after tax 27.1% 27.6% 23.5% 18.7% 14.9% Operasjonelle data Olje-Operational og naturgassproduksjon information (tusen fat o.e./dag) 1 106 1 080 1 074 1 007 1 003 SikreCombined olje- ogoil andnaturgassreserver gas production (millioner (thousand fat boe/day) o.e.) 41,135 289 41,169 264 41,106 267 41,080 277 41,074 317 Proved oil and gas reserves (million boe) 4,185 4,295 4,289 4,264 4,267 Produksjonskostnader (USD/fat) 3,5 3,2 3,0 2,8 3,0 Funn-Production og utviklingskostnader cost (NOK/boe) (USD/fat) (3-års gjennomsnitt) 26.68,5 22.35,9 22.4 6,2 22.4 9,1 8,2* ReserveerstatningsrateReserve replacement ratio (3-års (three-year gjennomsnitt) average) 1,010.94 0,951.02 0,781.01 0,680.95 0,860.78 AksjeinformasjonShare information (i (in kroner, NOK, unntattexcept numberantall aksjer) of shares) ResultatNet income per peraksje share 11,5018.79 14.197,64 11.50 7,78 8,317.64 8,187.78 AksjekursShare price Oslo at OsloBørs stock31. desember exchange (Oslo Børs) 31 December 165.2595,00 155.0074,75 58,5095.00 61,5074.75 58.50 - VektetWeighted gjennomsnittlig average number antall of utestående ordinary aksjer 2 166 142 636 2 166 143 693 2 165 422 239 2 076 180 942 1 975 885 600 shares outstanding 2,161,028,202 2,165,740,054 2,166,142,636 2,166,143,693 2,165,422,239 (1) Engangseffekter gjelder spesielle effekter knyttet til fjerningsfordelingsloven, salgsgevinster, nedskrivninger og avsetninger. Se «Ledelsens finansielle analyse». * Follow-up changed from USD/boe to NOK/boe. NettoNet interest-bearing rentebærende gjeld debt = ProduksjonskostnaderProduction costs per barrel per fat oil o.e. = virksomhet.boilers, furnaces, Totalt engines, CO2-utslipp flares, omfatter drilling of BruttoGross interest-bearing rentebærende gjeld debt fratrukket less cash andbetal- Driftskostnaderequivalent = forbundet med produk- alleexploration utslippskilder and production som turbiner, wells kjeler, and well ingsmidlercash equivalents. og kortsiktige investeringer. sjonenOperating av oljeexpenses og naturgass, associated dividert with pro- med ovner,testing/workovers. motorer, fakler, Reductions boring av in lete- emissions og samletduction produksjon of oil and natural (løfting) gas dividedav olje ogby total produksjonsbrønnerare accumulated for the og period 1997-2006. GjeldsgradNet debt to = capital employed = naturgass.production (lifting) of oil and natural gas. brønntesting/brønnopprenskning. ForholdetThe relationship mellom between netto rentebærende net interest- OppnåddeTotal recordable reduksjoner injury i frequencyutslippene er= gjeldbearing og debt sysselsatt and capital kapital. employed. Funn-Reserve og replacement utviklingskostnader ratio = = akkumulertThe number forof total perioden recordable 1997-2004. injuries per BeregnesAdditions tout provedfra nye reserves,sikre reserver, including million working hours. Employees of Statoil GjennomsnittligAverage capital employedsysselsatt = kapital = eksklusivacquisitions kjøp and og disposals, salg av reserver. divided by volu- Personskadefrekvensand its contractors are included.= Definitions GjennomsnittAverage of the av capital kapitalen employed som er at syssel- the mes produced. Antall personskader per million arbeids- Definisjoner sattbeginning ved begynnelsen and end of the og accounting slutten av period. Reserveerstatningsrate = timer.Serious Statoil-ansatte incident frequency og leverandører = er regnskapsperioden.Capital employed is net Sysselsatt interest-bearing kapital er TilgangBarrel of av oil nye equivalent sikre reserver, (boe) inkludert = kjøp inkludert.The number of incidents of a very serious nettodebt plus rentebærende shareholders’ gjeld equity pluss and egenkapital ogOil salg,and gas dividert volumes med expressed produserte as areserver. common nature per million working hours. An incident ogminority minoritetsinteresser. interest. unit of measurement. One boe is equal to Alvorligis an event hendelsesfrekvens or chain of events which = has Oljeekvivalentone barrel of crude, (o.e.) or =159 standard cubic Antallcaused uønskede or could have hendelser caused med injury, stor illness alvor- AvkastningReturn on average på gjennomsnittlig capital employed Oljemetres og gassof gas. omregnet til felles måleenhet. lighetsgradand/or damage per to/loss million of arbeidstimer. property, the En sysselsattafter tax = kapital etter skatt = 1 fat oljeekvivalent er lik 1 fat råolje eller uønsketenvironment hendelse or a third er en party. hendelse eller et ÅretsNet income resultat plus pluss minority minoritetsinteresser interest and net og 159Carbon standard dioxide kubikkmeter (CO2) = naturgass. hendelsesforløp som har forårsaket eller nettofinancial finanskostnader expenses after etter tax as skatt a percentage i prosent Carbon dioxide emissions from Statoil ope- kunne ha forårsaket personskade, sykdom avof capitalgjennomsnittlig employed. sysselsatt kapital. Karbondioksidrations embrace (CO all sources2) = such as turbines, og/eller skade på/tap av materiell, skade Karbondioksidutslipp fra Statoil-operert på miljøet eller tredjepart. Contents Our future Chief executive Helge Lund: A will to shape the future 2 Statoil’s strategy 4 Statoil today 6 Our history 6 Topic: An early and bold adopter of technology 8 Our business Overview of our business 14 Exploration & Production Norway 18 International Exploration & Production 21 Natural Gas 24 Manufacturing & Marketing 26 Technology & Projects 29 People and society 31 The environment 34 Our results Directors’ report 2006 40 The corporate executive committee 50 Corporate governance 52 Articles of association for Statoil ASA 54 The Statoil share 62 Operating and fi nancial review and prospects 64 The Statoil group - USGAAP 95 Auditors’ report 139 Proved reserves report 140 HSE accounting for 2006 142 General information 150 In addition to this report we publish the sustainability report, the fi nancial statements according to the Norwegian accounting principles and the 20-F report as specifi ed by the US Securities and Exchange Commission. Read more about these reports on page 152. STATOIL ANNUAL REPORT AND ACCOUNTS 2006 1 2 STATOIL ANNUAL REPORT AND ACCOUNTS 2006 Our future A will to shape the future by chief executive Helge Lund For the third consecutive year, Statoil has delivered its best-ever annual result.