Den norske stats oljeselskap a.s/Annual report and accounts 19n stato11 Table of contents Page 3 The Board of Directors, Page 26 Recommendation from the The Certified Public Company General Assembly, Accountant, The Company Auditor's Report General Assembly Page 27 More about Statfjord field Page 5 Highlights development Page 7 Projects Page 30 Drilling on blocks where Page 8 Report by the Board Statoil held interests in 1977 of Directors Page 13 The Articles of Association Page 19 Statement of profit and Page 32 Survey of Statoil interests loss for 1977 in licenses allocated as of Page 20 Balance sheet as of 10 Jan. 1978 31 December 1977 Page 33 Survey of the Norwegian Page 22 Comments to financial continental shelf south of statements the 62nd parallel Page 25 Source and application Page 34 Administration of funds The main Statoil administration building, Stavanger, Norway. Statoi I investments Other investments II Offshore field development Millions Possible recoverable reserves of Kroner in proven fields ------------------ 2000 Millions of tons of oil equivalents =======:!""""~~~==----------800 1974 1975 1976 1977 Oil Gas Total value of Statoil transactions involving petroleum and petroleum products Refined products Crude oil and gas Number of Statoil employees II Millions of Kroner - ----------------- 1800 500 400 300 200 100 1974 1975 1976 1977 1974 1975 1976 1977 4 Highlights Amounts in millions of N.kr. 1977 1976 1975 1974 1973 Sales 1682.6 1298.3 382.3 98.2 Salaries and social costs 55.3 36.5 20.1 8.0 2.1 Depreciation 47.0 32.8 1.1 0.3 0.2 Financial expenditures 35.6 -4.8 7.9 7.0 7.6 Financial result -112.1 -134.2- 62. 2 - 29.0 -13.7 Investments 1718.6 1889.8 933.1 64.5 238.3 Total assets 5554.8 3660.9 1491.6 502.9 359.6 Share capital issued as of 31 Dec. 1851.5 1551.5 755.0 305.0 155.0 Number of employees as of 31 Dec. 506 401 244 118 54 5 Projects Activity Company/I icense Operator Location Statoil Type of share activity Exploration Prod. license 038 Statoil Blocks 50% Drilling 613, 15111 , 15112 Prod. license 044 Statoil Block 50 % Drilling 119 Prod. license 045 Statoil Blocks 50 % Drilling 24111 , 24112 Prod. license 046 Statoil Blocks 50 % Drilling 1518 1519 Field development Prod. license 037 Mobil Blocks 50 % Oil/gas discovery Statfjordl M u rch ison 3319, 33112 Prod. license 024 Elf Block 2511 5% Gas discovery Frigg Prod. license 036 Elf Block 2514 40 % Gas discovery Heimdal Transportation Norpipe a.s Separate adm. Stavanger 50 % Pipelines Norpipe Petroleum UK Ltd Separate adm. Teesside 50 % Oil/gas conden- sate terminal Refining and Marketing Rafi nor Separate adm. Mongstad 30% Refinery Norsk Olje a.s Separate adm. Oslo 15 % Marketing l/S Noretyl Norsk Hydro Bamble 33 % Petrochemicals l/S Norpolefin Saga Petrokjemi a.s & Co. Bamble 33113 % Petrochemicals Service company A/S Coast Center Base Ltd. Separate adm. Sotra 50 % Supply base &Co. Scene from the christening of the Statfjord A platform on 22 November 1977. Oddbjerg Kloster presided as godmother. 7 Report of the Board of Directors Statoil reaches a milestone will make an annual presentation to after five years the Parliament of the main trends of its plans for Statoil so that the Nor­ For the past five years, the Norwegian wegian Parliament may express an State through Statoil has been actively opinion prior to Initiation of these involved in commercial activities In plans. Thus, Statoil is in the unique the Norwegian petroleum Industry. On position as compared with other state­ this occasion, it would be natural to owned companies, that all decisions look back at some of the most slg· involving the important phases of nificant reasons for this involvement, company activities are made with as well as the conditions and goals the approval of the political authorities. which from the beginning formed the basis of decisions made by the political Within this broad frame of reference authorities, and to what degree Statoil imposed by the authorities, one aim contributed to fulfilling these goals. has been that Statoil maintain freedom of action in commercial activities. The * Statoil implements the Board of Directors is of the opinion business interests of the that on the basis of the above regu­ State in the petroleum industry lations, a reasonable balance has On several occasions, the Norwegian been attained between the need for Parliament has established the goal such commercial freedom and the of Norwegian petroleum policy as the necessity for political control. securing of State control of the actlvi· ties within this sector. The authorities have the opportunity of reacting on * Statoil implements the increased the activities through the making of utilization of Norwegian goods responsible decisions and regulations. and services and the build-up In addition to this, the State, through of Norwegian know-how Statoil, can have a direct influence on It has been presumed since the estab­ the commercial decisions In the lishment of the company that Statoil various concessions. contribute to promotion of Norwegian goods and services. With this in mind, The Insight and know-how gradually Statoil has given priority to the acqui­ built up within Statoil, partially through sition of the necessary understanding its own activities and partially In co-oper­ of Norwegian commercial possibilities ation with other oil companies, Is for deliveries in the various areas. made available to the authorities. This insight is utilized to soften up Through Statoil, the Norwegian customary supplier-contractor rela­ authorities thus receive a thorough, tions and stimulate the foreign opera­ detailed study with commercial tor companies to utilize the possibilities insight into projects on the Norwegian available in Norway in all the areas in continental shelf, during the explo­ which Norwegian business and ration, development and production industry are competitive. phases. In this manner the Norwegian political authorities are supplied Naturally, the company attempts to with extensive, basic material required promote the use of Norwegian goods for Important decisions. has been concentrated on Statfjord development because this is the first The Board of Directors is of the opinion field in which Statoil has had a sig· that this extensive, in-depth business nificant share. Statoil influence con­ Insight which Statoil will have as tributed to a 60 percent share of the licensee, will also stimulate and con­ deliveries to date to Statfjord, being tribute to the activities of the other secured for Norwegian suppliers. The operators and ensure that experience comparable share of Norwegian gained does benefit the new projects deliveries is approximately 15 percent and Norwegian society. for Ekofisk and about 20 percent for Frigg. The Norwegian Parliament has pre­ sumed that Statoil activities should be subject to parliamentary direction The company has contributed to and control, because of the signi­ building up and coordinating Nor­ ficance which the company will have wegian know-how and technical know­ for Norwegian society. Therefore, in ledge in several areas. One such example 1974, the Norwegian Parliament Is the build-up of know-how in the approved the regulations regarding area of geophysical data, through the the administration and control of establishment of Statex and later the Statoil. This involves the obligation merger of Statex with Geco. Further­ on the part of the Board of Directors more, it should be mentioned that to present all issues of principal sig· Norwegian technical expertise has nlflcance to the General Meeting, been assembled through the establish· which Is the Ministry of Petroleum ment of the engineering company of and Energy in accordance with para­ Norwegian Petroleum Consultants, graph 10 of the Articles of As­ comprised of ten major Norwegian sociation. For its part, the government corporations. 8 * The extent of 5 years of oil has ownership interests. After Figure 1: Production of petroleum on Statoil aictivities the negotiations between the British the Norwegian continental shelf. During the course of these five years and the Norwegian authorities, the the company has become engaged Norwegian share of the Frigg field • Actual production was fixed at 60.82 percent. The Statoil in all areas within the petroleum sec­ Expected production from fields tor, in accordlance with its aims, share of the total field reserves is decided to be developed unanimously approved by the Nor­ approximately three percent. Millions of tons of oil equivalents wegian Parliament in 1972, and in 70 accordance with and to the extent The gas pipeline from the Ekofisk established by the Norwegian political field to Emden in West Germany first authorities. This is the case with went on stream in September. This respect to exploration activities in pipeline is owned by Norpipe a.s in which Statoil is an independent ope­ which Statoil holds a 50 percent rator. The activities also include parti­ ownership interest. cipation in thie development of Stat­ fjord and Fri~Jg, in transportation Jn 1977, drilling was begun on 20 activities through the Norpipe com­ exploration and delineation wells on panies, among others, in petrochemical the Norwegian continental shelf. activities at Bamble, in refining at Statoil held ownership Mongstad, and in marketing of crude interests in all the blocks where there oil on the international market and was drilling. Statoil was responsible of refined products on a domestic as operator for four of the wells, and level through ·Norsk Olje a.s. the company proved new hydrocarbon discoveries on block 119 and 1519. * Future p1erspectives Jn the years to1 come Norwegian society Total investments in the company will receive siignificant income from projects in 1977 amounted to approxi­ 197• 75 76 77- 78 79 80 8 1 82 83 a; 85 86 87 88 89 90 the petroleum industry.