Going North TogetherBengt Lie Hansen

President, StatoilHydro Russia

Russian Petroleum & Gas Congress

Moscow, 25 June 2009

Thoroughly prepared for venturing north As Norway’s oil and gas industry develops from south to north we draw on nearly forty years of experience

Going North Together

Statfjord

Kårstø

Kollsnes

Troll

Europipe I

DunkirkZeebrugge

Åsgard

Norne

Haltenpipe

Heidrun

Nyhamna

ÅTS

1979

1985

Europipe II

MelkøyaSnøhvit

Zeepipe I

St Fergus

Vesterled

Teesside

Emden

Frigg

Ekofisk

Status 1979The first step - 1985The second step - 1996The third step - 2000The fourth step – 2006/2007

Easington

Sleipner

Ormen Lange

Key learnings

What seems impossible can be done

… and create significant value

Going North Together

1996

2000

2006/2007

Norwegian Continental Shelf

SleipnerTrollÅsgard Ormen LangeSnøhvit

Ormen Lange - a textbook field development One of the most daunting challenges ever encountered on the Norwegian Continental Shelf

Going North Together

A textbook field development

Field development offshore

Pipeline to shore

Gas processing plant on land

Subsea pipeline to UK

Gas to UK market

Going North Together

Snøhvit –Pioneer in the Arctic The first offshore development in Arctic waters. The ground-breaking LNG project represents an invaluable pool of experience in the harsh climate of the extreme north

Going North Together

Pioneer in the Arctic

Field development offshore

Pipeline to shore

LNG plant

LNG carriers

Gas to new markets

Going North Together

StatoilHydro in Russia

Producing oil from Kharyaga oil field

Partner on Shtokman project Phase One

Cooperation agreements with authorities in north-western Russia

Operating chain of gas stations

20 years in Russia

Introduction

Image courtesy: Sherpa Consulting

Reference case:Size of Shtokman(in same scale)

YTF (BBOE) 104.65Oil/Gas Ratio: 0.2

YTF (BBOE) 5.29Oil/Gas Ratio: 0.2

YTF (BBOE) 10.26Oil/Gas Ratio: 0.5

YTF (BBOE) 12.77Oil/Gas Ratio: 0.5

YTF (BBOE) 14.27Oil/Gas Ratio: 0.5

YTF (BBOE) 12.71Oil/Gas Ratio: 0.5

YTF (BBOE) 3.57Oil/Gas Ratio: 0.766

YTF (BBOE) 20.05Oil/Gas Ratio: 0.5

YTF (BBOE) 8.09Oil/Gas Ratio: 0.064

YTF (BBOE) 4.94Oil/Gas Ratio: 0.7

YTF (BBOE) 6.29Oil/Gas Ratio: 0.5

YTF (BBOE) 21.08Oil/Gas Ratio: 0.2

YTF (BBOE) 5.49Oil/Gas Ratio: 0.7

Russia has considerable offshore resources in the North

Strong partnership on Shtokman It is one of the world’s largest and most challenging undeveloped offshore gas discoveries. This is why we call it the Mother of All Projects

Going North Together

Modultransport

Shtokman

- a combination ofSnøhvit andOrmen Lange

• Field development offshore

• Pipeline to shore

• Gas plant on land for processing and export compression

• Pipeline to Europe

• LNG to Atlantic markets

Shtokman field

Vyborg

Teriberka

Greisfald

North sea

Russia

LNG

Gas pipe

Shtokman field

Vyborg

Teriberka

Greisfald

North sea

Russia

LNG

Gas pipe

Shtokman field

Vyborg

Teriberka

Greisfald

North sea

Russia

LNG

Gas pipe

Shtokman field

Vyborg

Teriberka

Greisfald

North sea

Russia

LNG

Gas pipe

SDAG

Main challenges on Shtokman phase 1

Technical challenges

Arctic environment

Sensitive ecosystem

Ice and iceberg conditions

Remoteness from shore (550 km)

Phase 1 design capacity (70 MSM3/d)

Planning and costs challenges

Tight schedule

Economics

Russian approval process

Organization and human challenges

Developing a new organization

3 different but complimentary cultures

Russian content

Going North Together

Shtokman - a combination of Snøhvit and Ormen Lange

• Securing good progress towards FID

• Strong partnership with Gazprom and Total

Going North Together

The Shtokman project could spur future developments on the Russian Arctic shelf. Therefore, StatoilHydro helps Murmansk and Arkhangelsk prepare for challenges we faced on the NCS in the 1970’s.

North-western Russia – at the dawn of a new era

North-western Russia – at the dawn of a new era

Cooperation Agreements with Murmansk Region Government and Arkhangelsk Region Administration since 2004

Agreements cover supplier

development, university

cooperation, environmental

projects and social cooperation

programs

Going North Together

Going North Together

Productive partnership on Kharyaga StatoilHydro and Total benefit from a decade of close collaboration in north-western Russia, overcoming the forbidding climate of the tundra

Productive partnership on Kharyaga

40% share in Kharyaga oil field on PSA terms

Producing around 20.000 boe/day, aiming for 40.000 boe/day

Valuable business experience with more than 10 years of cooperation with the Russian Federation under the Kharyaga PSA

Kharyaga

Thoroughly prepared for venturing north

Technology enabler as leading operator and architect on NCS

Performing challenging development tasks creates base of experience

Cooperation driven, across borders

Going North Together