Financial statements and review 1st quarter 2011

Transcription

1 011 Financial statements and review 1st quarter 2011

2 Results for first quarter 2011 Statoil's first quarter 2011 net operating income was NOK 50.7 billion, a 28% increase compared to NOK 39.6 billion in the first quarter of. The quarterly result was mainly affected by a 33% increase in the average prices for liquids measured in NOK, a 20% increase in average gas prices, and a 12% decrease in liftings, when compared to the same period last year. "In the first quarter of 2011 we delivered good financial results and passed important industrial milestones. Through the Skrugard discovery and the new acreage awarded Statoil in the Barents Sea, we take new steps in opening a new energy frontier in the North", says Helge Lund, Statoil's chief executive officer. Statoil has started production and closed the deals that bring industrial partners into its Leismer and Peregrino field developments. Statoil's operatorship of these assets in Canada and Brazil has created substantial shareholder value. Statoil has announced important discoveries in Norway and Brazil, accessed new attractive acreage, including the nomination for operatorship of pre-salt blocks in Angola, and received drilling permits for two exploration wells in the Gulf of Mexico. In addition, Statoil has submitted plan for development and production for two new projects in Norway and sanctioned new projects in Canada and Algeria. Total equity production was 1,971 mboe per day in the first quarter of 2011 compared to 2,102 mboe per day in the first quarter of. The production has developed in line with expectations. Statoil expects equity production in 2011 to be around the level, or slightly below. Equity production for 2012 is expected to grow with around 3% Compound Annual Growth Rate (CAGR) based on the actual equity production. Adjusted earnings in the first quarter of 2011 were NOK 47.3 billion, compared to NOK 38.9 billion in the first quarter of. Net income in the first quarter of 2011 was NOK 16.1 billion compared to NOK 11.1 billion in the same period last year. This result reflects higher prices for both liquids and gas, a gain on NOK 5.3 billion net of tax from the 40% Kai Kos Dehseh oil sands divestment, and lower net financial losses, partly offset by reduced liftings and higher taxes. The tax rate for the quarter was 68%. Adjusted earnings after tax were NOK 11.9 billion in the first quarter of Adjusted earnings after tax exclude the effect of tax on net financial items, and represent an effective adjusted tax rate of 74.8 % in the first quarter of First quarter Full year 2011 Change Net operating income (NOK billion) % Adjusted earnings (NOK billion) % Net income (NOK billion) % 37.6 Earnings per share (NOK) % Average liquids price (NOK/bbl) [3] % 462 Average gas prices (NOK/scm) % 1.72 Equity production (mboe per day) 1,971 2,102 (6 %) 1,888 Operational data First quarter Full year 2011 Change Highlights since fourth quarter : Prices: Average liquids prices are up 33% and average gas prices are up 20%, both measured in NOK. Average Total liquids equity price production (USD/bbl) has decreased by 6% from the first quarter of to 1, mboe per day in 74.0 the first quarter of % 76.5 USDNOK Total average entitlement daily exchange production rate was 1,765 mboe per day, down 8% compared to the 5.72 first quarter of (2 %) 6.05 Average On liquids 1 April price Statoil (NOK/bbl) announced [3] a significant oil discovery on the Skrugard prospect in 577 the Barents Sea % 462 Average On gas 9 April prices Statoil (NOK/scm) started oil production from the Peregrino offshore field in Brazil % 1.72 On 12 and 15 April respectively, Statoil submitted the plan for development and operation (PDO) for the Vigdis North-East development and the Refining margin (reference margin, USD/boe) [4] (33 %) 3.9 Katla fast track project in the North Sea to the Norwegian Ministry of Petroleum and Energy. On 14 April Statoil's sale of 40% of the Peregrino offshore field in Brazil to Sinochem Group was formally closed. Production: On 15 April the government announced that Statoil was awarded holdings in 11 new production licences in the Barents Sea in the 21st licensing Total entitlement round on the liquids Norwegian production continental (mboe per shelf. day)[5] 948 1,065 (11 %) 968 Total entitlement gas production (mboe per day) (4 %) 738 Total entitlement liquids and gas production (mboe per day) [6] 1,765 1,915 (8 %) 1,705 Total equity liquids production (mboe per day) 1,124 1,217 (8 %) 1,122 Total equity gas production (mboe per day) (4 %) 766 Total equity liquids and gas production (mboe per day) 1,971 2,102 (6 %) 1,888 Liftings: Total liquids liftings (mboe per day) (18 %) Statoil 1st quarter Total gas liftings (mboe per day) (4 %) 738 Total liquids and gas liftings (mboe per day) [7] 1,698 1,929 (12 %) 1,706

3 OPERATIONAL REVIEW First quarter Total liquids and gas entitlement production in the first quarter of 2011 was 1,765 mboe per day, compared to 1,915 mboe per day in the first quarter of, a decrease of 8%. Total equity production [9] was 1,971 mboe per day in the first quarter of 2011 compared to 2,102 mboe per day in the first quarter of. First quarter Full year 2011 Change The 6% decrease in total equity production was primarily caused by various operational issues both in Angola and on the Norwegian continental shelf, mainly Net operating related income to the Gullfaks (NOK billion) and Oseberg fields. Natural decline on mature fields, suspended 50.7 production in Libya 39.6 and decreased 28 gas % nominations from the Shah Deniz field in Azerbaijan also added to the reduction. Increased volumes from the Tyrihans field, and new production from the Vega, Gjøa and Morvin Adjusted earnings (NOK billion) % fields only partly compensated for the first quarter decrease in equity production. Net income (NOK billion) % 37.6 Earnings Entitlement per production, share (NOK) down 8% since first quarter last year, was impacted by the reduction 5.02 in equity production 3.49 as described above 44 % and by negative PSAeffects. The liquids average price negative (NOK/bbl) PSA-effect [3] was 206 mboe per day in the first quarter of compared to mboe per day in 33 the % first quarter last 462 year. Average Average The increase gas prices in PSA-effect (NOK/scm) was mainly a result of higher prices for liquids and gas leading 1.97 to lower entitlement 1.64 production and a 20 higher % government take 1.72 Equity because production of changes (mboe in profit per tranches day) for a number of fields this quarter, compared to the 1,971 same quarter last 2,102 year. (6 %) 1,888 Operational data First quarter Full year 2011 Change Prices: Average liquids price (USD/bbl) % 76.5 USDNOK average daily exchange rate (2 %) 6.05 Average liquids price (NOK/bbl) [3] % 462 Average gas prices (NOK/scm) % 1.72 Reference refining margin (USD/boe) [4] (33 %) 3.9 Production: Total entitlement liquids production (mboe per day)[5] 948 1,065 (11 %) 968 Total entitlement gas production (mboe per day) (4 %) 738 Total entitlement liquids and gas production (mboe per day) [6] 1,765 1,915 (8 %) 1,705 Total equity liquids production (mboe per day) 1,124 1,217 (8 %) 1,122 Total equity gas production (mboe per day) (4 %) 766 Total equity liquids and gas production (mboe per day) 1,971 2,102 (6 %) 1,888 Liftings: Total liquids liftings (mboe per day) 882 1,078 (18 %) 969 Total gas liftings (mboe per day) (4 %) 738 Total liquids and gas liftings (mboe per day) [7] 1,698 1,929 (12 %) 1,706 Production cost: Production cost entitlement volumes (NOK/boe, last 12 months) [8] % 42.8 Production cost equity volumes (NOK/boe, last 12 months) % 38.6 Equity production cost excluding restructuring and gas injection cost (NOK/boe, last 12 months) [9] % 37.9 IFRS income statement First quarter Full year (in NOK billion) 2011 Change Total liftings of liquids and gas were 1,698 mboe per day in the first quarter of 2011, a 12% decrease from 1,929 mboe per day in the first quarter of. The decrease in lifting is a result of the decrease in entitlement production and increased underlift compared to the first quarter last year. In the first quarter REVENUES of 2011 AND there OTHER was INCOME an underlift of 50 mboe per day [5], compared to an overlift of 25 mboe per day in the first quarter of. Revenues % Net Refining income margins (loss) (reference from equity margin) accounted were investments USD 2.6 per barrel in the first quarter of 2011, 0.2 compared to USD per barrel in (65 the first %) quarter of. 1.1 Other income >100% 1.8 Production cost per boe of entitlement volumes was NOK 43.7 for the 12 months ended 31 March 2011, compared to NOK 40.0 for the 12 months ended 31 March [8]. Based on equity volumes, the production cost per boe for the two periods was NOK 39.3 and NOK 36.6, respectively. Total revenues and other income % The adjusted production cost per boe of equity production for the 12 months ended 31 March 2011 was NOK 38.7 [9]. The comparable figure for the 12 OPERATING months ended EXPENSES 31 March was NOK Adjustments to production cost include restructuring costs and other costs arising from the merger recorded Purchase in the first [net quarter of inventory of 2007 variation] that were partially reversed in the fourth quarter of 2009 and 70.1, and gas injection 57.4 costs. 22 % Operating expenses and selling, general and administrative expenses (11 %) 68.6 Depreciation, amortisation and net impairment losses (1 %) 50.6 Exploration expenses % 15.8 Statoil 1st quarter Total operating expenses (100.9) (90.1) 12 % (392.4)

4 The increase in adjusted production cost per boe is mainly a result of the lower equity production and higher cost from fields preparing for production start up, such as Peregrino in Brazil. In the first quarter of 2011, a total of ten exploration wells were completed before 31 March 2011, seven on the NCS and three internationally. Three wells were announced as discoveries in the period, all on the NCS. Several wells are awaiting final evaluation. Major business developments since fourth quarter include the announcement of the significant oil discovery on the Skrugard project in the Barents Sea (1 April), the announcement of a new oil discovery in the Peregrino South structure (14 April), the submission of the Plan for Development and Operation (PDO) for the Vigdis North-East Fast track project (12 April) on the NCS, the submission of the PDO for the Katla Fast track project (15 April) on the NCS, the award of 11 new production licences in the 21st licencing round on the NCS (15 April), the start up of production from the Peregrino offshore field in Brazil (9 April), the completion of the sale of a 40% share in the Peregrino field to Sinochem Group (14 April). Statoil maintains a 60% ownership and the operatorship and will record a gain from the transaction in the second quarter 2011, the announcement of the approval of plans for the In Salah Southern field development among the partners in the In Salah gas joint venture in Algeria (27 January), the sanctioning of the Hibernia South Extension investment offshore Newfoundland and Labrador in Canada (14 February), the agreement with the Ministry of Petroleum and Energy on full scale CO2 capture at the Mongstad plant regulating the planning and development phase of the project. Statoil 1st quarter

5 Prices: Average liquids price (USD/bbl) % 76.5 USDNOK average daily exchange rate (2 %) 6.05 Average liquids price (NOK/bbl) [3] % 462 Average gas prices (NOK/scm) % 1.72 FINANCIAL REVIEW Reference refining margin (USD/boe) [4] (33 %) 3.9 Production: Total Net entitlement operating income liquids production (mboe per day)[5] Earnings per share 948 1,065 Net income (11 %) 968 Total 60entitlement gas production (mboe per day) (4 %) 738 Total entitlement liquids and gas production (mboe per day) [6] 1,765 1,915 (8 %) 1,705 NOK billion 40 NOK 4 Total equity liquids production (mboe per day) 1,124 1,217 (8 %) 1,122 Total 30equity gas production (mboe per day) (4 %) Total equity liquids and gas production (mboe per day) 1,971 2,102 (6 %) 1, NOK billion Liftings: 1 Total liquids liftings (mboe per day) 882 1,078 (18 %) Q 10 1Q 11 1Q 10 1Q 11 1Q 10 1Q 11 Total gas liftings (mboe per day) (4 %) 738 Total liquids and gas liftings (mboe per day) [7] 1,698 1,929 (12 %) 1,706 Production cost: First quarter Production cost entitlement volumes (NOK/boe, last 12 months) [8] % 42.8 Production In the first quarter cost equity of 2011, volumes net (NOK/boe, operating income last 12 months) was NOK 50.7 billion, compared to NOK billion in the 36.6 first quarter of. 7 % Revenues were 38.6 Equity considerably production impacted cost by excluding higher liquids restructuring and gas and prices, and were only partly offset by the decrease in volumes of both liquids and gas sold. Other income gas was injection NOK 5.7 cost billion (NOK/boe, in the first last quarter 12 months) 2011, [9] compared to NOK 0.5 billion in the first quarter 38.7 last year, mainly 35.8 attributable to the 8 gain % from the 40% 37.9 Kai Kos Dehseh oil sands divestment in the first quarter of IFRS income statement First quarter Full year (in NOK billion) 2011 Change REVENUES AND OTHER INCOME Revenues % Net income (loss) from equity accounted investments (65 %) 1.1 Other income >100% 1.8 Total revenues and other income % OPERATING EXPENSES Purchase [net of inventory variation] % Operating expenses and selling, general and administrative expenses (11 %) 68.6 Depreciation, amortisation and net impairment losses (1 %) 50.6 Exploration expenses % 15.8 Total operating expenses (100.9) (90.1) 12 % (392.4) Net operating income % Net financial items (0.5) (1.7) (72 %) (0.4) Income tax (34.2) (26.8) 28 % (99.2) Net income % 37.6 Purchases (net of inventory variation) represent Statoil's purchases of SDFI and 3rd party volumes and increased by 19% compared to first quarter, mainly due to higher prices of liquids measured in NOK. Operating expenses and selling, general and administrative expenses were NOK 16.2 billion, down 11% compared to first quarter last year. Net operating income includes certain items that management does not consider to be reflective of Statoil's underlying operational performance. Management adjusts for these items to arrive at adjusted earnings. Adjusted earnings is a supplemental non-gaap measure to Statoil's IFRS measure of net operating income which management believes provides an indication of Statoil's underlying operational performance in the period and facilitates a better evaluation of operational developments between periods. Statoil 1st quarter

6 In the first quarter of 2011, lower fair values of derivatives (NOK 2.6 billion) and underlift (NOK 1.7 billion) had a negative impact on net operating income while net gain on sale of assets (NOK 5.5 billion), reversals of impairments (NOK 0.9 billion), lower values of products in operational storage (NOK 0.8 billion) and change in provision (NOK 0.7 billion), had a positive impact on net operating income. Adjusted for these items and the effects of eliminations (NOK 0.1 billion), adjusted earnings were NOK 47.3 billion in the first quarter of 2011, an increase of 22% compared to last year. In the first quarter of, impairment losses net of reversals (NOK 0.1 billion) and other accruals (NOK 0.5 billion) negatively impacted net operating income, while higher fair value of derivatives (NOK 0.3 billion), overlift (NOK 0.4 billion), lower values of products in operational storage (NOK 0.5 billion), gain on sale of assets (NOK 0.3 billion) all had a positive impact on net operating income. Adjusted for these items and the effects of eliminations (NOK 0.2 billion), adjusted earnings were NOK 38.9 billion in the first quarter of. The increase in adjusted earnings from first quarter to first quarter 2011 was mainly attributable to higher prices for both liquids and gas, partly offset by lower volumes sold because of the decrease in production of both liquids and gas. Adjusted purchase (net of inventory variation) increased by 20% mainly due to higher prices of liquids. Adjusted operating expenses and selling, general and administrative expenses were NOK 17.7 billion in the first quarter of 2011, compared to NOK 17.2 billion in the first quarter last year. The 3% increase stem mainly from preparation for operation on the Peregrino field, preparation for operation on the new combined heat and power plant (CHP) at Mongstad, and new operations in connection with the marketing activity related to the oil sands activity in Canada, partly offset by reduced storage and transportation costs and decreased operating plant costs related to well maintenance. Adjusted depreciation, amortisation and net impairment losses were NOK 11.9 billion, up 7% compared to the same period last year mainly due to new fields and assets with high depreciation coming on stream and updates in removal/abandonment estimates, and were only partly offset by lower production. Adjusted exploration expenses increased by NOK 0.6 billion compared to the same period last year mainly because of higher exploration expenses from previous periods, increased field development costs, higher drilling activity and increased expenses because of dry wells. The increase was partly offset by the Canadian Kai Kos Dehseh oil sands drilling being recorded as part of net income from equity accounted investments as from the first quarter of 2011, as a result of the Statoil 40% divestment. Adjusted Adjusted earnings earnings First First quarter quarter Full Full year year (in (in NOK NOK billion) billion) Change Change Adjusted total revenues and other income % Adjusted purchase [net of inventory variation] % Adjusted operating expenses and selling, general and administrative expenses % 67.9 Adjusted depreciation, amortisation and net impairment losses % 45.8 Adjusted exploration expenses % 15.5 Adjusted earnings [11] % Financial Financial data data First First quarter quarter Full Full year year Change Change Weighted average number of ordinary shares outstanding 3,182,967,726 3,183,185,317-3,182,574,787 Earnings per share (NOK) % % Non-controlling interests (NOK billion) >100% % (0.4) Cash flows provided by operating activities (NOK billion) Gross investments (NOK billion) Net debt to capital employed ratio % % (17 %) 17 % (7 (7%) % Net foreign Net financial items amounted to a loss of NOK 0.5 billion in the first quarter of Net 2011, foreign compared to a loss of NOK 1.7 billion in the first quarter of. First First quarter quarter Interest Interest exchange exchange Interest Interest Net Net before before Estimated Estimated tax tax Net Net after after The (in NOK loss billion) in the first quarter of 2011 was primarily due to fair value income losses on interest gain/loss rate swap (in NOK billion) income gain/loss expense positions related to the expense tax interest rate management tax effect of effect tax tax external loans of NOK 1.0 billion, partly offset by foreign exchange gains of NOK 0.6 billion. Correspondingly, the loss in the first quarter of primarily related to Financial foreign items exchange according losses to of NOK 2.5 billion, partly offset IFRS by fair value gains 1.4 on interest rate 0.6 swap positions (2.5) related to the interest (0.5) rate (0.5) (1.0) management of external loans of NOK 1.0 billion. Foreign exchange (FX) impacts (incl. derivatives) (0.6) (0.6) The interest expense in the first quarter of 2011 was a loss of NOK 2.5 billion, correspondingly the loss in the first (1.2) quarter was NOK 0 billion. Interest rate (IR) derivatives The fair value (losses) on interest rate swap positions were caused by increasing USD interest rates during the first quarter of 2011, fair value gains on Subtotal interest rate swap positions during the first quarter of were (0.6) caused by decreasing (0.6) USD interest 0.9 rates. (0.3) 0.2 (0.1) Statoil 1st quarter Financial items excluding FX and IR derivatives (1.6) (0.8) (0.3) (1.1)

7 Financial data First quarter Full year 2011 Change Adjusted earnings First quarter Full year Financial data First quarter Full year (in NOK billion) 2011 Change 2011 Change Weighted average number of ordinary shares outstanding 3,182,967,726 3,183,185,317-3,182,574,787 Weighted Adjusted Earnings per total average share revenues (NOK) number and of other ordinary income shares outstanding 3,182,967, ,183,185, % %- 3,182,574, Non-controlling Earnings per share interests (NOK) (NOK billion) >100 44% % (0.4) Cash Adjusted Non-controlling flows purchase provided interests [net by operating of (NOK inventory billion) activities variation] (NOK billion) >100% (17 20% %) (0.4) Gross Cash Adjusted flows investments operating for provided these (NOK factors, expenses by operating billion) net and financial activities selling, items general (NOK excluding and billion) administrative foreign exchange expenses effects and interest rate derivatives, was a loss of approximately 173% NOK billion Net for Gross Adjusted the debt investments period. to depreciation, capital In the (NOK employed first amortisation billion) quarter ratio of, and impairment net financial items excluding foreign exchange and % interest rate 25.7 derivatives 11.1 % before tax (7 amounted 7% %) to a loss of % NOK Net Adjusted debt 0.2 to billion. exploration capital employed expenses ratio % % 19% (7%) % Adjusted earnings [11] Net foreign % Financial items in first quarter 2011 Interest exchange Interest Net before Estimated tax Net after (in NOK billion) income Net gain/loss foreign expense tax effect tax First quarter 2011 Interest exchange Interest Net before Estimated tax Net after (in NOK billion) income gain/loss expense tax effect tax Financial items according to IFRS (2.5) (0.5) (0.5) (1.0) Financial data First quarter Full year Financial items according to IFRS (2.5) (0.5) Change (0.5) (1.0) Foreign exchange (FX) impacts (incl. derivatives) (0.6) (0.6) (1.2) Interest Foreign rate (IR) derivatives Weighted exchange average (FX) number impacts of ordinary (incl. derivatives) shares outstanding (0.6) 3,182,967,726 (0.6) ,183,185,317 (1.2) - 3,182,574,787 Interest Earnings rate per share (IR) derivatives (NOK) % Subtotal Non-controlling interests (NOK billion) (0.6) (0.6) (0.3) >100% (0.1) (0.4) Subtotal Cash flows provided by operating activities (NOK billion) (0.6) (0.6) 0.9 (0.3) #DIV/0! 0.2 (0.1) Financial items excluding FX and IR derivatives Gross investments (NOK billion) (1.6) (0.8) (0.3) #DIV/0! (1.1) Financial Net debt items to capital excluding employed FX and ratio IR derivatives % (1.6) 25.7 % (0.8) (7%)(0.3) 24.6 (1.1) % Exchange rates 31 March December 31 March Exchange First quarter rates 2011 Interest Net foreign Interest 31 March 2011 Net before 31 December Estimated tax 31 March Net after USDNOK (in billion) income exchange expense 5.51 tax 5.86 effect 5.98 tax EURNOK USDNOK EURNOK Financial items according to IFRS (2.5) 7.83 (0.5) 7.81 (0.5) 8.03 (1.0) Foreign Composition exchange of tax expense (FX) and impacts effective (incl. tax rate derivatives) in the first quarter of 2011 (0.6) (0.6) Before tax Tax (1.2) Tax rate After tax Interest rate (IR) derivatives Composition Income tax of was tax expense NOK 34.2 and effective billion tax in rate the in first the first quarter of of 2011, equivalent to an effective Before tax tax rate of 68.0%, compared Tax to NOK 26.8 Tax rate billion in the first After tax quarter Adjusted of earnings, equivalent to an effective tax rate of 70.6%. The variance in effective tax 47.3 rates between the (35.4) periods is mainly 75 explained % by capital 11.9 gain Subtotal Adjustments and Adjusted the reversal earnings of cost accruals for onerous contracts in the first (0.6) quarter of 2011 with (0.6) lower 47.3 (3.4) than 0.9 average tax (35.4) (1.7) rates. (0.3) The decreased (49 75 %) % effective 0.2 tax rate 11.9 (0.1) (5.1) in the Net Adjustments first operating quarter of income 2011 was also caused by higher deferred tax income in the first quarter of 50.7 (3.4) 2011 compared to (33.7) (1.7) the first quarter of (49 66 %%) related to currency 17.0 (5.1) Financial effects in companies that are taxable in other currencies than the functional currency. This was partly offset by operating losses in entities which are subject Net operating items income excluding FX and IR derivatives (1.6) (33.7) (0.8) 66 % (0.3) 17.0 (1.1) Financial to lower than items average tax rate and relatively higher income from the NCS which is subject (0.5) to higher than average (0.5) tax rates. >(100%) (1.0) Financial In the first items quarter of 2011, income before tax amounted to NOK 50.2 billion, while taxable (0.5) income was estimated (0.5) to be NOK >(100%) 3.8 billion higher. The (1.0) Total Exchange rates March (34.2) december 68 % 31 March 16.1 estimated difference of NOK 3.8 billion arose in companies that are taxable in other currencies than the functional currency. The tax effect of this estimated Total difference contributed to a tax rate of 68.1%. Management provides an alternative tax measure 50.3 that excludes (34.2) items not directly 68 related % to underlying 16.1 operational USDNOK performance. Adjusted earnings after tax, which exclude net financial items and tax on net financial 5.51 items, is an alternative 5.86 measure which 5.98 EURNOK provides an indication of Statoil's tax exposure to its underlying operational performance in the period, and management 7.83 believes 7.81 that this measure better 8.03 facilitates a comparison between periods. Composition of tax expense and effective tax rate in the first quarter of 2011 Before tax Tax Tax rate After tax Adjusted earnings 47.3 (35.4) 75 % 11.9 Adjustments (3.4) (1.7) (49 %) (5.1) Net operating income 50.7 (33.7) 66 % 17.0 Financial items (0.5) (0.5) >(100%) (1.0) Total 50.3 (34.2) 68 % 16.1 Adjusted earnings after tax in the first quarter of 2011 were NOK 11.9 billion, down from NOK 12.1 billion in the first quarter of. The tax rate on adjusted earnings was 74.8% and 68.8% in the first quarter of 2011 and, respectively. The variance in tax rate on adjusted earnings between the periods is mainly explained by relatively higher adjusted earnings from the NCS in the first quarter of 2011 compared with the first quarter of. Income from the NCS is subject to a marginal tax rate of 78%. The increased tax rate on adjusted earnings in the first quarter of 2011 was also caused by increased tax rate on adjusted earnings from International D&P, due to relatively higher adjusted earnings from high tax regimes and exploration costs with lower than average tax rate. Statoil 1st quarter

8 Adjusted earnings by segment are stated in the table below. The composition of Statoil's reportable segments was changed on the basis of the new corporate structure implemented with effect from 1 January 2011, see note 2 to the Interim Financial Statements. Adjusted earnings after tax by segment First quarter 2011 Tax on Adjusted Tax on Adjusted Adjusted adjusted earnings Adjusted adjusted earnings (in NOK billion) earnings earnings after-tax earnings earnings after-tax D&P Norway D&P International Marketing, Processing & Renewable energy Fuel & Retail Other (0.4) (0.2) (0.1) (0.2) (0.3) 0.1 Adjusted earnings [11] In the first quarter of 2011, net income was NOK 16.1 billion compared to NOK 11.1 billion last year. The 44% increase stems primarily from the increase in operating income caused by higher prices for both liquids and gas, gain on sale of assets, lower losses on net financial First items. quarter The increase was partly Year offset HSE by lower volumes of liquids and gas sold, higher prices for volumes purchased, increased exploration expenses 2011 and higher income taxes. In Total the recordable first quarter injury of 2011, frequency earnings per share was NOK 5.02 compared to NOK 3.49 in the first quarter of Serious incident frequency Accidental Cash flows oil provided spills (number) by operations amounted to NOK 20.4 billion in the first quarter of 2011, while cash flows from 71 underlying operations 79 were 374 NOK 56.7 billion. Cash flows used in investing activities in the first quarter of 2011 were NOK 8.7 billion. Accidental oil spills (volume, cubic metres) Statoil 1st quarter

9 OUTLOOK Statoil expects equity production in 2011 to be around the level, or slightly below. Equity production for 2012 is expected to grow with around 3% Compound Annual Growth Rate (CAGR) based on the actual equity production [13]. Commercial considerations related to gas sales activities, operational regularity, the timing of new capacity coming on stream and gas off take represent the most significant risks related to the production guidance. Planned turnarounds are expected to have a large impact during the second quarter of 2011 resulting in lower production of around 100 mboe per day in the quarter, of which approximatley 70% are liquids. In total the turnarounds are estimated to have a negative impact on the equity production of around 50 mboe per day for the full year 2011, of which most are liquids. Organic capital expenditures for 2011 i.e. excluding acquisitions and capital leases, are estimated at around USD 16 billion. Statoil has an ambition for the unit of production cost to be in the top quartile in the peer group. The Company will continue to mature its large portfolio of exploration assets and expects to complete around 40 wells with a total exploration activity level in 2011 of around USD 3 billion, excluding signature bonuses. These forward-looking statements reflect current views about future events and are, by their nature, subject to significant risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. See "Forward-Looking Statements" below. Statoil 1st quarter

10 RISK UPDATE INDICATIVE EFFECTS ON 2011 RESULTS (NOK billion) The sensitivity analysis shows the estimated 12 months effect of changes in parameters. The changes in parameters do not have the same probability. Oil price: + USD 10/bbl Gas price: + NOK 0.50/scm Exchange rate: USDNOK (P&L effect excl finance) Net income effect Net operating income effect before tax Risk factors The results of operations largely depend on a number of factors, most significantly those that affect the price obtained in NOK for products sold. Specifically, such factors include the level of liquids and natural gas prices, trends in the exchange rates, liquids and natural gas production volumes, which in turn depend on entitlement volumes under profit sharing agreements and available petroleum reserves, Statoil's, as well as our partners' expertise and co-operation in recovering oil and natural gas from those reserves, and changes in Statoil's portfolio of assets due to acquisitions and disposals. The illustration shows how certain changes in crude oil prices (a substitute for liquids prices), natural gas contract prices and the USDNOK exchange rate, if sustained for a full year, could impact our net operating income. Changes in commodity prices, currency and interest rates may result in income or expense for the period as well as changes in the fair value of derivatives in the balance sheet. The illustration is not intended to be exhaustive with respect to risks that have or may have a material impact on the cash flows and results of operation. See the annual report for and the Annual Report on Form 20-F for a more detailed discussion of the risks to which Statoil is exposed. Financial risk management Statoil has policies in place to manage risk for commercial and financial counterparties by the use of derivatives and market activities in general. The group's exposure towards financial counterparties is considered to have an acceptable risk profile. The markets for short- and long-term financing are currently considered to function comfortably for borrowers with Statoil's credit standing and general characteristics. With regard to liquidity management, the focus is on finding the right balance between risk and reward and most funds are currently placed in short-term certificates with minimum single A-rating, or with banks with minimum single A-rating. In accordance with our internal credit rating policy, we assess counterparty credit risk annually and assess counterparties identified as high risk more frequently. The internal credit ratings reflect our assessment of the counterparties' credit risk. Statoil 1st quarter

11 Adjusted earnings after tax by segment First quarter 2009 Tax on Adjusted Tax on Adjusted Adjusted adjusted earnings Adjusted adjusted earnings (in NOK billion) earnings earnings after-tax earnings earnings after-tax HEALTH, SAFETY AND THE ENVIRONMENT (HSE) E&P Norway International E&P First quarter Natural Gas Manufacturing & Marketing The total recordable injury frequency was 4.9 in the first quarter of 2011 compared to 4.5 in the first quarter of. The serious incident frequency was Other (0.2) (0.3) 0.1 (0.6) (1.0) in the first quarter of 2011, the same as in first quarter of. Total number of serious incidents was 40 in the first quarter, 10 of these happened in Statoil Fuel and Retail. There were no fatal accidents in the first quarter of Group The volume of oil spills increased from 6 cubic metres in the first quarter of to 12 cubic metres in the first quarter of The number of oil spills decreased from 79 spills in the first quarter of to 71 in the first quarter of First quarter Year HSE 2011 Total recordable injury frequency Serious incident frequency Accidental oil spills (number) Accidental oil spills (volume, cubic metres) Statoil 1st quarter

12 DEVELOPMENT AND PRODUCTION NORWAY DEVELOPMENT AND PRODUCTION NORWAY IFRS income statement First quarter Full year DEVELOPMENT (in NOK billion) AND PRODUCTION NORWAY 2011 Change IFRS income statement First quarter Full year (in NOK billion) 2011 Change Total revenues and other income % Total revenues and other income Operating expenses and selling, general and administrative expenses % (14 %) Depreciation, amortisation and net impairment losses % 26.0 Operating expenses and selling, general and administrative expenses (14 %) 23.6 Exploration expenses % 5.5 Depreciation, amortisation and net impairment losses % 26.0 Exploration expenses Total operating expenses % 2 % Total operating expenses Net operating income % 35 % Net operating income % Adjusted earnings [11] First quarter Full year (in NOK billion) 2011 Change Adjusted earnings [11] First quarter Full year (in NOK billion) 2011 Change Adjusted Total revenues and other income % Adjusted Total revenues and other income % Adjusted operating expenses and selling, general and administrative expenses (3 %) 23.8 Adjusted depreciation, amortisation and net impairment losses % 26.0 Adjusted operating expenses and selling, general and administrative expenses (3 %) 23.8 Adjusted Exploration expenses Adjusted depreciation, amortisation and net impairment losses % 26.0 Adjusted Exploration expenses % 5.5 Adjusted earnings [11] % Adjusted earnings [11] % First quarter Full year Operational data 2011 Change First quarter Full year Operational data 2011 Change Prices: Liquids price (USD/bbl) % 76.3 Prices: Liquids price (NOK/bbl) Liquids price (USD/bbl) % 76.3 Transfer price natural gas (NOK/scm) Liquids price (NOK/bbl) % Transfer price natural gas (NOK/scm) % 1.27 Liftings: Liquids (mboe per day) Liftings: (13 %) 711 Natural gas (mboe per day) Liquids (mboe per day) (4 %) (13 %) Total liquids and gas liftings (mboe per day) Natural gas (mboe per day) 1, , (9 %) (4 %) 1, Total liquids and gas liftings (mboe per day) 1,409 1,541 (9 %) 1,380 Production: Entitlement liquids (mboe per day) Production: (9 %) 704 Entitlement natural gas (mboe per day) Entitlement liquids (mboe per day) (4 %) (9 %) Total entitlement liquids and gas production (mboe per day) Entitlement natural gas (mboe per day) 1, , (7 %) (4 %) 1, Total entitlement liquids and gas production (mboe per day) 1,444 1,546 (7 %) 1,374 First quarter Revenues were positively impacted by a 33% increase in liquids prices measured in NOK. Production decreased by 7% compared to the first quarter of. High project activity with three sanctioned projects in the period. Seven exploration wells completed in the period, three new discoveries. Statoil 1st quarter

13 OPERATIONAL REVIEW Average daily production of liquids decreased from 777 mboe per day in the first quarter of to 705 mboe per day in the first quarter of The decrease in production is mainly related to Oseberg and Kristin, and due to reduced water injection at Gullfaks. This is partly offset by new production at Vega, Gjøa, Morvin and increased production at Tyrihans. In addition, expected reductions due to natural decline on mature fields contributed to the decrease. Average daily production of gas decreased from 769 mboe per day in the first quarter of to 739 mboe per day in the first quarter of The decrease was mainly related to gas production at Oseberg moved to end of the year, a 13 day unplanned shut-down at Snøhvit, CO2 restrictions at Kårstø and a gas leakage in a compressor at Oseberg. This is partly offset by new production from Vega and Gjøa, new producing wells at Njord, redelivery of gas from Gullfaks to Tordis and operational challenges at Ormen Lange in. Average daily lifting of liquids decreased from 772 mboe per day in the first quarter of to 670 mboe per day in the first quarter of Exploration expenditure (including capitalised exploration expenditure) increased by NOK 0.7 billion from NOK 1.1 billion in the first quarter of to NOK 1.8 billion in the first quarter of This was mainly due to increased number of wells being drilled in the first quarter of 2011 compared to the same period last year. In the first quarter of 2011, seven wells were completed and three wells were announced as discoveries. FINANCIAL REVIEW In the first quarter of 2011, net operating income for Development and Production Norway was NOK 38.6 billion compared to NOK 28.6 billion in the first quarter of. The increase is mainly attributable to increased oil and gas prices, partly offset by decreased oil and gas lifting as well as a lower USD/NOK exchange rate. In the first quarter of 2011, an unrealised gain on derivatives (NOK 0.3 billion) had a positive impact on net operating income, while underlift (NOK 1.0 billion) and a change in future settlement related to a sale of a licence share (NOK 0.1 billion) had a negative impact on net operating income. In the first quarter of, underlift (NOK 0.3 billion) and unrealised loss on derivatives (NOK 0.2 billion) had a negative impact on net operating income. Adjusted for these items, adjusted earnings were NOK 39.4 billion in the first quarter of 2011, compared to NOK 29.1 billion in the same period last year. The increase was mainly due to higher realised prices of liquids and natural gas measured in NOK, which positively impacted adjusted earnings by NOK 14.1 billion. This was partly offset by decreased production of oil and natural gas that impacted adjusted earnings negatively by NOK 3.3 billion. Adjusted depreciation, amortisation and net impairment losses increased by NOK 1.0 billion compared to same the period last year, mainly due to new fields with high depreciation and updated removal/abandonment estimates, partly offset by the impact of lower production. Adjusted operating expenses and selling, general and administrative expenses decreased by NOK 0.2 billion compared to the same period last year, mainly due to reduced costs for well maintenance and the purchase of gas for re-injection on Grane. Adjusted exploration expenses have increased by NOK 0.2 billion in the first quarter of 2011 compared to the same period last year. The increase is mainly related to a higher number of wells being drilled, partly offset by higher capitalised exploration cost. In addition, expensed exploration costs from previous periods have decreased, mainly caused by the Caurus well being expensed in the first quarter of. Important events since last quarter: Vigdis NE and Katla fast track projects were sanctioned, the plans for development and operation (PDO) were submitted to the Norwegian Ministry of Petroleum and Energy in April. The Ormen Lange mid North project was sanctioned. On 1 April Statoil announced a significant oil discovery on the Skrugard prospect in the Barents Sea. Holdings in 11 new production licences have been awarded to Statoil in the 21st licensing round on the Norwegian continental shelf, of which eight are operatorships Heidrun redetermination leads to increased ownership for Statoil of 0.87%. Statoil 1st quarter

14 DEVELOPMENT AND PRODUCTION INTERNATIONAL DEVELOPMENT AND PRODUCTION INTERNATIONAL DEVELOPMENT AND PRODUCTION INTERNATIONAL IFRS income statement First quarter Full year IFRS (in NOK income billion) statement 2011 First quarter Change Full year (in NOK billion) 2011 Change Total revenues and other income Total revenues and other income % Operating expenses and selling, general and administrative expenses (15 %) 11.4 Operating expenses and selling, general and administrative expenses (4 %) 11.4 Depreciation, amortisation and net impairment losses (8 %) 16.7 Depreciation, amortisation and net impairment losses (9 %) 16.7 Exploration expenses Exploration expenses % 10.3 Total operating expenses Total operating expenses (8 %) (5 %) Net operating income Net operating income >100 >100 % Adjusted earnings [11] First quarter Full year Adjusted (in NOK billion) earnings [11] 2011 First quarter Change Full year (in NOK billion) 2011 Change Adjusted Total revenues and other income Adjusted Total revenues and other income % Adjusted operating expenses and selling, general and administrative expenses Adjusted operating expenses and selling, general and administrative expenses % 11.1 Adjusted depreciation, amortisation and net impairment losses (8 %) 14.9 Adjusted Depreciation, amortisation and impairment (8 %) 14.9 Adjusted exploration expenses Adjusted Exploration expenses % 10.1 Adjusted earnings [11] Adjusted earnings [11] % First quarter Full year Operational data 2011 First quarter Change Full year Operational data 2011 Change Prices: Prices: Liquids price (USD/bbl) Liquids price (USD/bbl) % 76.8 Liquids price (NOK/bbl) Liquids price (NOK/bbl) % Liftings: Liftings: Liquids (mboe per day) (31 %) 258 Liquids (mboe per day) (31 %) 258 Natural gas (mboe per day) (5 %) 68 Natural gas (mboe per day) (5 %) 68 Total liquids and gas liftings (mboe per day) (25 %) 327 Total liquids and gas liftings (mboe per day) (25 %) 327 Production: Production: Entitlement liquids (mboe per day)[6] (16 %) 263 Entitlement liquids (mboe per day)[6] (16 %) 263 Entitlement natural gas (mboe per day) (5 %) 68 Entitlement natural gas (mboe per day) (5 %) 68 Total entitlement liquids and gas production (mboe per day) (13 %) 332 Total entitlement liquids and gas production (mboe per day) (13 %) 332 Total equity gas production (mboe per day) (7 %) 97 Total equity gas production (mboe per day) (7 %) 97 Total equity liquids production (mboe per day) (5 %) 417 Total equity liquids production (mboe per day) (5 %) 417 Total equity liquids and gas production (mboe per day) (5 %) 514 Total equity liquids and gas production (mboe per day) (5 %) 514 First quarter Revenues were positively impacted by a 33% increase in liquids prices measured in NOK. Equity production decreased by 5% compared to the first quarter of. Entitlement production decreased by 13% compared to the first quarter last year. The Kai Kos Dehseh oil sand sale in Canada was completed. A gain of NOK 5.6 billion before tax on the sale of the divested 40% interest is reflected in the period and the remaining ownership interest of 60% is accounted for as a jointly controlled entity under the equity method. Average daily entitlement production of liquids and gas was 321 mboe per day in the first quarter of 2011, compared to 370 mboe per day in the first quarter of. Statoil 1st quarter

15 The decrease in entitlement production was due to lower equity production in the first quarter of 2011 and a higher negative effect from Production Sharing Agreements (PSA). The PSA effect on entitlement production was 206 mboe per day in the first quarter of 2011, compared to 187 mboe in the first quarter of. The increase in PSA effect was due to lower cost oil due to higher prices and changes in profit tranches on some fields in. Average daily equity production of liquids decreased from 441 mboe per day in the first quarter of to 419 mboe per day in the first quarter of The decrease in liquids production was mainly due to decline and operational issues in Angola, lower nominations from Shah Deniz in Azerbaijan, decreased production from Terra Nova in Canada, and suspended production in Libya. The decrease was partly offset by increased production from Agbami due to increased ownership share in the first quarter of 2011 compared to the first quarter of. Average daily equity production of gas decreased from 116 mboe per day in the first quarter of to 108 mboe per day in the first quarter of The decrease was mainly due to lower nominations from Shah Deniz in Azerbaijan, and lower production from the Independence Hub fields (Q Gas, San Jacinto and Spiderman). The decrease was partly offset by increased production from Marcellus with increased number of wells online. Average daily lifting of liquids and gas decreased from 387 mboe per day in the first quarter of to 289 mboe per day in the first quarter of Exploration expenditure (including capitalised exploration expenditure) amounted to NOK 2.5 billion both in the first quarter of 2011 and in the first quarter of. In the first quarter of 2011 there was an increase in exploration expenditures mainly due to higher activity compared to the first quarter of, and more expensive wells with higher Statoil share in the first quarter of 2011 compared to the same period last year. The increase was completely offset by lower drilling activity in the Gulf of Mexico, and by drilling related to the Canadian Kai Kos Dehseh oil sands being accounted for as a jointly controlled entity under the equity method in the first quarter of In the first quarter of 2011, three wells were completed. No wells were announced as discoveries. In the first quarter of, six exploration and appraisal wells were completed and one well was announced as discovery. In the US Gulf of Mexico, Statoil has over the past months worked to comply with the new requirements. Statoil has received two deep water drilling permits after the suspension of drilling following the Macondo incident. Statoil received permits to drill the Cobra and Logan prospects in the deep water Gulf of Mexico. Drilling is expected to start during the second quarter of FINANCIAL REVIEW In the first quarter of 2011, net operating income for Development and Production International was NOK 10.0 billion compared to NOK 4.9 billion in the same period last year. Net operating income in the first quarter of 2011 was negatively impacted by an underlift of NOK 0.7 billion and unrealised loss on derivatives of NOK 0.1 billion. A gain on sale of assets of NOK 5.6 billion had a positive effect on net operating income. In the first quarter of, an overlift of NOK 0.7 billion positively impacted net operating income, while impairment losses of NOK 0.3 billion negatively impacted net operating income. Adjusted for these items, adjusted earnings in the first quarter of 2011 and were NOK 5.2 billion and NOK 4.5 billion, respectively. Increased realised liquids and gas prices measured in NOK impacted adjusted earnings positively by NOK 2.9 billion. This effect was partly offset by reduced entitlement production, which impacted adjusted earnings negatively by NOK 1.8 billion, and increased exploration costs of NOK 0.4 billion. Adjusted operating expenses and selling, general and administrative expenses increased by 6% from the first quarter of to the first quarter of The increase was mainly due to preparation for operations on the Peregrino offshore field in Brazil. Adjusted depreciation, amortisation and net impairment losses were NOK 3.5 billion in the first quarter of 2011, compared to NOK 3.8 billion in the first quarter of. The decrease was mainly due to lower production and an increase in reserves. Adjusted exploration expenses were NOK 2.2 billion in the first quarter of 2011, compared to NOK 1.8 billion in the first quarter of. The increase of NOK 0.4 billion was mainly related to an increase in expensed exploration from previous periods, and increased field development costs. These effects were partly offset by reduced exploration expenses due to the Canadian oil sands drilling being accounted for as a jointly controlled entity under the equity method in the first quarter of Important events since last quarter On 27 January Statoil announced that the partners in In Salah gas joint venture in Algeria have approved the plans for the In Salah Southern Fields development. On 28 March Statoil became the partner in the Marine Well Containment Company (MWCC), an organisation committed to improving capabilities for containing a potential future underwater well control incident in the US Gulf of Mexico. On 9 April the Statoil operated Peregrino offshore field in Brazil started production. On 14 April Statoil's sale of 40% of the Peregrino offshore field in Brazil to Sinochem Group was formally closed. On 14 April Statoil announced a new oil discovery in the Peregrino South structure. Statoil 1st quarter