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Time for ownership review

January 22, 1999, 07:00 CET

The time is ripe for a review of Statoil's ownership structure, according to the group's directors and top management.

They also believe that a fresh look should be taken at the role of the Norwegian state as a direct financial player in the country's offshore sector.

Since Norway became part of the European Economic Area (EEA), which links the country with the European Union, the government can no longer use Statoil as an oil policy instrument.

Making this point, Statoil chief executive Harald Norvik notes that the group today competes with other companies on equal terms.

"We must ensure that we preserve the broad political agreement on the main lines of Norwegian oil policy which has been maintained since this business began."

He emphasises that the debate which is now required must focus on creating win-win solutions which benefit both Statoil and the government as owner.

"Our ambition must be that after another 25 years we can look back and say we laid the basis for a structure which has proved just as successful as the one we've had so far.

"Given the tougher international competition we now face, our long-term ambition must be to ensure that we continue to have companies with their head offices in Norway."

The new and sharper competition, which is having just as big an impact off Norway as in the rest of the world, underlies the need for a review of the government's role.

"With an element of private capital, we'll still retain strong national ownership," Mr Norvik notes. "Ensuring that Statoil has more or less the same financial and market-related freedom of action as our competitors at home and abroad will be more important.

"And the government must be provided with a cost-effective solution for managing and developing the state's direct financial interest (SDFI) in the Norwegian oil industry."

Statoil was established in 1972 through unanimous agreement in the Storting (parliament). That was followed in 1984 with a Storting vote to establish the SDFI by transferring substantial assets from Statoil to the state's direct ownership.

The SDFI currently ranks as the largest player in the Norwegian offshore sector, with Statoil as its commercial manager.

"We need broad political agreement on a new structure, just as we achieved in 1972 and 1984," says Mr Norvik.

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