Accord with Hydro on key issues

September 1, 1999, 18:00 CEST

The views expressed by Norsk Hydro on the government's petroleum activities accord with those of Statoil in a number of key areas, says Statoil chairman Ole Lund.

"That we are now getting an open and unprejudiced debate on the Norwegian's state's commercial involvement in the petroleum sector has a value in itself," comments Mr Lund.

"Both groups agree that the state's direct financial interest (SDFI) in this industry no longer serves its purpose and that the government should therefore consider ending it. The state would be better served by commercialising these resources.

"The fact that Hydro and we do not agree on how quickly this should happen and on how the two groups should be involved is not surprising. It must be legitimate for Hydro to protect its own interests in such an issue."

"It's important to remember that this debate has been prompted by extensive changes in markets and competitive terms and in developments on the Norwegian continental shelf. I find that Hydro and we share the same view of these general trends."

Mr Lund also emphasises the importance of protecting established market positions for Norwegian oil and gas.

"Market trends make it very important that we continue to build on the strengths achieved. We mustn't put ourselves in a position which undermines established positions. The European gas market is very important for Norway."

In his view, these most focal considerations are not given sufficient emphasis in the letter submitted by Hydro to the Norwegian government.

He adds that the key objective for the Statoil board is to safeguard the value of the state's positions and ownership interests.

"In our own report, we have explained how we believe that the government as owner can increase the value of its holdings while laying the basis for a strong Norwegian-based player in the oil and gas industry."

Mr Lund points to the importance of strengthening the competitiveness of Norway's offshore sector and of limiting conflicts of goals and roles for the government in the petroleum sector.

"Our recommendation to merge Statoil and the SDFI, followed by a partial privatisation of the group, will not escalate the level of risk for the state. On the contrary, it would reduce its direct risks by reallocating its assets to areas other than oil and gas.