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Strategic sale of Norwegian offshore holdings

October 24, 2000, 01:00 CEST

Interests with a total value of NOK 2.1 billion are being sold by Statoil in four fields and two exploration licences on the Norwegian continental shelf (NCS).

These sales form part of the group's strategy of developing its core areas on the NCS, and also help to meet its target of cutting capital employed by 20-25 per cent before the end of 2001.

In addition, Gaz de France will become a strategic partner in Statoil's Snøhvit gas project in the Tromsø Patch area of the Barents Sea.

"We are selling out these holdings in order to concentrate resources on our most important areas of the NCS," explains executive vice president Henrik Carlsen in Statoil.

"Combined with earlier measures to restructure the portfolio, this will strengthen our involvement in Norway's offshore sector and our value creation there.

"We are very satisfied with the sales, which improve the position of our partners on the NCS as well as enhancing our financial status. They represent an important step forward in the direction we have chosen."

The sales comprises cash payments of NOK 1.7 billion. Statoil is also retaining future tax allowances worth NOK 400 million, bringing the total value to NOK 2.1 billion.

This operation brings the total disinvestment by Statoil since the policy was adopted in 1999 to roughly NOK 15 billion, and ties in with earlier moves to restructure its portfolio.

These include the acquisition of Saga Petroleum together with Norsk Hydro and the relinquishment of 18 licences last year, and a major swap transaction covering UK and Norwegian interests in 1998.

Statoil is freeing up capital and management resources with the latest disposals, allowing it to concentrate attention on its core areas.

This strategy has been adopted to improve operational efficiency and to lay the basis for optimum value creation on the NCS.

Statoil increased its holdings on the Tromsø Patch from 29 to 35 per cent in 1999, and took over the operatorship for all the Snøhvit licences.

One reason for doing this was to open the way to using part of the group's holding to bring in a strategic partner in Snøhvit. Twelve per cent of this field has now been sold to Gaz de France, which is expected to strengthen the marketing side of the project with its liquefied natural gas expertise.

The French company is also acquiring Statoil's 20 per cent interest in the Njord field further south. These two transactions make Gaz de France a new player on the NCS.

Other sales include Statoil's 6.4 per cent holding in Grane to Conoco and its two per cent interest in Jotun to Det Norske Oljeselskap (DNO).

Phillips Petroleum is also taking over Statoil's interests in Tommeliten, with the operatorship, and the Dansk Olie og Naturgas (Dong) will acquire the group's share of the Freja licence.

All these agreements come into effect on 1 January 2001, subject to the approval of the Norwegian authorities.

Further information: public affairs manager Kristofer Hetland, tel. +47 51 99 47 00.

Fact sheet
Strategic sale of holdings on the NCS

Field Holding Buyer
Grane 6.4% Norske Conoco
Jotun 2.0% Det Norske Oljeselskap
Njord 20.0% Gaz de France International
Snøhvit 12.0% Gaz de France International
Tommeliten
(non-commercial and commercial parts)
41.88% + operatorship
28.26%
Phillips Petroleum Co
Freja 20.0% Dansk Olie og Naturgas
Field Block Today's partners/holdings
Grane 25/8, 11 Norsk Hydro* 24.4%
SDFI** 43.6%
Esso/Mobil 25.6%
Statoil 6.4%
Jotun 25/7 Esso/Mobil* 45.00%
Enterprise 45.00%
Statoil 2.00%, SDFI** 3.00%
Norske Conoco 3.75%
Amerada Hess 1.25%
Njord 6407/7, 10 Norsk Hydro* 22.5%
SDFI** 30.0%
Statoil 20.0%
Esso/Mobil 20.0%
Petro-Canada 7.5%
Snøhvit 7120, 7121 Statoil* 34.29%
SDFI** 30.00%
TotalFinaElf 18.40%
Norsk Hydro 10.00%
Amerada Hess 3.26%
RWE-DEA 2.81%
Svenska Petroleum 1.24%
Tommeliten
Non-commercial
1/9 Statoil* 41/88%
TotalFinaElf 15.00%
Agip 13.12%
SDFI** 30.00 %
Tommeliten
Commercial
1/9 Statoil* 28.26%
TotalFinaElf 20.23%
Agip 9.13%
SDFI** 42.38%
Freja 2/12 Amerada Hess* 50%
SDFI** 30%
Statoil 20%

* Operator
** State's direct financial interest in Norwegian petroleum operations