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SDFI will strengthen Statoil

December 14, 2000, 00:00 CET

Statoil will be strengthened as a result of plans announced today by the Norwegian government for redistributing the state's direct financial interest (SDFI) in petroleum operations, says chief executive Olav Fjell.

Production from the group is also due to be boosted sharply by the proposals, which will give it access to 15 per cent of the SDFI portfolio.

"This means that we'll have a daily output of one million barrels of oil equivalent within a couple of years," Mr Fjell notes. "Without the SDFI transfer, it would have been 700,000 barrels."

He is disappointed that the government's plans fail to live fully up to the call from Statoil's board for an extensive restructuring of the SDFI.

But he nevertheless emphasises that the Labour administration has gone some way towards accepting Statoil's proposal to use SDFI holdings industrially in order to boost value creation and develop the group's gas position.

Mr Fjell adds that the government proposals lay the basis for continuing work on a number of the value creation opportunities identified by Statoil off Norway.

These apply particularly to the Tampen area of the Norwegian North Sea, which embraces Statoil's major Statfjord and Gullfaks fields.

Securing an overall 25 per cent of the SDFI would have provided substantial value creation opportunities and a simpler residual SDFI portfolio.

The government has also proposed the creation of an independent company for transporting Norwegian natural gas, which means that Statoil will lose important responsibilities for gas transport.

Mr Fjell is disappointed over the proposal and believes it will lead to an unnecessary weakening.

"In our view, the government goes further than necessary to satisfy the European Union's requirements on neutrality for gas transport," he says.

However, the chief executive is very satisfied with the proposal to float Statoil on the stock market.

"That will give us greater strength and freedom of action," he says.

The timing of a Statoil flotation is up to the government, but the group will be ready for this process by the early summer of next year, Mr Fjell promises.

"I'm pleased the government has now presented this Bill to the Storting (parliament)," he adds. "The Storting can thereby take a decision next spring, which will be very important for the country and for Statoil."