Record result for 2005 – well placed for further growth

February 13, 2006, 08:35 CET

“Statoil had a net income of NOK 30.7 billion in 2005,” reports chief executive Helge Lund. “That is 23 per cent higher than in 2004 and our best annual result ever.”

The group produced an average 1,169,000 barrels of oil equivalent per day last year, an increase of six per cent compared with 2004. The target of an average daily oil and gas output of 1.4 million barrels in 2007 stands firm.

Output on the Norwegian continental shelf (NCS) declined by one per cent in 2005 compared with 2004, while international production rose by all of 60 per cent.

“The good result is influenced by high oil and gas prices and growing production, as well as good margins and high regularity at the refineries,” says Mr Lund.

“At the same time we have experienced a high rate of activity in exploration and project development during the year. This underpins our targets for continuing growth.”

In 2005, 17 new upstream projects were sanctioned by Statoil, 12 on the NCS and five internationally. The group has also secured a number of new exploration and production licences in Norway, the USA, Brazil, Libya, the UK, the Faeroes and Nigeria.

“I am pleased that in 2005 we again succeeded in replacing production with new reserves,” says Mr Lund. “The average reserve replacement ratio for the past three years is 102 per cent. New field developments, good exploration results and active business development have strengthened our industrial position and basis for further growth.”

The group’s financial position is strong. The board will propose to the annual general meeting that a total dividend of NOK 8.20 per share be paid for 2005, including NOK 4.60 as a special dividend resulting from high oil and gas prices.

In health, safety and the environment, the key safety indicators show a positive development in 2005. Injuries and other serious incidents have declined considerably.

“I note that our purposeful and long-term safety efforts are showing results,” says Mr Lund. “But in the light of the serious incidents experienced, we cannot be satisfied. The work towards further improvement has our highest priority."