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NOK 63 billion on goods and services

March 13, 2006, 00:55 CET

In 2005 Statoil as operator purchased goods and services for NOK 63 billion, of which around NOK 45 billion went to Norwegian suppliers.

This level is about the same as for 2004. According to the prognoses for 2006 and the following years, there will be no significant change to this level.

"This is driven by a high level of activity on the Norwegian continental shelf (NCS) and in international operations," says Stig Bergseth, senior vice president for the sourcing and supplier strategy business cluster in the Technology & Projects (T&P) business area. "Several development projects have been sanctioned, and the need for maintenance and upgrading of production installations is increasing."

The activity level has been boosted by high oil prices, and rising prices in the market, informs Mr Bergseth.

On the NCS nearly half of all deliveries go to development and modification projects.

The second largest item is the drilling of new and maintenance of existing production wells, along with gathering new seismic and exploration drilling.

Statoil also allocates around NOK 1 billion each year to research and development. Around half of this amount is spent on purchasing services.

"We expect that the market will continue to be tight, both on the NCS and internationally", comments Mr Bergseth.

In order to reduce the effects of tight markets and continued rising prices, Statoil is working to improve its procedures for the practical execution of each procurement and strategic planning of the overall procurement needs. The most significant measures are the Best practice procurement corporate initiative and the implementation of a new structure for the procurement function.