The Power of Possible is an Attitude; It is in STO’s DNA

Passion - Creativity -

Innovation - Initiative -

Gary Hamel Professor

Strategic Management London Business School

Intellect - Dedication -

Compliance -

The Foundation For Competing

The Competitive Edge

WHY NOT & WHAT IF?

Troll Johan Sverdrup Peregrino Bay Du Nord

Troll • What if we could recover the thin oil zone with multi-

lateral wells? Johan Sverdrup • What if oil migrated into that huge flat trap? Peregrino • What if we could buy it all, increase the recovery/de-risk it and then

farm down? Bay Du Nord • Why not execute our ‘access at scale’ strategy in the Flemish, believe in

what we are doing and then de-risk the 3 best high-impact prospects?

Why not & What if?

Troll What if we could recover the thin oil zone with multi-lateral wells?

Johan Sverdrup What if oil migrated into that huge flat trap?

Peregrino What if we could buy it all, increase the recovery/de-risk it and then farm down?

Bay Du Nord Why not execute our ‘access at scale’ strategy in the Flemish, believe in what we are doing and then de-risk the 3 best high-impact prospects?

40 years of experience offshore Norway Hammerfest

Harstad

Bergen

Stavanger

Troll subsea

Stjørdal

Kollsnes

Troll A

Troll B

Troll C

35 years history and 50 to go

1979 Discovery well

1990 Long term oil production test

1991 TOGI - Gas export to Oseberg

1995 Troll B

1996 Troll A

1999 Troll C

2000 Troll Pilot

A

A

B

B

10 km 20 km

Troll Gas - A giant • Tallest construction ever moved by man

− Height 472 m

− Weight > 1 million ton

− Power from shore

• Largest gas field in the North Sea

− ~40% of NCS gas reserves (50 Tcf)

− Gas to ~10 million European households

• Expected life time 2060+

Troll Oil - Impossible made possible

• None commercial oil field in 1980’s − Vertical well technology − Thin oil column (9 - 27 meter) − Large area (770 km2)

• Largest oil producer on NCS 2013 − 120 subsea well slots − 345 well branches (180 wells) − 1 million meter reservoir drilled − 2 100 million bbl reserve ambition

Technology driven reserve growth

1985 1990 1995 2000 2005 2010 2015 2020 2025 2030

0,6

0,5

0,4

0,3

0,2

0,1

0

2500

2000

1500

1000

500

0

Recovery factor oil

Inflow controlled

wells

Horizontal wells from

floaters

Branched wells

Ambition

4D seismic

None commercial

Branched wells Branch control RCP(AICD)

Produced

RF oil Million bbls

The challenge is becoming even harder….

• Wells located at OWC with thinner oil zone and uneven OWC

• Reservoir length up to 15 000 m per producer

• Valves along well path to choke

back gas and secure even inflow

• Controllable branches

Current phase (< 6 meter oil column)

13m

Initial phase ~2500 m > 6000 m

13m

GAS

OIL

WATER

… and we still work on future solutions • More robust well concepts − Fish bones, ditch wells, multi branched

• Dual gradient drilling − Decreasing reservoir pressure - loss - drilling limitations

• Improved AICD technology − Reduce inflow from water and gas producing intervals

• Improved logging tools to optimize well path − Sand quality distribution in reservoir − Distance to GOC

Johan Sverdrup – the new giant at the Norwegian Shelf

• Among the largest oil discoveries at the NCS • Resource estimate 1.8 – 2.9 billion boe • At peak app. 25% of oil production at the NCS • Plateau production of 550,000-650,000 boe/d • 50 years of production • Investment range USD 17 to 20 billion for phase 1

FLORØ

BERGEN

STAVANGER

Utsira High – where the story started

• Top quality permability • Medium oil quality (28 API)

Johan Sverdrup – excellent reservoir properties

16/2-6 16/3-2 projected (6km) 16/2-8 TWT (ms)

• Flat and large • Need for pressure support

Johan Sverdrup – Modern field center by the largest offshore operator

Ambition of 70% • Jackets • Subsea templates • Conventional oil processing • Gas lift

Based on proven technology and project execution experience

Flexible design and options for the future

• Extended infill drilling • Permanent reservoir monitoring • Inflow control devices • Improved production efficiency • Look ahead / look around drilling

recovery rate

Peregrino oil field offshore Brazil

Peregrino

Peregrino

• More than 4 bill bbls of oil in place • Heavy oil – 14 API; high viscosity • Capacity of 100,000 bbl/d • Over 63 million bbl produced since

April 2011 • Development Strategy:

• High reservoir exposure • Flow assurance • Continuous IOR EOR

• Marketing: • Utilizing Statoil’s global marketing network

Peregrino oil field

Increased oil recovery program

Discovery well

10 x value realization through technology

First oil April 2011

Making Peregrino Possible

• Changing from vertical to horizontal wells • Reservoir Management allowing produce all water

offshore • Heavy Oil processing competence from Grane field

securing flow assurance

1994 2000 2010 2020

11

?? ?? ??

Polymer

Other EOR

Infill drilling Oil-leg injection

2012 2013 2014 2015 2020+

MLT wells AICD first use

AICD full field Broadband

seismic Oil leg Injector

(pilot)

Extended Reach Wells

Infill wells

Peregrino Phase 1 at

project sanction

Already implemented

Execution phase ongoing

Under evaluation

Long term potential

Peregrino IOR | Key Technologies Ambition: 30% recovery

Implementation timeline

Longest Open Hole Gravel Pack in Brazil

Peregrino Future Development

• Peregrino Phase II, developing South and South West areas

• Additional value creation

− Peregrino C tie back to existing FPSO

− Increased competence on multiphasing transportation allowed us to save to cost of an FPSO

Opening a new oil basin • Leading basin position

• Bay du Nord – break through oil discovery (300-600 mmbbl)

• Positioned for growth

• Assessing feasibility of accelerated development

• Appraisal and exploration 2014+

The development of Flemish Pass will require only proven technology

Ice management and other developments will be done in a safe and responsible way

Stakeholder Engagement and Commitment

Erasing many more IMs in IMpossible; A Key Part of Statoil’s Value Creation Vision

• 4 offshore examples of what IMagination + execution can do

• Many IMs waiting to be erased onshore too; Our NA shale assets are the highest contributors regionally

• You are very IMportant to us; Thank you for cooperation, help and your trust

• Now let’s celebrate!