Nevertheless, it is necessary to rapidly utilise new technology to increase the resource base and maximise production.

Technology & New Energy (TNE) is the driving force for the development and implementation of new technology in the company. This is achieved by providing best practice support and expertise for our operations, developing world-class technical concepts for our development projects, and leading established corporate initiatives in order to improve our performance in exploration, IOR and integrated operations. In this manner, TNE will support the other business areas in achieving corporate targets for production growth, increased regularity, reduced costs and improved drilling efficiency.

Selected advances made in 2008 are summarised below:

One of the major challenges in exploration is to acquire the best seismic image of the subsurface, even in areas with very complex geology, and subsequently combine seismic data without compromising geological insights. Our Integrated Imaging workflow allows for improved integration of geology and geophysics in exploration subsurface imaging, leading to better subsurface interpretation in exploration and increasing the probability of oil and gas discoveries. This method is a clear leader in exploration seismic imaging and interpretation and supports the company's quest to be the leading exploration company.

The first set of 3D electromagnetic data (EM) was retrieved from the Troll area on the Norwegian continental shelf this year. Increased insight into acquisition and interpretation technology of the Troll data increases the use of EM in the exploration workflow and adds significantly to the use of EM data for subsurface identification of oil and gas. Electromagnetic data have potentially siginificant applications in hydrocarbon exploration by enabling the oil and gas to be detected in reservoirs instead of water. Combined with seismic data, the EM data can reduce uncertainty in exploration and lead to higher discovery rates.

The massive volume of exploration data and need for efficient analysis to ensure exploration success has led to the development of a proprietary version of Google Earth. The StatoilHydro Earth Exploration Toolbox, visualised in the Google Earth environment, is a significant step towards quick access and interpretation of exploration data, leading to an effective workflow for evaluating subsurface prospectivity. Such workflows assist the rapid development of subsurface geology models and increase the probability of locating prospective areas and layers for the discovery of oil and gas.

StatoilHydro is now qualifying a new down-hole drilling tool, the Rotary Steerable System (RSS), together with Schlumberger. These tools will be used to drill sidetracks from old wells without removing the production tubing. A window out to the formation is made in one side of the old well and the RSS tool is then used to drill a new hole outside the window. This quick departure from the old well will dramatically increase the ability to reach reservoirs that could not be reached as efficiently before, if at all. The impressive steering characteristics of the tool also make it possible to reach targets further away from the old well and ultimately double the number of targets and recoverable reserves that can be reached using this technology.

Current technology for capturing CO2 from flue gases is associated with significant energy requirements and large capital costs. Exhaust gas recirculation (EGR) is a method known to reduce costs and energy requirements, and StatoilHydro has monitored the technology for several years. A technology qualification programme is under development for EGR in connection with the General Electric Frame 9E gas turbines at Mongstad.