Overall strategic direction

Our long-term strategy remains unchanged, and we are taking firm action to manoeuvre through the current turmoil. StatoilHydro's strategy is to create shareholder value as an upstream-oriented, and technology-based energy company. This strategy can be summarised as:

• Maximising long-term value creation on the NCS
• Building and delivering profitable international growth
• Developing profitable midstream and downstream positions
• Creating a platform for new energy solutions and production

In the short term, our main focus will be on delivering on our production targets and managing our cost base. This means delivering high operational performance, with a strong focus on HSE. In the longer term our focus is to develop the current project portfolio with quality and at a competitive cost to enable us to grow profitably.

Leveraging our technology and capabilities

There are four areas of high potential in which StatoilHydro has competitive advantages and the experience to face challenges and capture opportunities:

• Deep waters: We already have a relatively significant exposure to six of the most interesting deep water basins in the world - the Gulf of Mexico, Brazil, Angola, Nigeria, Norway and Indonesia.
• Harsh environments: Examples are Shtokman, Goliat, and Snøhvit. We see the resource potential of the Arctic as particularly interesting, although it is a region that is expected to deliver results in the medium to longer term due to the technical and environmental challenges.
• Heavy oil: For example the Grane field in Norway, the oil sands position in Canada, heavy oil in Venezuela, and more conventional offshore heavy oil projects in Brazil and the United Kingdom.

Gas value chain: Including Liqueified Natural Gas (LNG) and unconventional gas from the US shale gas transaction.

Maximising long-term value creation on the NCS

StatoilHydro has a unique position on the NCS, where we operate 39 fields and produce more than three mmboe per day of production. We have a strong presence in all NCS regions and operate around one-third of the NCS's expected reserves. We expect our asset base, experience and technical leadership will enable us to fully utilise these resources. We anticipate the NCS portfolio will continue to be a core activity area, income generator and technology base for many years to come. We believe that significant exploration potential remains and we aim to maintain our position as the main industrial architect.

We are focused on improving our HSE performance, regularity and drilling efficiency, and we plan to use Improved Oil Recovery (IOR) measures and other operational best practices to maximise the potential of our assets. We intend seek to high grade our portfolio, through acquisitions and divestments.

Building and delivering profitable international growth

We anticipate that StatoilHydro's growth beyond 2012 will take place mainly outside the NCS. Our short- to medium-term focus is on delivering a high quality project portfolio to a high quality and on time and within budget. After the merger, we are a stronger company with increased capacity and a larger resource pool of finances and employees, well positioned to pursue further international growth. In the longer term, we expect that our international asset base will transform the structure and profile of our company, allowing us to grow and become more diversified, both in geographical terms and in types of production.

We will use our core expertise in areas such as deep waters, harsh environments and heavy oil and gas value chains to pursue new business opportunities around the world. We have already demonstrated this through our acquisition of the oil sands position in Canada, the Peregrino field in Brazil, and the US shale gas position - all of which represent new challenges and opportunities for us to apply our technology and experience. For a description of these acquisitions see Operational Review - International E&P.

We will continously seek to high grade our portfolio, for instance as we have done in our long term partnership with Sonatrach on Cove Point, and our acquisition of the remaining 50% of Peregrino and its operatorship. StatoilHydro's history as a national oil company (NOC) also gives us a competitive advantage in developing new cooperative models with other NOCs that are seeking partners for developing their resource bases.

Developing profitable midstream and downstream positions

StatoilHydro's ambition is to develop upstream projects and production in oil and gas where we see attractive returns and value added to the upstream positions. Compared with many of our peers, we have a strong upstream focus in terms of our total value and asset base. Furthermore, we also have a sizeable mid- and downstream portfolio in relation to marketing, trading, refining and storage of oil and gas products.

Creating a platform for new energy solutions and production

Our ambition in this area is to create a profitable business and to reduce emissions og greenhouse gases from our production. StatoilHydro is a leading industry player in carbon capture and storage. We are looking for opportunities for commercially sound investments in renewable energy, particularly in wind and sustainable biofuels, where we can exploit our offshore experience and fuel marketing know-how. We aim to build a portfolio of near-shore wind parks and develop technology for large scale offshore wind power generation.

Using exploration as a key enabler for value creation

Consistent with the strategies for maximising the long-term value from the NCS as well as building and delivering profitable international growth, StatoilHydro's ambition is to develop upstream projects and production in oil and gas where we see attractive returns, both in Norway and internationally. Our exploration strategy is key to this and is based on gaining access to high-potential basins globally and targeting multiple blocks in high-focus areas.


Our exploration strategy can be divided into three categories:

Frontier exploration aims at proving new fields in areas where the petroleum system remains unproven.

Growth exploration involves exploring for fields with standalone potential in areas where the petroleum system is known. We have strong strategic focus on being an active operator with a view to shaping the future direction of our business.

Infrastructure-led exploration seeks to provide resources to existing infrastructure in a timely manner.

Using technological innovation and implementation as a key business enabler

StatoilHydro aims to build even stronger industry positions, and technology is a key enabler for achieving this goal and for realising our key strategies. The merger strengthened us significantly in the area of technology, providing us with a platform to further exploit our technical base. One example is the world class technology used on Troll and Gullfaks, where extended, multilateral and smart wells drain previously unrecoverable resources.

Our ambition is to attain distinctiveness and industrial leadership in six specific technologies:

• Exploration seismic imaging and interpretation
• Geophysical reservoir monitoring
• Oil sand reservoir characterization and recovery
• Intelligent drilling
• Subsea processing and long-range multiphase transport
• Carbon dioxide management

Technology makes a decisive contribution in all our activities, such as in field development in frontier deep waters, Arctic areas, heavy oil production, subsalt exploration, and environmental and climate issues. Our ambition is also to stay competitive in a broad range of core and emerging technologies along the energy provision value chain, including offshore wind and sustainable biofuel.

We aim to maintain the right course to capture future business opportunities and to develop smarter solutions to explore for and to produce energy in cost effective and environmentally friendly ways.