In recent years the oil and gas industry has experienced consolidation, as well as increased deregulation and integration in strategic markets.

StatoilHydro competes with major integrated oil and gas companies, as well as independent and government-owned companies for the acquisition of assets and licences for the exploration, development and production of oil and gas, and for the refining, marketing and trading of crude oil, natural gas and related products.

Key factors affecting competition in the oil and gas industry are oil and gas prices and demand, the cost of exploration and production, global production levels, alternative fuels and governmental and environmental regulations.

StatoilHydro's ability to remain competitive will depend, among other things, on management's continued focus on reducing unit costs and improving efficiency, maintaining long-term growth in our reserves and production through continued technological innovation and our ability to seize international opportunities in areas where our competitors may also be actively pursuing exploration and development opportunities.

The company believes that it is in a position to compete effectively in each of its business segments.