The guiding for 2012 reflects expected effects of our recent acquisitions of US shale gas and 50% of the Peregrino development.
Maintenance activity is expected to have little impact on the equity production in the first quarter of 2009.
Capital expenditures for 2009, excluding acquisitions, are estimated to be around USD 13.5 billion. Approximately 50% of the investments forecast for 2009 are in assets expected to contribute to growth in oil and gas production, about one third are related to investments in currently producing assets, with the remainder in other activities.
The unit production cost for equity volumes is estimated in the range of NOK 33 to 36 per barrel in the period from 2009 to 2012, excluding purchases of fuel and gas for injection. For 2009, the unit production cost is expected to be temporarily in the upper end of this range. The short-term increase is expected to be caused by several large fields ramping up or preparing for production. In addition, some fields, such as ACG and Kvitebjørn, are not producing at full capacity. Furthermore, a high degree of maintenance during 2009 and continuing uncertainty regarding developments in the NOK/US dollar rate are expected to adversely affect the unit production cost in 2009.
StatoilHydro's ambition is to deliver a competitive ROACE compared with its peer group.
Exploration drilling is the primary tool for growing our business. We will continue to high-grade our large portfolio of exploration assets and we expect to maintain a high level of exploration activity in 2009, although slightly lower than in 2008. We expect to complete between 65 and 70 exploration and appraisal wells in 2009. Rigs have already been secured for most of the exploration drilling in 2009 and to some extent also for subsequent years. Exploration activity is estimated to amount to some USD 2.7 billion for 2009.
The year 2008 was one of the most volatile periods in the product, gas liquid and crude oil markets. While natural gas prices have been strong in Europe, crude oil and gas liquids prices decreased dramatically during the third and fourth quarters of 2008. We anticipate that crude oil and gas liquids prices will remain at relatively low levels and that prices will continue to be volatile at least in the near term.
The price development for natural gas is uncertain in the short term due to the financial turmoil. The natural gas market is also influenced by developments in the overall power market and the industrial segment in which gas competes with coal and fuel oil products, both having fallen significantly in price. Going forward, the value of natural gas in the power segment will increasingly be determined by competition with coal, renewable energy and nuclear energy. Climate policies and regulations will also be important factors in determining gas pricing.
New LNG capacity is coming on stream, and will be directed to the most favourable markets. As the amount of available LNG is anticipated to be substantial, there is a corresponding uncertainty related to the price effects to the relevant markets.
In the long term, we continue to have a positive view of gas as an energy source. Domestic production of gas in the EU continues to decline, while demand for gas is expected to increase in the long term, particularly due to the lower carbon footprint of natural gas compared with oil and coal. In the US we believe that our position in the Marcellus shale gas acreage in combination with Gulf of Mexico production and our LNG regasification capacity position at Cove Point will provide a foundation for growth in our US market position in the years to come.
StatoilHydro's income could vary significantly with changes in commodity prices while volumes are fairly stable through the year. There is a small seasonal effect on volumes between winter and summer seasons due to normally higher off-takes of natural gas during cold periods. There is normally an additional small seasonal effect on volumes from a higher level of maintenance of offshore production facilities since generally better weather conditions allow for more maintenance work during the second and third quarter each year.
These forward-looking statements reflect current views about future events and are, by their nature, subject to significant risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. See "Forward-Looking Statements" on Form 20F.
