Twelve months ended 31 December
Income statement (in NOK billion)	2008	2007	08 -07 Change	2006	07-06 Change
Total revenues and other income	110.8	73.5	51%	97.1	(24 %)
Purchase, net of inventory variation	80.9	56.7	43 %	61.3	(8 %)
Operating expenses	13.8	12.3	13 %	12.1	2 %
Selling, general and administrative expenses	1.3	1.1	9 %	0.5	125 %
Depreciation, amortisation and impairment	2.3	1.8	25%	1.4	29 %
Total expenses	98.3	72.0	37%	75.4	(5 %)
Net operating income	12.5	1.5	739%	21.7	(93 %)
Operational data:
Natural gas sales StatoilHydro entitlement (bcm)	39.3	35.6	10 %	35.9	(1 %)
Natural gas sales (third-party volumes) (bcm)	5.9	6.4	(8 %)	4.3	49 %
Natural gas sales (bcm)	45.2	42.0	8 %	40.2	4 %
Natural gas sales on commission	1.4	0.8	79 %	NA	-
Natural gas price (NOK/scm)	2.40	1.66	45 %	NA	-
Transfer price natural gas (NOK/scm)	1.87	1.39	34 %	1.35	3 %
Regularity at delivery point	100.0 %	100.0 %	0%	100.0 %	0 %

The total revenues in the Natural Gas business mainly come from gas sales under long-term gas sales contracts and tariff revenues from transportation and processing facilities. Natural Gas generated revenues of NOK 110.8 billion in 2008, compared with NOK 73.5 billion in 2007 and NOK 97.1 billion in 2006. The 51% increase from 2007 to 2008 was mainly due to the high prices  for natural gas throughout 2008 compared with 2007, as well as a 10% increase in entitlement sales volumes.

The 24% decrease in total revenues from 2006 to 2007 was mainly due to declining natural gas prices measured in NOK in 2007 and negative changes in fair value of derivatives.

Cost of goods sold increased by 43% from 2007 to 2008 and decreased by 8% from 2006 to 2007. The increase from 2007 to 2008 is mainly related to a 34% increase in transfer price and higher NCS volumes purchased from E&PN. The decrease from 2006 to 2007 is mainly related to a decrease in the third party purchase price of natural gas, partly offset by a slight increase in the transfer price paid to E&PN.

Operating, selling and administrative expenses increased by 12% from 2007 to 2008 mainly due to higher transportation costs related to increased LNG transportation and increased booking of throughput capacity in Gassled in 2008. The 6% increase from 2006 to 2007 is mainly caused by early retirement cost accruals and increased accruals for removal costs

In 2008, the net operating income was NOK 12.5 billion, compared to NOK 1.5 billion in 2007. The volume weighted average sales price increased by 45%, amounting in total to NOK 31.2 billion, of which the rise in European piped gas price contributed NOK 27.0 billion. Changes in European gas prices lag behind changes in crude oil prices.

Net operating income for 2007 was NOK 1.5 billion, compared with NOK 21.7 billion in 2006. The decrease of NOK 20.1 billion was mainly due to a 13% decrease in prices for piped natural gas, which reduced income by NOK 9.5 billion, and negative changes amounting to NOK 10.3 billion in the fair value of derivatives.

With effect from 2008, Natural Gas provides an explanation of the adjusted net operating income from its two main business activities: Processing and Transport and Marketing and Trading. Processing and Transport consists mainly of our share in Gassled and the Technical Service Provider role at Kårstø and Kollsnes. Marketing and Trading consists of our gas sales and trading activities. The Marketing and Trading activity carries the associated transportation costs within the Natural Gas segment. The split between business segments is only restated for 2007.

Net operating income in Processing and Transport was NOK 5.6 billion in 2008, compared to NOK 5.6 billion in 2007. Processing and Transport income increased by NOK 0.3 billion, while fixed operating expenses and depreciation increased by NOK 0.3 billion.

Net operating income in Marketing and Trading was NOK 7.0 billion in 2008, compared to a loss of NOK 4.1 billion in 2007. Marketing and Trading income increased by NOK 11.1 billion, mainly due to increased prices (NOK 31.2 billion) and higher volumes sold (NOK 7.7 billion). The main factors offsetting the increased income were NOK 24.2 billion in higher costs of goods sold, NOK 1.5 billion in increased operating expenses, NOK 0.5 billion increased depreciation expences, and NOK 0.2 billion in increased selling and administrative expenses. The increased operating expenses are mainly due to higher transportation costs in 2008.

Total natural gas sales were 45.2 bcm (1.60 tcf) in 2008, 42.0 bcm (1.48 tcf) in 2007 and 40.2 bcm (1.42 tcf) in 2006. The 8% increase from 2007 to 2008 in gas volumes sold was mainly due to increased entitlement gas sales, but this was partly offset by a net decrease in StatoilHydro third party sales volumes. Third party gas is mainly used for portfolio balancing and optimisation and trading purposes. The increase in entitlement sales volumes mainly relates to higher production from the NCS in addition to the first full year of production from Shah Deniz, Azerbaijan. Of the total natural gas sales in 2008, 39.3 bcm (1.39 tcf) was entitlement gas, including 1.4 bcm (0.05 tcf) of gas from Shah Deniz in Azerbaijan and 0.9 bcm (0.03 tcf) from the Gulf of Mexico, while 2.6 bcm (0.92 tcf) was the SDFI's share of US piped gas.

The 4% increase from 2006 to 2007 in gas volumes sold was mainly due to increased third-party gas sales, but this was partly offset by a net decrease in StatoilHydro entitlement sales volumes. The decrease in entitlement sales volumes was mainly related to production problems on Kvitebjørn throughout 2007.

The weighted average gas price for our sales was NOK 2.40 per scm in 2008, compared to NOK 1.66 per scm in 2007, an increase of 45%. The increase in price from 2007 to 2008 was mainly due to an increase in prices for oil products (such as gasoil and fuel oil) and other competing energy sources, as well as higher gas prices on the National Balancing Point (NBP) in the UK. The sales of natural gas from In Salah are reported by the International Exploration & Production business area. The weighted average price is only available from 2007.