Following the agreement reached with Gazprom in October 2007 on a 24% equity stake in the Shtokman Development AG, our work in this area has been intensified.

One of the main challenges in north-western Russia is the lack of employment and a private sector that is not yet well developed. Oil and gas resources in the area, both offshore and onshore, are considered to be among the largest remaining proven reserves in the world. Hence, the decision to develop the Shtokman field has led to a growing sense of optimism in the region.

Social responsibility in north-western Russia - planning for growth

As part of a long-term commitment to the petroleum sector in north-western Russia, we have worked with regional authorities in Murmansk and Arkhangelsk since the early 2000s to develop a social responsibility plan for the area based on the needs and requirements of the nascent local petroleum industry and the region.

The plan contains activities in the following four areas:

• Mapping and development of the local supplier industry in the region
• Strengthening of the educational sector to ensure a steady supply of specialised skills and talent to the growing petroleum industry
• Improving the understanding of and capacity to address environmental challenges and risks associated with the industry
• Capacity-building and technical assistance in the social sector

Our contribution and responsibility primarily consist of providing the required expertise and skills, drawing on both internal and external resources, and ensuring that these activities are financed, organised and otherwise implemented in an effective manner.

There is a clear expectation, however, that all financed activities have to be locally owned by the relevant government authority or other locally-based institution, which is also ultimately responsible for the successful implementation of these activities.

To ensure that all activities receive the required support from both the company and the local government, Memorandums of Understanding (MoUs) were entered into and signed at the highest level in August (Murmansk) and December (Archangelsk) 2005.

Working groups were also set up, with representative experts from both parties, to continue the planning process. The working groups report to a steering committee, which decides which projects will receive funding and be implemented.

Following the Shtokman agreement in October 2007, a renewed MoU was signed in January 2008 with Murmansk Oblast (Murmansk County) and Arkhangelsk in February, further emphasising StatoilHydro's commitment to the region. Bengt Lie Hansen, president of StatoilHydro Russia, said:

"The ongoing efforts in partnering with local government and industry in Murmansk and Arkhangelsk Oblast are producing results. Our renewed agreements will consolidate the work and initiatives already carried out by the former Statoil and Hydro's oil and gas division in the region. We believe that, in cooperation with the local administration and industry, our efforts will benefit this region."