Liquidity

Our annual cash flow from operations is highly dependent on oil and gas prices and our levels of production. It is only influenced to a small degree by
seasonality and maintenance turnarounds. Fluctuations in oil and gas prices, which are outside our control, will cause fluctuations in our cash flows. We will
use available liquidity to finance Norwegian petroleum tax payments, any dividend payment and investments.

As of 31 December 2009, we had liquid assets of NOK 31.7 billion, including NOK 24.7 billion in cash and cash equivalents and NOK 7.0 billion of current
financial investments. Compared to year end 2008, current financial investments decreased by NOK 2.7 billion during 2009, and cash and cash equivalents increased by NOK 6.1 billion. The increase of liquid assets during 2009 was mainly due to new long term debt. As of 31 December 2009, the group also had USD 2.0 billion available in a committed revolving credit facility from international banks, including a USD 500 million swing-line facility. The facility is available for drawdowns until December 2011.

Statoil's general policy is to maintain a liquidity reserve in the form of cash and cash equivalents in its balance sheet, and committed, unused credit facilities
and credit lines in order to ensure that it has sufficient financial resources to meet its short-term requirements. Long-term funding is raised when the group
identifies a need for such financing based on its business activities and cash flows, as well as when market conditions are considered favourable.

We aim to keep ratios relating to net debt at levels consistent with our objective of maintaining our long-term credit rating at least within the single A
category. In this context Statoil carries out different risk assessments, some of them in line with financial matrices used by S&P and Moody's, such as free
cash flow from operations over net debt and net debt to capital employed.
Our long-term and short-term ratings from Moody's are Aa2 and P-1, respectively. Our long-term rating from Standard & Poor's is AA-, reflecting the
majority ownership by the Norwegian state. Standard & Poor's short-term rating of Statoil is A-1+. The current rating outlook is stable from b o th agencies.

Statoil will in 2010 continue to secure necessary financial flexibility and, depending upon oil- and gas price development, may issue bonds if market
conditions are viewed as attractive.

Net interest-bearing financial liabilities amounted to NOK 75.3 billion at 31 December 2009, compared to NOK 46.0 billion at 31 December 2008. The change of NOK 29.3 billion was mainly related to an increase in non-current financial liabilities of NOK 41.1 billion, decreased current financial liabilities of NOK 12.5 billion, and an increase in cash, cash equivalents and current financial investments of NOK 3.4 billion.

The net debt to capital employed ratio, defined as net interest-bearing debt in relation to capital employed, was 27.3% at 31 December 2009, compared with 17.5% at 31 December 2008. The 9.8% increase was mainly related to an increase of net financial liabilities of NOK 29.3 billion, in combination with an increase in capital employed of NOK 13.4 billion.

The group's borrowing needs are mainly covered through the issuing of short-term and long-term securities, including utilisation of a US Commercial Paper Programme and a Euro Medium Term Note (EMTN) Programme (the limits of the programme being USD 4 billion and USD 6 billion, respectively),
and through draw-downs under committed credit facilities and credit lines. After the effect of currency swaps, 100% of our borrowings are in US dollars.

Our financial policies take into consideration funding sources, the maturity profile of long-term debt, interest rate risk management, currency risk and
management of liquid assets. Our borrowings are denominated in various currencies and swapped into USD, since the largest proportion of our net cash
flow is denominated in USD. In addition, we use interest rate derivatives, primarily consisting of interest rate swaps, to manage the interest rate risk of our long-term debt portfolio.