Overall strategic direction

Our overall long-term strategy builds on the following key components:

• Utilise our technology and management capabilities to capture the full potential of our positions on the Norwegian continental shelf (NCS).
• Deliver profitable international growth in the short and medium term from existing positions, whilst creating new opportunities for long-term value creation.
• Use exploration as a key growth tool to secure long-term production capacity.
• Develop profitable midstream and downstream positions in support of our upstream activities.
• Pursue selected business opportunities for renewable energy production and CCS.
• Apply technology and innovate in order to create value and accelerate asset developments.
• Minimise carbon emissions from, and the general environmental impact of, our upstream and midstream activities.
• Utilise organisational capabilities as a global energy company.

Short term priorities are to conduct safe and efficient operations and to deliver production growth in line with our guidance. We are transforming the way we work on the NCS in order to realise the full value potential of our positions there. We continue tight management of our cost base. Retaining financial flexibility remains important for us. In the longer term, our priorities are to optimise, mature and execute the current project portfolio, taking into account the dynamic economic environment, the globalisation of gas markets and the politically imposed framework and regulatory measures aimed at mitigating the risk of adjustment costs induced by climate change.

Utilising our capabilities  

Gaining access to sufficient petroleum resources is increasingly challenging. We are seeking new opportunities in demanding areas requiring the full use of our legacy competence in technology and management. We also realise that mastering the most demanding areas qualifies us for succeeding in less demanding areas. There are four demanding areas in which Statoil has experience and competitive advantage:

• Deep water: we are active in six of the most interesting deepwater basins in the world - the Gulf of Mexico, Brazil, Angola, Nigeria, Norway and Indonesia.
• Harsh environments: we see the resource potential of the Arctic as particularly interesting, although it is a region that is not expected to deliver substantial results until the medium to longer term due to technical and environmental challenges .
• Heavy oil: we have positions in Norway, Canada, Venezuela, Brazil and the United Kingdom.
• Gas value chain: we are active in finding and delivering gas in many countries and have an extensive portfolio that includes Liquefied Natural Gas (LNG) and unconventional gas, e.g. US shale gas.

Responding to the climate challenge

Our ambition is to be an industry leader in carbon efficiency in terms of having a low climate impact in each of the activities in which we are engaged. We aim to create value by seeking low-carbon and energy-efficient competitive solutions in all areas of our business. Responding to the climate challenge in an effective manner will give our company a competitive advantage in the future.

Maximising value creation from upstream access opportunities

We will use exploration as a key growth tool to secure long term growth of reserves, production and value. This is consistent with maximising the long-term value of the NCS and with leveraging our core competencies to build, mature and deliver profitable growth outside Norway. We will continue to optimise our exploration portfolio, balancing frontier-, growth- and infrastructure led exploration. 

We will continue selective business development activities to optimise the portfolio.

Maximising long-term value creation on the Norwegian continental shelf (NCS)

We maintain our position as the main industry player on the NCS.

We continuously work to improve our HSE performance and our cost and operational efficiency as well as implementing measures for improved hydrocarbon recovery (IHR). We see a structural shift in our non-sanctioned project portfolio from a few large, complex projects to a high number of mainly smaller projects or sub-sea tie-backs. This demands a high level of standardised technical concepts as well as simplified development processes. 

Building and delivering profitable international growth

Our strategy is to deliver profitable international growth in the short and medium term from existing positions, while creating new opportunities for long-term value creation. We will utilise our core expertise in areas such as deep waters, harsh environments, heavy oil and the gas value chain to pursue attractive business opportunities around the world. Statoil's history as a state oil company gives us a competitive advantage in understanding host countries' needs and requirements and in working with them to develop the resource base to their benefit while creating value for our shareholders. 

We anticipate that Statoil's future growth mainly will take place outside the NCS. Our short to medium-term focus is on delivering and maturing a high-quality project portfolio on time and within budget. In the longer term, our international asset base will allow us to grow and become more diversified, both in geographical terms and in types of production. 

Developing profitable midstream and downstream positions

Statoil's strategy is to develop projects and to produce oil and gas where we see a potential for attractive returns and added value. We have a strong upstream focus in terms of our total value and asset base, complemented by a  midstream and downstream portfolio related to marketing, trading, refining and storage of oil and gas products.  We seek to capture synergies from our upstream positions and the market characteristics. 

We anticipate further globalisation of the gas markets, and changes in the location of our oil and gas production. We also expect changes in consumption patterns in the aftermath of the financial crisis and as a result of the introduction of greenhouse gas mitigation measures by the authorities. We will monitor our midstream and downstream activities and adjust in a timely manner to meet the needs of markets and of our upstream positions to optimise our portfolio and maintain shareholder value.. 

Creating platform for renewable energy production and carbon capture and storage

Our strategy for renewable energy production and carbon management is to utilise existing core capabilities and current business positions to create profitable positions in renewable energy, prioritising offshore wind projects while keeping track of opportunities in other other areas through technology and selective investments. 

We are building a portfolio of near-shore and off-shore wind farms and we are developing technology for large-scale deep water offshore wind power generation. In this context, our participation in Sheringham Shoal UK wind farm was an important milestone achieved in 2009 as was the preparation for the Forewind consortium on the Dogger Bank development to which we were awarded rights in 2010. Off the south-west coast of Norway we are piloting a prototype of the world's first full-scale floating wind turbine, Hywind, which is designed to be placed at water depths between 120 and 700 metres.

In addition, we reduce emissions of greenhouse gases from fossil energy production through carbon capture and storage (CCS).

Using technological innovation and implementation as a key business enabler

Technology is a key enabler in terms of Statoil realising its goals as an internationally competitive energy company. Our ambition is to attain distinctiveness and industrial leadership by aligning our technology and R&D efforts with our portfolio of activities and vice versa.  

Based on our history of technological achievements, we actively seek to master demanding and critical developments within our priority activity areas. We prioritise technology efforts that add value to resources, and that allow us to develop smarter solutions for energy exploration and production, that are cost-effective and environmentally benign. We refine and standardise our technical requirements and work processes.  

Technology innovation and implementation is critical to success in many of our activities, such as enabling field development in frontier deep waters and Arctic areas, the production of heavy oil, exploration for hydrocarbons trapped below salt, and managing environmental and climate-related issues. In addition, to enable sustainable energy provision in the long term, we aim to remain competitive in a broad range of core and emerging technologies, including offshore wind and sustainable biofuel.