Dear reader,

2011 was a good year for Statoil. We improved on safety and had more stable operations. We made good strategic progress and made several new discoveries. Our financial performance was strong, resulting in a record net operating income and a competitive shareholder return.

Safe and efficient operations remain our first priority. Since 2004 we have seen a consistent improvement in our overall safety results and the positive trend continued in 2011. Equity production was in line with our plans and ended at 1.85 million barrels of oil equivalent per day. Supported by solid prices for liquids and gas and a gain on sale of assets, we delivered net operating income of NOK 212 billion.

A strong exploration performance added more than 1 billion barrels to our resource base. The Johan Sverdrup field in the North Sea is one of the world's largest oil discoveries in recent years. The Skrugard and Havis high-impact discoveries in the Barents Sea represent a breakthrough in a new petroleum province. Outside the NCS, we made a high-impact discovery on Peregrino South in Brazil. In addition, we have over the last year acquired new and exciting acreage in areas including Angola, Canada, Indonesia and Suriname.

Accessing and maturing resources is a critical element for future growth. In 2011 we made important progress through project sanctioning and increased oil recovery. For the year we reached a reserve replacement ratio (RRR) at 1.17, the highest number for Statoil in a decade. Moving forward, we have the basis for an average RRR above 100% in the period up to 2020.

At the 10th anniversary of Statoil's public listing last June, we presented our updated strategy as a technology-focused upstream company. Our ambition is to grow production from the current level to above 2.5 million barrels of oil equivalent per day in 2020. During 2011, we have made good progress and made this ambition more robust.

Portfolio management to enhance value creation is an important part of our strategy, and in recent years we have been more active. Last year, we acquired Brigham Exploration Company, farmed down three and exited five assets on the NCS, increased our ownership share at Snøhvit, and reduced our share in Gassled. Portfolio management added around 500 million barrels of new resources in 2011. This is considerably more than we divested, strengthening the foundation for long-term growth.

As we see, the gas markets in continental Europe are changing towards a more traded gas market. Statoil is an excellent position to leverage our strengths in a changing market; we have huge gas reserves, a very competitive cost position, flexible assets and access to an integrated transportation system. We have also built strong gas market and commercial competence.

Over the last years, we have seen a rapid development of unconventional resources in the US. Statoil is part of this development and we have a balanced portfolio and attractive positions in some of the best plays. In the US, the gas market is going through a turbulent period. Prices are at a low level and, as a consequence, industrial activity is reduced in the dry gas area.


The United Nations has designated 2012 as the International Year of Sustainable Energy for All. This is an initiative we in Statoil support. The world is faced with the challenge of striking a balance between continued growing energy demand, and the need for reduced carbon emissions. These challenges cannot be solved without the oil and gas industry as part of the solution.

In Statoil, the way we work is as important as the results we achieve. Therefore our sustainability reporting is fully integrated in our annual report, reflecting our commitment to long-term, sustainable growth in line with the principles of the UN Global Compact.

Our Annual Report presentation this year focuses on the expectations expressed by our stakeholders - and the ways in which we are responding to these challenges.

I invite you to explore the debate.