Three principal duties have been assigned to Petoro by the Ministry of Petroleum and Energy: management of the state’s participatory interests in the joint ventures where the state has such interests at any given time, monitoring Statoil’s marketing and sale of the petroleum produced from the SDFI, pursuant to the marketing and sale instruction issued to Statoil, and financial management, including preparation of budgets and keeping of accounts, for the SDFI.
Key elements in creating and securing value for the state is achieving optimum recovery of resources within each licence, and ensuring that the government obtains its rightful share of this value. Petoro does this through active participation in priority licences and in every phase from exploration to development and operation.
Operations in a licence – which contains a producing field, for example – are run through a committee structure. This comprises a management committee, with technical and financial/commercial sub-committees. Technical and commercial matters are dealt with in the sub-committees, and the conclusions submitted to the management committee.
The latter has an important job to do in addressing forward-looking and strategic issues through long-term budgets and work programmes. Adopted on 1 January 2007, a general agreement on licence governance provides good guidance on the way work and decisions in these partnerships should be pursued. Petoro played a leading role in work on establishing this accord, which has given the licensees (partners) greater influence.
Responsibility for day-to-day operations rests with the operator, who ensures that the decisions taken are implemented.
The relationship between management committee and operator has similarities with that between the board of directors and executive management in a company. However, the partners in a licence do considerably more independent technical and financial work on and assessments of issues under consideration in the management committee than is normally done by a company’s non-executive directors.
Petoro is responsible for the SDFI in a large number of production licences, which collectively represent a third of Norway’s oil and gas reserves. The company’s attention is concentrated on the partnerships which represent the biggest value-creation potential, and where it can exert the greatest influence.
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