Main tasks

The cash flow from SDFI is transferred in its entirety to the Norwegian State.

Petoro has been assigned three main tasks by the Ministry of Petroleum and Energy:
 
  • Manage the State’s direct participating interests in the joint ventures where the State is represented at any given time.
  • Monitor Equinor’s marketing of the petroleum that is produced from the State’s direct participating interests in line with the marketing instructions given by the Ministry of Petroleum and Energy to Equinor.
  • Financial management, including keeping accounts for the State’s direct participating interests.

Manage

A key part of creating and securing values for the State is to achieve optimal recovery of the resources in each individual production licence, to increase the values, and to ensure that the State is assigned its rightful share of production, revenues and costs. Petoro accomplishes this through active participation in the production licences through all phases from exploration to development and operation.
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Photographer: Øyvind Hagen - Statoil
Activity in the respective licences is governed through a committee structure with a management committee composed of the participating companies, and with underlying technical and financial/commercial committees. Technical and commercial issues are thoroughly prepared in the sub-committees, and then submitted to the management committee.

The framework for the work carried out in a licence is a formal joint operating agreement between the licensees who establish a joint venture. The joint operating agreements that apply on the Norwegian shelf are standardised and govern how the work shall be carried out. The operator is responsible for daily operation and ensures decisions are implemented.
The relationship between the management committee and the operator has similarities with the relationship between a board of directors and the management in a company. However, the partners in a joint venture carry out substantially more independent technical and financial work and assessments of matters that are processed in the management committee, as compared with what a director on a board would normally do

Monitor

The State, as majority shareholder in Equinor and sole owner of Petoro/SDFI, exercises a joint ownership strategy through the marketing instructions. The marketing instructions are issued by the Ministry of Petroleum and Energy to Statoil ASA, now Equinor. According to these instructions, Equinor shall handle sale of the State’s petroleum along with Equinor’s own petroleum. The objective of the marketing instructions is to achieve the highest possible overall value for Equinor’s and the State’s petroleum and to ensure rightful distribution of the income.
Petoro shall ensure that Equinor carries out the marketing of the State’s petroleum together with its own in accordance with the marketing instructions, including contributing to a rightful distribution of income and costs. In this work, Petoro focuses on marketing strategy and risk management, in addition to assessment of individual issues of significant value, as well as issues of a principle and incentive character.
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(Illustrasjon: Gassco)

Financial management

The SDFI shares are managed by Petoro for the State’s risk and account. Petoro’s task is linked to financial management of the SDFI portfolio, which includes the State’s ownership interests. This entails preparation of accounts for SDFI, budget follow-up, forecasts and audit activities.

The SDFI accounts are prepared in accordance with Norwegian accounting legislation and the State’s cash basis. Petoro’s management of the portfolio is subject to the regulations that apply for financial management in the State.