SDFI - Notes
Note 1 - Asset transfers and changes
Eighteen production licences with SDFI participation were awarded in 2012. Fourteen of these were formally awarded by the Ministry of Petroleum and Energy on 17 January 2012 in connection with the awards in predefined areas (APA) for 2011. In addition, four licences were carved out of existing licences with SDFI participation. Seven licences were relinquished in 2012.
As a result of claims being upheld by the sliding scale decision and the arbitration judgement, the holding in the Heidrun Unit changed from 57.40288 per cent to 57.79339 per cent.
Note 2 - Specification of fixed assets
Tangible fixed assets for the Snøhvit field include a capitalised long-term financial charter for three ships used for LNG transport from the field. These vessels will be depreciated over 20 years, which is the duration of the charter.
Intangible assets of NOK 649 million relate mainly to rights in the gas storage facility at Aldbrough, which began commercial operation in 2009. The whole facility with nine storage caverns is now operational. Total capacity for the SDFI and Statoil is 100 million scm, of which the SDFI’s share is 48.3 per cent. The amount invested is depreciated on a straight-line basis over the estimated 25-year economic life. On the basis of technical reports concerning lower utilisation of storage capacity and reduced volatility, Statoil wrote down the value of the facility in December 2012. The value of the SDFI’s share has been correspondingly written down in the SDFI accounts for 2012. Investment in further development of the Etzel gas store and a small amount for Åsgard Transport are included in intangible assets.
Financial fixed assets of NOK 1 102 million include the following.
Note 3 - Specification of operating revenue by area
* Includes Gassled.
Other revenue primarily comprises revenue from onward sale of purchased gas.
Note 4 - Specification of operating revenue by product
All crude oil, NGL and condensate from the SDFI are sold to Statoil, and all gas is sold by Statoil at the SDFI’s expense and risk. Virtually all the gas is sold to customers in Europe, and the three largest customers purchase about 30 per cent of the annual volumes under long-term contracts.
Note 5 - Specification of production and other operating expenses by area
* includes Gassled
Other operating expenses primarily comprise the cost of purchasing gas for onward sale.
Note 6 - Inventories
Petroleum products embrace LNG and natural gas. The SDFI does not hold inventories of crude oil, which is sold in its entirety to Statoil.
Note 7 - Interest (appropriation accounts only)
Interest on the government’s fixed capital is recorded in the accounts compiled on a cash basis. The amount of interest is calculated as specified in Proposition no 1 Appendix no 7 (1993-94) to the Storting (the Finance Bill) and in item 5.7 in the 2012 Letter of Award to Petoro AS from the Ministry of Petroleum and Energy.
Interest on the government’s fixed capital is charged to operations in order to take account of capital costs and to provide a more accurate picture of resource use. This is a calculated cost without a cash flow effect.
The accounts compiled on a cash basis include an open account with the government for the difference between recording by chapter/item in the appropriation accounts and liquidity movements.
Interest on the open account with the government is calculated as specified in item 5.6 in the 2012 Letter of Award to Petoro AS from the Ministry of Petroleum and Energy. The interest rate applied is related to the interest on short-term government securities and corresponds to the rate for short-term Treasury bills calculated on the basis of the average monthly balance in the open account with the government.
Note 8 - Net financial items
Note 9 - Close associates
The government, represented by the Ministry of Petroleum and Energy, owns 67 per cent of Statoil and 100 per cent of Gassco. These companies are classified as close associates of the SDFI.
Statoil is the buyer of the government’s oil, condensate and NGL. Sales of oil, condensate and NGL to Statoil totalled NOK 96.6 billion (corresponding to 158 million boe) for 2012 and NOK 95.5 billion (161 million boe) for 2011.
Statoil markets and sells the government’s natural gas at the government’s expense and risk, but in Statoil’s name and together with its own production. The government receives the market value for these sales. The government sold dry gas directly to Statoil to a value of NOK 407 million in 2012, compared with NOK 441 million in 2011. Statoil is reimbursed by the government for its relative share of costs associated with the transport, storage and processing of dry gas, the purchase of dry gas for onward sale and
administrative expenses relating to gas sales. These reimbursements amounted to NOK 19.5 billion in 2012 and NOK 18.7 billion in 2011. Open accounts with Statoil totalled NOK 8.4 billion in favour of the SDFI, converted at the exchange rate prevailing at 31
December, compared with NOK 10.7 billion in 2011.
Pursuant to the marketing and sale instruction, the SDFI also participates with a financial interest in Statoil Natural Gas LLC (SNG) in the USA. NOK 1.3 billion in cash flows from SNG at 30 September 2012 were settled and transferred to the SDFI in 2012. The outstanding cash flow earned for the fourth quarter will be settled in 2013. The investment is recorded in accordance with the equity method, and is covered in more detail in note 11.
Open accounts and transactions relating to activities in the production licences are not included in the above-mentioned amounts. Hence, no information has been included with regard to open accounts and transactions relating to licence activities with Statoil and Gassco. The SDFI participates as a partner in production licences on the NCS. These are accounted for in accordance with the proportionate consolidation method.
Note 10 - Trade debtors
A minor loss of NOK 4.9 million on the SDFI’s share of debtors from trading in the UK under the marketing and sale instruction was identified and expensed during the year.
Trade debtors and other debtors are otherwise recorded at face value.