SDFI AND PETORO ANNUAL REPORT 2012
The Norwegian government has large holdings in oil and gas licences on Norway’s continental shelf (NCS) through the State’s Direct Financial Interest (SDFI). These are managed by Petoro AS. The company’s most important job is to help ensure the highest possible value creation from the SDFI – value which benefits the whole of Norway.
Petoro’s principal job is to maximise the value of the State’s Direct Financial Interest on the Norwegian continental shelf. The number of licence interests it manages has risen from 80 when the company was founded in 2001 to 158 at 31 December 2012.
Kjell Pedersen is retiring on 11 June. From his vantage point at the top of the oil-price roller coaster, he surveys developments on the NCS, in the world market – and at Petoro.
Net income for the portfolio in 2012 came to NOK 150 billion, compared with NOK 133.7 billion the year before. Total operating revenue was NOK 213.9 billion, compared with NOK 188.8 billion in 2011. This yielded a cash flow to the government of NOK 146.9 billion as against NOK 128.1 billion the year before.
Earlier discoveries were confirmed and new finds made in 2012. Petoro worked with Johan Sverdrup while also maintaining its commitment to mature fields. The company became a licensee off Iceland.
Results for health, safety and the environment on facilities in the SDFI portfolio have been improving for a number of years. The serious incident frequency (SIF) per million working hours was 1.3 in 2012.
Managing huge assets makes big demands on corporate governance in Petoro. The company’s management system builds on recognised principles and keeps attention focused on goals and risks.
Petoro undertakes to pursue its business activities in an ethically acceptable, sustainable and responsible manner.
The directors’ report describes financial and operational results for the SDFI. It also presents Petoro’s own contribution to added value, which is in the order of NOK 5-10 billion.
Administration of the portfolio is subject to the accounting regulations for the government. Accounts for the portfolio are presented both on the cash basis used by the government and in accordance with the Norwegian Accounting Act.
The company maintains separate accounts for all transactions relating to the participatory interests, so that revenue and expenses for the portfolio are kept apart from operation of the company. Petoro’s operating revenue takes the form of a contribution from the government.