Petoro - a driving force on the Norwegian continental shelf

SDFI and Petoro annual report 2013

SDFI - Notes

Note 1 - Asset transfers and changes

Twenty-five production licences with SDFI participation were awarded in 2013. Seventeen of these were formally awarded by the Ministry of Petroleum and Energy on 15 January 2013 in connection with the awards in predefined areas (APA) for 2012. A further eight licences were formally awarded by the Ministry of Petroleum and Energy on 21 June 2013 in connection with the 22nd licensing round. In addition, four licences were carved out of existing licences with SDFI participation, and SDFI participation was increased in two other licences.

Eight licences were relinquished in 2013. The Fram H-North unit was established, and redeterminations were carried out in the Vega and Ormen Lange units during the year.


 

Note 2 - Specification of fixed assets

All figures in NOK million

Book
value at
31 Dec 12

Correc-tion to opening balance

Historical
cost at
1 Jan 13

Accu-
mulated
depreci-
ation
1 Jan 13

Addition
2013

Impair-
ment
2013

Dispo-
sal
2013

Depreci-
ation
2013

Book
value at
31 Dec 13

Fields under development

3 865

5 985

9 850

0

3 092

0

0

(298)

12 643

Fields in operation

156 134

(5 985)

415 831

(265 682)

22 503

(256)

(33)

(21 391)

150 973

Pipelines and terminals

31 582

0

62 143

(30 561)

2 634

0

0

(1 806)

32 411

Capitalised exploration expenses

4 783

0

4 783

0

2 295

0

(1 322)

0

5 757

Total tangible
fixed assets

196 365

0

492 608

(296 243)

30 524

(256)

(1 354)

(23 495)

201 784

 

 

 

 

 

 

 

 

 

 

Intangible assets

649

0

786

(138)

(8)

0

0

(31)

610

Financial fixed assets

1 102

0

1 102

0

(709)

0

0

0

393

Total fixed assets (NGAAP)

198 116

0

494 496

(296 380)

29 808

(256)

(1 354)

(23 526)

202 787


The correction to the opening balance relates to development projects which had been classified as “fields in production” instead of “fields under development”.

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 610 million relate mainly to rights in the gas storage facility at Aldbrough. 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. Investment in further development of the Etzel gas storage facility and a small amount for Åsgard Transport are included in intangible assets.

Financial fixed assets of NOK 393 million include the following.
  • Capacity rights for regasification of LNG at the Cove Point terminal in the USA, with an associated agreement on the sale of LNG from Snøhvit to Statoil Natural Gas LLC (SNG) in the USA, reclassified with effect from 2009 as a financial fixed asset. This activity is assessed as an investment in an associate and recorded in accordance with the equity method. See also note 11. The SDFI participates in SNG under the marketing and sale instruction with regard to activities related to the marketing and sale of the government’s LNG from Snøhvit. Nothing indicates that a new impairment test is required. Cash flows from the SNG are settled on a monthly basis in connection with the purchase and sale of LNG from 2013.
  • Shareholdings in Norsea Gas AS, with a book value of NOK 3.98 million, and in Norpipe Oil AS.
 

 

Note 3 - Specification of operating revenue by area

     

All figures in NOK million 

2013

2012

Mature oil fields

62 013

61 690

Gas fields/new developments

127 188

142 416

Other infrastructure

2 455

2 548

Net profit agreements

627

1 085

Other revenue

6 466

10 785

Elimination internal sales

(4 441)

(4 640)

Total operating revenue

194 308

213 885

 

 

 


Other revenue primarily comprises revenue from onward sale of purchased gas.

 

Note 4 - Specification of operating revenue by product

     

All figures in NOK million

2013

2012

Crude oil and NGL*

92 614

96 320

Gas

90 441

106 442

Transport and processing revenue 

10 421

9 913

Other revenue

205

124

Net profit agreements

627

1085

Total operating revenue 

194 308

213 885

 

 

 


* Includes condensate.
 
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

     

All figures in NOK million

2013

2012

Production expenses

 

 

Mature oil fields

9 102

8 722

Gas fields/new developments*

7 561

7 003

Other infrastructure

1 599

655

Total production expenses

18 262

16 380

     
Other operating expenses

 

 

Mature oil fields

2 881

2 748

Gas fields/new developments*

10 560

10 332

Other infrastructure

381

-233

Other operating expenses

8 152

10 003

Elimination internal purchases

(4 441)

(4 640)

Total other operating expenses

17 534

18 210

 

 

 

Total production and other operating expenses

35 796

34 590


* Includes Gassled.
 
Other operating expenses primarily comprise the cost of purchasing gas for onward sale. 

 

Note 6 - Inventories

 
     

All figures in NOK million

2013

2012

Petroleum products

2 223

1 460

Spare parts

2 243

2 047

Total inventories

4 466

3 507

 

 

 

Petroleum products include LNG and natural gas. The SDFI does not hold inventories of crude oil, which is sold in its entirety to Statoil.

 

Note 7 - Interest

Not relevant under the Norwegian Accounting Act.

 

Note 8 - Net financial items

     

All figures in NOK million

2013

2012

Interest

50

71

Other financial revenue

41

58

Currency gain

5 474

4 427

Currency loss 

(3 514)

(5 331)

Interest costs

(123)

(74)

Other financial expenses

0

(256)

Interest on decommissioning liability

(1 566)

(1 626)

Net financial items

362

(2 731)

 

 

 


 

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 92.5 billion (corresponding to 153 million boe) for 2013 and NOK 96.6 billion (158 million boe) for 2012. 

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 484 million in 2013, compared with NOK 407 million in 2012. 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 17.4 billion in 2013, compared with NOK 19.5 billion in 2012. Internal LNG cargoes from SNG to Statoil are recorded net from 2013. Open accounts with Statoil totalled NOK 10.2 billion in favour of the SDFI, converted at the exchange rate prevailing at 31 December, compared with NOK 8.4 billion in 2012.

Pursuant to the marketing and sale instruction, the SDFI also participates with a financial interest in Statoil Natural Gas LLC (SNG) in the USA. Cash flows from SNG are settled continuously on a monthly basis in connection with the purchase and sale of LNG from 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

No bad debts were recorded during the year.

Trade debtors and other debtors are otherwise recorded at face value.