Petoro - a driving force on the Norwegian continental shelf

SDFI and Petoro annual report 2013

Directors’ report 2013

Research and development

The oil companies devote some NOK 3 billion per year to petroleum-related research and development (R&D), and the supplies industry spends about NOK 1 billion. Through its interests in production licences, Petoro contributes to R&D through the SDFI meeting its share of these costs, with the funds managed by the respective operators. This amounts to more than NOK 500 million per annum. Petoro does not have the opportunity to initiate its own technology development and research projects.
Qualifying new technological solutions for field application and their efficient implementation on fields represent a major challenge for the oil industry, including on the NCS. Many initiatives on the borderline between technology development and qualification are accordingly financed directly through projects and in day-to-day operation. The costs are carried on the investment budgets of the joint ventures. Qualification of subsea compression on Ormen Lange, Åsgard and Gullfaks, totalling NOK 7-8 billion over a five-year period, is a case in point. Petoro has worked for a number of years to secure faster adoption of technological opportunities and improved roll-out of new technologies in the production licences. 
The company has been a driving force over a number of years for maturing EOR measures. An extensive test with silicate injection was implemented on Snorre in 2013. Although the project was completed during the year, it will take time for a possible response to be measured in the production wells.


Corporate governance

The board gives weight to good governance to ensure that the SDFI portfolio is managed in a way which maximises long-term value creation. Requirements for governance in the public sector are specified in the government’s financial regulations and standards for good corporate governance. The board observes those sections of the Norwegian code of practice for corporate governance regarded as relevant to Petoro’s business and the frameworks established by its form of organisation and ownership. 
The internal audit function conducted a review in 2013 of Petoro’s compliance with the Norwegian code of practice for corporate governance as well as supplementary requirements and best practice. It concluded that the company’s is very compliant with these provisions, and found no significant recommendations/requirements which were not observed and no significant nonconformities with best practice. The management system is tailored to Petoro’s special character, and has been further developed in line with organisational changes during the year. See the separate section in the annual report for further details.
Petoro’s values base and ethics are embedded in its values and guidelines on business ethics