Petoro - a driving force on the Norwegian continental shelf

SDFI and Petoro annual report 2018
Johan Sverdrup ved Stord Foto: Ørjan Richardsen / Jan Arne Wold / Equinor

Introduction to the enterprise

Petoro AS

Petoro manages the State’s Direct Financial Interest (SDFI). The company’s principal objective is to generate the highest possible financial value from the SDFI portfolio. At the end of the year, the company had 64 employees.

The Ministry of Petroleum and Energy, in the person of the minister, represents the government as sole owner and serves as the company’s general meeting and highest authority. The Board has overall responsibility for administration of the company. Petoro’s organisation is shown in the figure below. The company’s management and Board are presented in more detail in Chapter 4, Management and control in the enterprise.
Petoro%20org%20kart%20-%20m%20navn%20-%20desember%202018-eng

KEY FIGURES FOR Petoro AS

 

 2018

2017

2016
Total appropriation/ administration grant (NOK million)* 280.3 274.1 273.6
Full-time equivalents (average number of full-time equivalents employed) 64.2 64.4 62.7
Payroll share of administration grant (per cent)** 38 39 35
Payroll costs per full-time equivalent (NOK million)** 1.64  1.66 1.55
Share of administration grant for studies and cutting-edge expertise (per cent) 16 15 18

*    excluding VAT
**  payroll as specified in Note 

THE STAT’S DIRECT FINANCIAL INTEREST (SDFI)

The SDFI scheme was established in 1985. Under this arrangement, the state participates as a direct investor in petroleum activities on the Norwegian continental shelf (NCS), so that the state receives revenues and meets expenses associated with SDFI’s ownership interests. Petoro acts as licensee for the state’s participating interests in production licences, fields, pipelines and onshore facilities, and manages this portfolio based on sound business principles. At the end of 2018, the portfolio consisted of 198 production licences, 38 fields, of which 4 in the development phase, and 15 pipelines and terminals, as well as follow-up of 14 production licences with net profit interest agreements.

The SDFI portfolio represents about one-third of Norway’s overall oil and gas reserves and yielded a cash flow of NOK 120 billion in 2018.

KEY FIGURES FOR SDFI

NGAAP

 

 2018

2017

2016
Net cash flow (NOK million) 119 666 87 157 65 897
Operating revenue (NOK million) (NGAAP) 177 431 150 720 121 224
Production costs (NOK million) (NGAAP) 17 440 14 262 14 616
Net profit (NOK million) (NGAAP) 114 210 98 919 57 426
Investments (NOK million) in capital accounts 22 555 26 564 27 815

Production - oil and NGL (thousand bbl/day)

 370

398

 409

Production - dry gas (million Sm3/day)

 113

113

 110

Production - total (thousand boe/day)

 1 084

1 110

 1 040

Remaining reserves (million boe)

 5 544

5 879

 5 968

Reserve replacement rate (annual %)

 16

78

 22

Reserves added (million boe)

 62

316

 82

Oil price (USD/bbl)

 71

54

 43

Oil price (NOK/bbl)

 573

449

 361

Gas price (NOK/Sm3)

 2.17

1.72

 1.62