Directors’ report 2012
Book assets and equity
The book value of assets totalled NOK 228.5 billion at 31 December 2012. These assets mainly comprise operating facilities related to field installations, pipelines and land-based plants, as well as current debtors.
Equity at 31 December amounted to NOK 155.1 billion. Long-term liabilities totalled NOK 60.4 billion, of which NOK 58.3 billion related primarily to future removal liabilities. These liabilities are calculated in accordance with an established industry standard based on existing technology. Great uncertainty exists both over the removal estimates and over the timing of removals. Current liabilities, which comprise provision for costs incurred but not paid, were NOK 13 billion at 31 December.
Petoro served at 31 December as the licensee for the government’s interests in 158 production licences and 15 joint ventures covering pipelines and terminals, including the interests in Mongstad Terminal DA and Vestprosess DA. It also managed the shares in Norsea Gas AS and Norpipe Oil AS.
Strategy for Petoro
The company’s strategy falls into three parts, and is directed particularly at activities on mature oil fields. These represent large assets in the portfolio, and taking decisions to secure their resources is time-critical. Petoro takes the view that it is important to contribute to ensuring that the mature oil fields receive the necessary attention from other licence partners.
Realise the potential in and close to large mature fields: Petoro’s commitment to realising the potential in large mature fields is directed at extending the producing life of priority installations through the choice of technical solutions, efficient drainage methods and the completion of a larger number of wells per year. Its efforts will help to achieve a time-critical change in the way the fields are operated in coming years. The company is also working for integrated area solutions by prioritising selected installations for use as field centres, and to achieve a timely phasing-in of discoveries.
Integrated and timely development of the gas value chain: The dynamics in and structure of the European gas market have changed significantly in recent years. Major changes have occurred in relation to gas pricing, regulatory frameworks, the competitiveness of gas and its growth potential. What happens in the global and European markets for natural gas in the future, and an understanding of these developments, are crucial for realising the value potential of the SDFI’s gas portfolio.
Continued development of a robust marketing and sale strategy for SDFI gas together with Statoil is a priority job. In accordance with the marketing and sale instruction, Statoil sells the government’s petroleum together with its own petroleum and takes responsibility for marketing and sales. The goal is to achieve the highest possible value for the petroleum belonging to Statoil and the government.
As the largest participant in Gassled, Petoro plays a key role in the gas infrastructure. This role is expected to become more demanding, since production developments and the technical integrity of the facilities will require significant measures related to Gassled’s processing plants in coming years. This has become even more challenging in view of alterations to the owner composition and the risk of changes to the profitability of new investment projects.
Safeguard asset values in new discoveries: To ensure optimum development of the portfolio, Petoro’s commitment to identifying business opportunities in Barents Sea South will have a high priority. On the basis of the Johan Sverdrup discovery, its commitment in this part of the strategy will also be to secure an acceptable development of licensee interests in major North Sea finds.