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Statoil's CEO Discusses Q4 2011 Results - Earnings Call Transcript

Since I came to Statoil back in 2004, you have constantly and I think rightly so challenged the company on the reserve replacement ratio. And this is an important measure in determining the long-term growth prospects of the company. However, to address this, this is not the short-term, a quick fix.

It’s something that you have to systematically attack by building the resource base, by maturing resources and finally, to execute the projects in an efficient way. And I think it’s fair to say that as far as I see it in 2011, we turned the corner. And we saw the results of the effort that the organization has done over many, many years.

Just to give you some flavor to this, we have sanctioned more than 50 projects in Statoil since 2007, 28 of these at the Norwegian continental shelf. We have 24 projects on stream, 10 of this at the Norwegian continental shelf. And also, IOR has contributed significantly to add to the reserve base this year and is an important contributor to the positive development that we see in 2011.

On top of that, we have done both acquisitions and divestments. And Eagle Ford and Bakken is also contributing to the good numbers. I’m therefore pleased with the reserve replacement ratio of 117% but perhaps even more pleased with the underlying facts. And I’ll give you some more granularity in the sense that the RRR for Norway is also above 100%, for the national part is 177%. And we also have an organic reserve replacement above 100%. And we have an oil reserve replacement ratio of 145%.

We believe now that we have the basis for delivering an RRR above one on average moving forward to 2020. Naturally, it could be some fluctuations from year to year because project sanctions come when they come, but I think this should give you a good guiding on how we would perform moving forward.

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