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Statoil Management Discusses Q1 2012 Results - Earnings Call Transcript

And finally we are maturing our project portfolio. We signed the pre-unitization agreement on the Johan Sverdrup and that means that we are operator up to the PDO approval. We started production on Marulk where Eni is the operator and Marulk is connected to the Norne FPSO.

We also put together or put a subsea tieback project Smorbukk North-East in production, that’s only 30 months after discovery. That’s a satellite to Åsgard B. All PDOs for Skuld and Åsgard Subsea Compression were approved and finally first oil was produced from Caesar Tonga in the Gulf of Mexico that was one month earlier than planned and a great job there by the operator Anadarko. So we are making progress and we will move ahead as planned. So over to production.

In the first quarter, we grew production as expected, 2,193,000 barrels per day. That’s an 11% increase over the first quarter last year. That is important for me to say that this is not more than what we need to deliver in accordance with our guiding. We see growth across the board. We have grown both our oil and gas production and/or production in Norway and internationally. Gas is an important part of the story. We increased our gas production by 16% and this demonstrates the capacity and the flexibility and you know our gas strategy well. We are using our flexibility.

And in the first quarter, we have especially used the flexibility at Oseberg. And the Oseberg is the world’s largest short-cycle storage, as I put it. We can produce Oseberg in 80 days. So we have used the full annual production permit on Oseberg in the first quarter, picking the best prices. So that demonstrates the value of flexibility.

Liquids production has increased by 8% from 2011, and that’s a stable liquid production on the NCS. Then we see increased oil recovery and we see that that is paying off. On the Statoil fields, we now have a recovery more than 50% across the Norwegian continental shelf. In other regions, people expect around 35%, and 1% increase means actually 300 million more barrels of recoverable oil.

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