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Statoil ASA's Management Hosts Exploration Seminar (Transcript)

I think I can safely say that we have delivered on our exploration strategy. And our exploration strategy is really quite simple is about three things, is about early access at scale, is about drilling more high-impact wells, and it’s about exploiting our core positions. Early access at scale is the kind it says itself, but it’s really enabling larger acreage uptake at lower cost. Yes, maybe some more risk, but at the same time also potentially more reward, and ideally if you get in early, you should be able to do this at lower cost, although as you are probably aware, there is a huge and maybe ever increasing global competition for exploration acreage.

And then high-impact wells, when we did our strategy work in 2009, we kind of concluded that sort of we weren’t making very many high-impact discoveries if any over the last few years. When we started digging into this, we said well, it wasn’t really surprising, because we weren’t drilling hardly any high-impact wells either. And these are normally somewhat higher risk. You don’t find high-impact or don’t make high-impact discoveries on every other well. I guess, we have the last 18 months, but that’s not normal. The chance of success here is more likely to be one in five or one in six and it doesn’t mean if you drill five, you make one discovery or if you drill six, you make discovery, sometimes, you have to drill 10 or more in order to do that.

And of course the reason we do this is to find higher volumes, but also to be exposed for the outlays, the ones with the really high potential. And if we think back over the last year what kind of surprises that we had? And I think the one big, big positive surprise for everyone was onsite. It was off-scale compared to what we expect and what anyone else expected. It was a much, much better reservoir than we thought everything was better. So, but – if you don’t take that kind of risk and you don’t get exposed for that kind of upside, Pao is really the same. It’s really the same, better reservoir quality and much larger hydrocarbon column than we envisaged and in fact a more favorable oil type even though associated with gas than we are there to envisage. And then the third point about exploiting core positions and on our total year before, this is all about maintaining or establishing robust portfolios in highly prolific oil and gas basins. Norway is obviously one of those. The Gulf of Mexico is obviously another. And I think we can safely say that we recognized from before that Angola is and Brazil I hadn’t added to the list, but I think I could probably add Brazil as a core exploration position for us to the fore which are noted here and Canada is, I guess, is already there, we have made a couple of discoveries and we have established a very significant acreage portfolio here.

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