Statoil Annual Report

This report contains information of performance in areas: income, cash flow, return, proved reserves, oil production and price, gas production and price, serious incidents, total recordable injuries and carbon dioxide emissions.



Statoil prepared this operational review in accordance with the segment (business area) structure it used prior to 1 January 2011.
Each business area is presented individually, and underlying business clusters are included according to how the business area organises its operations.

Contents
Cover Page
1 Introduction
1.1 Key figures
1.2 About the report
1.3 Financial highlights
1.4 A glance at 2010
2 Business overview and strategy
2.1 Our business
2.2 Our history
2.3 Statements on competitive position
2.4 New organisational structure as from January 2011
2.5 Strategy
2.5.1 Business environment
2.5.2 Industry context
2.5.3 A strategy for value creation and growth
2.5.4 DPN strategy
2.5.5 DPI strategy
2.5.6 DPNA strategy
2.5.7 MPR strategy
2.5.8 TPD strategy
2.5.9 EXP strategy
3 Operational review
3.1 E&P Norway
3.1.1 Introduction to E&P Norway
3.1.2 E&P Norway key events in 2010
3.1.3 The NCS portfolio
3.1.3.1 Core production areas
3.1.3.2 Potential producing areas
3.1.3.3 Portfolio management
3.1.4 Exploration on the NCS
3.1.5 Oil and gas reserves on the NCS
3.1.6 Production on the NCS
3.1.7 Development on the NCS
3.1.7.1 Fields under development on the NCS
3.1.7.2 Redevelopments on the NCS
3.1.8 Fields in production on the NCS
3.1.8.1 Operations North Sea
3.1.8.2 Operations West
3.1.8.3 Operations North
3.1.8.4 Partner-operated fields on the NCS
3.1.9 Decommissioning on the NCS
3.2 International E&P
3.2.1 Introduction to International E&P
3.2.2 International E&P key events in 2010
3.2.3 Our International E&P portfolio
3.2.4 International exploration activity
3.2.4.1 North America
3.2.4.1.1 Canada
3.2.4.1.2 The USA
3.2.4.2 Latin America
3.2.4.2.1 Brazil
3.2.4.3 Africa
3.2.4.3.1 Angola
3.2.4.3.2 East Africa
3.2.4.3.3 Egypt
3.2.4.4 Middle East and Asia
3.2.4.4.1 Indonesia
3.2.5 International oil and gas reserves
3.2.6 International production
3.2.7 International fields in development and production
3.2.7.1 North America
3.2.7.1.1 Canada
3.2.7.1.2 USA
3.2.7.2 Latin America
3.2.7.2.1 Brazil
3.2.7.2.2 Venezuela
3.2.7.3 Sub-Saharan Africa
3.2.7.3.1 Angola
3.2.7.3.2 Nigeria
3.2.7.4 North Africa, Europe, Russia and Caspian
3.2.7.4.1 Algeria
3.2.7.4.2 Libya
3.2.7.4.3 United Kingdom
3.2.7.4.4 Ireland
3.2.7.4.5 Azerbaijan
3.2.7.4.6 Russia
3.2.7.5 The Middle East and Asia
3.2.7.5.1 Iraq
3.2.7.5.2 Iran
3.3 Natural Gas
3.3.1 Introduction to Natural Gas
3.3.2 Natural Gas key events in 2010
3.3.3 The gas market
3.3.4 Gas sales and marketing
3.3.5 Norway's gas transport system
3.3.6 Kårstø gas processing plant
3.3.7 Kollsnes gas processing plant
3.3.8 Gas sales agreements
3.4 Manufacturing & Marketing
3.4.1 Introduction to Manufacturing & Marketing
3.4.2 Manufacturing & Marketing key events 2010
3.4.3 Oil Sales, Trading and Supply
3.4.3.1 South Riding Point
3.4.4 Manufacturing
3.4.4.1 Mongstad
3.4.4.2 Kalundborg
3.4.4.3 Tjeldbergodden
3.4.4.4 Sture
3.5 Technology & New Energy
3.5.1 Introduction to Technology & New Energy
3.5.2 Technology & New Energy key events in 2010
3.5.3 Research and development initiatives
3.5.4 New energy
3.5.5 Technology implementation
3.6 Projects & Procurement
3.6.1 Introduction to Projects & Procurement
3.6.2 Projects & Procurement key events in 2010
3.6.3 Project development
3.7 Statoil Fuel & Retail
3.8 People and the group
3.8.1 Employees in Statoil
3.8.2 Equal opportunities
3.8.3 Unions and representatives
3.8.4 Organisational structure
3.9 Production volumes and price information
3.9.1 Entitlement production
3.9.2 Average production cost and sales prices
3.10 Proved oil and gas reserves
3.10.1 Operational statistics
3.10.2 Report of DeGolyer and MacNaughton
3.11 Regulation
3.11.1 The Norwegian licensing system
3.11.2 Gas sales and transportation
3.11.3 The EU Gas Directives
3.11.4 HSE regulation
3.11.5 Taxation of Statoil
3.11.6 The Norwegian State's participation
3.11.7 Marketing and sale of SDFI oil and gas
3.12 Competition
3.13 Property, plants and equipment
3.14 Related party transactions
3.15 Insurance
4 Financial analysis and review
4.1 Operating and financial review 2010
4.1.1 Sales volumes
4.1.2 Group profit and loss analysis
4.1.3 Group outlook
4.1.4 Segment performance and analysis
4.1.5 Exploration & Production Norway
4.1.5.1 Profit and loss analysis
4.1.6 International Exploration & Production
4.1.6.1 Profit and loss analysis
4.1.7 Natural Gas
4.1.7.1 Profit and loss analysis
4.1.8 Manufacturing & Marketing
4.1.8.1 Profit and loss analysis
4.1.9 Statoil Fuel & Retail
4.1.9.1 Profit and loss analysis
4.1.10 Eliminations and other operations
4.1.11 Definitions of reported volumes
4.2 Liquidity and capital resources
4.2.1 Review of cash flows
4.2.2 Selected balance sheet information
4.2.3 Financial assets and liabilities
4.2.4 Principal contractual obligations
4.2.5 Investments
4.2.6 Impact of inflation
4.2.7 Critical accounting judgements
4.2.8 Off balance sheet arrangements
4.3 Non-GAAP measures
4.3.1 Return on average capital employed (ROACE)
4.3.2 Unit of production cost
4.3.3 Net debt to capital employed ratio
4.4 Accounting Standards (IFRS)
5 Risk review
5.1 Risk factors
5.1.1 Risks related to our business
5.1.2 Risks related to increased regulation and regulatory compliance
5.1.3 Risks related to ownership by the principal shareholder and its involvement in the SDFI
5.2 Risk management
5.2.1 Managing financial risk
5.2.2 Disclosures about market risk
5.3 Legal proceedings
6 Shareholder information
6.1 Dividend policy
6.1.1 Dividends
6.2 Equity securities purchased by issuer
6.2.1 Statoil's share savings plan
6.3 Information and communications
6.3.1 Investor contact
6.4 Market and market prices
6.4.1 Share prices
6.4.2 Fees related to Statoil's ADR program
6.5 Taxation
6.6 Exchange controls and other limitations
6.7 Exchange rates
6.8 Major shareholders
7 Corporate governance
7.1 Articles of association
7.2 Ethics Code of Conduct
7.3 General meeting of shareholders
7.4 Nomination committee
7.5 Corporate assembly
7.6 Board of directors
7.6.1 Audit committee
7.6.1.1 Audit committee financial expert
7.6.2 Compensation committee
7.6.3 HSE and Ethics Committee
7.7 Compliance with NYSE listing rules
7.8 Management
7.9 Compensation paid to governing bodies
7.10 Share ownership
7.11 Independent auditor
7.12 Controls and procedures
8 Consolidated financial statements
8.1 Notes to the Consolidated Financial Statements
8.1.1 Organisation
8.1.2 Significant accounting policies
8.1.3 Segments
8.1.4 Assets classified as held for sale
8.1.5 Business combinations
8.1.6 Asset acquisitions and disposals
8.1.7 Capital management
8.1.8 Financial risk management
8.1.9 Remuneration
8.1.10 Other expenses
8.1.11 Financial items
8.1.12 Income taxes
8.1.13 Earnings per share
8.1.14 Property, plant and equipment
8.1.15 Intangible assets
8.1.16 Equity accounted investments
8.1.17 Non-current financial assets
8.1.18 Inventories
8.1.19 Trade and other receivables
8.1.20 Current financial investments
8.1.21 Cash and cash equivalents
8.1.22 Transactions impacting shareholders equity
8.1.23 Non-current financial liabilities
8.1.24 Pensions and other non-current employee benefits
8.1.25 Asset retirement obligations, other provisions and other liabilities
8.1.26 Trade and other payables
8.1.27 Current financial liabilities
8.1.28 Leases
8.1.29 Other commitments and contingencies
8.1.30 Related parties
8.1.31 Financial instruments by category
8.1.32 Financial instruments: fair value measurement and sensitivity analysis of market risk
8.1.33 Subsequent events
8.1.34 Condensed consolidating financial information related to guaranteed debt securities issued by parent company
8.1.35 Supplementary oil and gas information (unaudited)
8.2 Report of independent registered public accounting firms
8.2.1 Report of Independent Registered Public Accounting firm
8.2.2 Report of Ernst & Young AS on Statoil's internal control over financial reporting
9 Terms and definitions
10 Forward looking statements
11 Signature page
12 Exhibits
13 Cross reference to Form 20-F