No. 2, 2010
THE GUIDING STAR OF NORWEGIAN OILMEN
Interview with Bengt Lie Hansen, President of Statoil Russia
Today, Statoil is the most important players in the Norwegian oil industry and a power to be reckoned with in the global scale. The company continues to focus on the Norwegian continental shelf, international growth, and active and targeted work to develop effective new energy solutions. Russia is regarded as one of the most important core area for Statoil's international investments.
Q: Mr. Hansen, in 2007, Statoil merged with Norsk Hydro's oil and gas division. In your opinion, how stronger has the company's positions become comparing to other oil and gas majors?
A: The main driver for the merger was international growth. Through the merger we transformed two significant Norwegian-based companies into one strong, competitive international entity. In the international arena the size matters: the merged company got financial, technological and organizational capacity to pursue more and larger projects. A good demonstration of this was the Shtokman agreement which was the first, major agreement signed by the merged company. This was a result of joined forces, a result of our united experience and competence in developing demanding offshore projects in harsh environment.
Today Statoil is a global player to be reckoned with: we have about 30.000 employees working in 40 countries. We produce 1.95 million barrels of oil equipment per day, operate 39 producing oil and gas fields and are the world's largest operator in waters deeper than 100 meters. We are the second largest exporter of gas to Europe after Gazprom and one of the world's largest net sellers of crude oil.
Q: Today Statoil is engaged in prospecting and production in many parts of the world. How important, in your opinion, is the place of Russia in the global strategy of the company?
A: Russia and Norway are strategic partners in the North sharing borders and common waters. Thus we share opportunities and responsibilities for a sustainable development of petroleum resources in the Barents Sea and in the Arctic region in general. Statoil has been working in Russia for more than 20 years and regard Russia as an important core area for its international activities. Our ambition is to work in Russia in the same way as we do in Norway: in a sustainable manner and for a long time.
Q: What is the current contribution of Statoil to the Shtokman project? What Norwegian technical solutions were adopted for the development of this gas field?
A: Statoil brings to the table its vast operational experience from large and complex offshore developments in harsh and cold environment, such as Ormen Lange and Snohvit. These are some of the most demanding industrial projects ever carried out, and we expect that experience accumulated from these giant developments will be highly relevant for the Shtokman development. For example, for the Ormen Lange field we developed a complete subsea production station at a 100 meter water depth tied back to shore for processing with export through the world's longest subsea gas pipeline, and for the Snohvit project we built the world's northernmost LNG plant. Through such references we believe we can make an important contribution to solving the challenges of Shtokman together with our partners Gazprom and Total.
Q: How would you estimate Statoil's prospects for increasing its presence in the Russian upstream and downstream sectors?
A: Statoil has accumulated a considerable experience in Russia. We have been cooperating with Russia on oil and gas for more than 20 years, and we have a long term perspective towards our business in Russia. In addition to participating in the first phase of the Shtokman project, we today produce oil from the Kharyaga field in the Nenets Autonomous Area and operate a retail network in North-West Russia. Statoil is interested in expanding its cooperation with Russian partners, especially when it comes to the Northern regions. With this aim we signed on 5 June 2009 a Memorandum of Understanding with Gazprom on joint hydrocarbon exploration, development and operation in Northern areas.
Q: In December 2009, LUKOIL and Statoil won the tender to develop the West Qurna-2 oil field. What makes this project interesting for Statoil?
A: Entry to Iraq was an important milestone for Statoil giving us a significant position in the Middle East working with one of the world's largest oil fields. Our focus now is on developing the project together with LUKOIL and the Iraqi state partner in a safe, responsible and profitable manner, creating value both for our companies and for Iraq as a nation.
Statoil is happy to partner with LUKOIL on this project. LUKOIL has in depth knowledge about the West Qurna 2 field and have proved them self to be a prudent onshore operator.
Q: Statoil has a 75% share in the joint project with LUKOIL at the Anaran Block (Iran). What are your company's expectations for this project?
A: With reference to the situation in and around Iran, we are attentive. Under the present situation Statoil will not make new investments in Iran, and has therefore stopped its activities at the Anaran block.
Q: Statoil is actively developing green technologies. In your view, what kind of renewable energy would be in most demand in the foreseeable perspective?
A: Today we have access to many different renewable energy sources, but the maturity of the technology developed is at different stages. One of the technologies we believe are most exciting is offshore wind. The offshore wind technology is relatively mature, huge areas are available, there is less area conflicts compared to onshore and there is potential to produce great amounts.
We have already made some significant steps in this field. Last year Statoil started building the 315-MW Sheringham Shoal wind farm off the small town of Sheringham on the UK coast. Together with Statkraft, we are due to invest about $1.8 billion to deliver clean and renewable energy to 220,000 British homes. That will eliminate 500,000 tons of carbon emissions annually compared with burning fossil fuels. To supply so much electricity, 88 wind turbines will be spread over 35 km2 offshore. Standing on piles driven into the seabed, they'll rise 80 meters above the water and their rotors will measure 100 meters from tip to tip.
Statoil has also started trial operation of the world's first full-scale floating wind turbine Hywind off Norway's south-western coast. This involves exploiting expertise and technology we have built up in offshore oil and gas operations to continue developing renewable energy technologies. Our goal is to demonstrate that wind turbines can work on a floating cylindrical base of the kind already used for oil and gas production. If we succeed, wind farms can be placed in waters as deep as 700 metres - currently thought to be impossible.
