FORM 20-F/A

                                                                                 Amendment No. 120-F

(Mark One)

 

DEAR fellow investor,

2017 has been a good year for Statoil, both operationally and financially. We have seen significant positive impacts from the improvements, and have benefitted from an upturn in the oil and gas market. And we have delivered on the sharpened strategy we launched in February 2017. The 2017 net operating income ended positive with USD 13.8 billion, up from close to zero in 2016. Statoil continues to deliver on the improvement ambitions, and demonstrates strong operational performance. A free cash flow[1] of USD 3.1 billion made Statoil cash-flow neutral well below 50 USD per barrel. Strong safety performance is essential to Statoil’s license to operate. The serious incident frequency for 2017 improved compared to 2016, however, it is key to remember that safety results must be delivered every day. The board of directors is working closely with the administration to ensure that forceful safety efforts and continued leadership focus are maintained. We have seen a gradual rebalancing of the oil market and recovering prices. However, we should still be prepared for volatility. Key influencing factors are; geopolitical developments, OPEC policies, US shale response and the price impact of short-term trading activities. For the board of directors, it is essential that Statoil is a robust and resilient company, well equipped for different scenarios. Statoil remains committed to competitive capital distribution. For the fourth quarter 2017 we propose to the annual general meeting (AGM) a dividend of 0.23 USD per share, an increase of 4.5%. This is in line with the dividend policy of increasing the dividend in line with long-term underlying earnings. In addition, Statoil has ended its two-year scrip programme as planned. We also see an emerging scope for share buy-backs, dependent on macro outlook and portfolio developments. However, the near-term priority is to strengthen the balance sheet. Statoil has increased its production guiding while at the same time reducing capital expenditures. The improvements delivered over the last years have materially improved the financial position and competitiveness. This is reflected in operations and the next generation portfolio with a break-even price of 21 USD per barrel. Statoil made 14 discoveries from 28 wells drilled in 2017, and have secured access to attractive new acreage, like in Argentina and Turkey, and strengthened the portfolio with acquisitions like Carcará North, Roncador in Brazil and Martin Linge in Norway.

Statoil is striving to further develop a distinct and competitive portfolio, driven by the strategy always safe, high value, low carbon. Statoil will leverage industrial strengths; operational excellence, world class recovery, leading project delivery, premium market access and digital leader, to develop long-term value on the Norwegian continental shelf, develop new growth options internationally and increase value creation in the marketing and midstream business. The company continues to build a material industrial position in new energy solutions. Within offshore wind Statoil is competitive and well positioned. Statoil is now the operator of three offshore wind farms, and has also entered its first solar project through the acquisitions of a 43.75% share in the Apodi asset in Brazil. Responding to the climate challenge and preparing Statoil for a low carbon future is an integrated part of the strategy. Concrete actions to reduce greenhouse gas emissions in the operations have been implemented, and we are taking further steps to gradually build a more carbon resilient portfolio. The board of directors believes the company is well prepared to deal with the current market situation and has the competence, capacity and leadership capabilities necessary to create new business opportunities and long-term value for our shareholders. After the closing of the year, the board has decided to recommend to the AGM to change the company name from Statoil to Equinor. Our strategy remains firm, and the change is a natural follow up of the strategic development from a focused oil and gas to a broad energy company. The board sees the new name as a continuation of the company’s proud history, and a commitment to value creation also in a low carbon future. I would like to thank all employees for their dedication and commitment to Statoil and our shareholders for their continued investment. Jon Erik Reinhardsen Chair of the board

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[1] See section 5.2 Use and reconciliation of non-GAAP financial measures

Statoil, Annual Report on Form 20-F 20152017    3

2015 Annual Report on Form 20-F

1 Introduction ...................................................................................................................................................................................................................................................................................... 6

1.1 About the report ..................................................................................................................................................................................................................................................................... 6

1.2 Key figures and highlights ................................................................................................................................................................................................................................................... 7

2 Strategy and market overview ................................................................................................................................................................................................................................................. 8

2.1 Statoil’s business environment .......................................................................................................................................................................................................................................... 8

2.1.1 Market overview ............................................................................................................................................................................................................................................................ 8

2.1.2 Oil prices and refining margins ................................................................................................................................................................................................................................. 9

2.1.3 Natural gas prices ....................................................................................................................................................................................................................................................... 10

2.2 Statoil’s corporate strategy ............................................................................................................................................................................................................................................. 10

2.3 Group outlook ....................................................................................................................................................................................................................................................................... 12

3 Business overview ...................................................................................................................................................................................................................................................................... 13

3.1 Our history ............................................................................................................................................................................................................................................................................. 13

3.2 Our business .......................................................................................................................................................................................................................................................................... 13

3.3 Our competitive position .................................................................................................................................................................................................................................................. 14

3.4 Corporate structure ............................................................................................................................................................................................................................................................ 14

3.5 Development and Production Norway (DPN) ........................................................................................................................................................................................................... 16

3.5.1 DPN overview .............................................................................................................................................................................................................................................................. 16

3.5.2 Fields in production on the NCS............................................................................................................................................................................................................................ 17

3.5.2.1 Operations North ............................................................................................................................................................................................................................................... 20

3.5.2.2 Operations Mid-Norway ................................................................................................................................................................................................................................. 20

3.5.2.3 Operations West ............................................................................................................................................................................................................................................... 20

3.5.2.4 Operations South .............................................................................................................................................................................................................................................. 21

3.5.2.5 Partner-operated fields ................................................................................................................................................................................................................................... 22

3.5.3 Exploration on the NCS ............................................................................................................................................................................................................................................ 22

3.5.4 Fields under development on the NCS ............................................................................................................................................................................................................... 23

3.5.5 Decommissioning on the NCS ............................................................................................................................................................................................................................... 24

3.6 Development and Production International (DPI) ................................................................................................................................................................................................... 25

3.6.1 DPI overview ................................................................................................................................................................................................................................................................ 25

3.6.2 International production ........................................................................................................................................................................................................................................... 26

3.6.2.1 North America .................................................................................................................................................................................................................................................... 28

3.6.2.2 South America .................................................................................................................................................................................................................................................... 29

3.6.2.3 Sub-Saharan Africa ........................................................................................................................................................................................................................................... 29

3.6.2.4 North Africa ......................................................................................................................................................................................................................................................... 30

3.6.2.5 Europe and Asia ................................................................................................................................................................................................................................................. 30

3.6.3 International exploration .......................................................................................................................................................................................................................................... 31

3.6.4 Fields under development internationally .......................................................................................................................................................................................................... 33

3.6.4.1 North America .................................................................................................................................................................................................................................................... 33

3.6.4.2 South America .................................................................................................................................................................................................................................................... 34

3.6.4.3 Sub-Saharan Africa ........................................................................................................................................................................................................................................... 34

3.6.4.4 North Africa ......................................................................................................................................................................................................................................................... 34

3.6.4.5 Europe and Asia ................................................................................................................................................................................................................................................. 34

3.7 Marketing, Midstream and Processing (MMP) .......................................................................................................................................................................................................... 36

3.7.1 MMP overview ............................................................................................................................................................................................................................................................. 36

3.7.2 Marketing and Trading ............................................................................................................................................................................................................................................. 37

3.7.2.1 Marketing and trading of gas and LNG ...................................................................................................................................................................................................... 37

3.7.2.2 Marketing and trading of liquids .................................................................................................................................................................................................................. 38

3.7.3 Asset Management .................................................................................................................................................................................................................................................... 38

3.7.3.1 Production plants ............................................................................................................................................................................................................................................... 38

3.7.3.2 Terminals and storage ..................................................................................................................................................................................................................................... 39

3.7.3.3 Pipelines ................................................................................................................................................................................................................................................................ 39

3.7.4 Processing and Manufacturing .............................................................................................................................................................................................................................. 40

3.8 Other Group .......................................................................................................................................................................................................................................................................... 42

3.8.1 New Energy Solutions (NES) .................................................................................................................................................................................................................................. 42

3.8.2 Global Strategy and Business Development (GSB) ........................................................................................................................................................................................ 43

3.8.3 Technology, Projects and Drilling (TPD) ............................................................................................................................................................................................................ 43

3.8.4 Corporate staffs and support functions ............................................................................................................................................................................................................. 44

3.9 Significant subsidiaries ...................................................................................................................................................................................................................................................... 45

3.10 Production volumes and prices .................................................................................................................................................................................................................................... 45

3.10.1 Entitlement production .......................................................................................................................................................................................................................................... 45

3.10.2 Sales prices ................................................................................................................................................................................................................................................................ 47

3.11 Proved oil and gas reserves .......................................................................................................................................................................................................................................... 48

2 Statoil, Annual Report on Form 20-F 2015

3.11.1 Development of reserves...................................................................................................................................................................................................................................... 52

3.11.2 Preparations of reserves estimates ................................................................................................................................................................................................................... 53

3.11.3 Operational statistics ............................................................................................................................................................................................................................................. 53

3.11.4 Delivery commitments ........................................................................................................................................................................................................................................... 55

3.12 Applicable laws and regulations .................................................................................................................................................................................................................................. 55

3.12.1 Norwegian petroleum laws and licensing system ........................................................................................................................................................................................ 55

3.12.2 Gas sales and transportation from the NCS .................................................................................................................................................................................................. 57

3.12.3 The Norwegian State's participation ................................................................................................................................................................................................................ 57

3.12.4 SDFI oil and gas marketing and sale ................................................................................................................................................................................................................. 57

3.12.5 HSE regulation .......................................................................................................................................................................................................................................................... 58

3.12.6 Taxation of Statoil .................................................................................................................................................................................................................................................. 58

3.13 Property, plant and equipment .................................................................................................................................................................................................................................... 60

3.14 Related party transactions ............................................................................................................................................................................................................................................ 60

3.15 Insurance ............................................................................................................................................................................................................................................................................. 60

3.16 People and the group ...................................................................................................................................................................................................................................................... 61

3.16.1 Employees in Statoil ............................................................................................................................................................................................................................................... 61

3.16.2 Equal opportunities ................................................................................................................................................................................................................................................. 62

3.16.3 Unions and representatives ................................................................................................................................................................................................................................. 62

3.17 Safety, security and sustainability .............................................................................................................................................................................................................................. 63

4 Financial review ........................................................................................................................................................................................................................................................................... 65

4.1 Operating and financial review ....................................................................................................................................................................................................................................... 65

4.1.1 Sales volumes .............................................................................................................................................................................................................................................................. 65

4.1.2 Group profit and loss analysis ................................................................................................................................................................................................................................ 66

4.1.3 Segment performance and analysis ..................................................................................................................................................................................................................... 70

4.1.4 DPN profit and loss analysis ................................................................................................................................................................................................................................... 72

4.1.5 DPI profit and loss analysis ..................................................................................................................................................................................................................................... 73

4.1.6 MMP profit and loss analysis .................................................................................................................................................................................................................................. 75

4.1.7 Other operations......................................................................................................................................................................................................................................................... 77

4.2 Liquidity and capital resources ....................................................................................................................................................................................................................................... 78

4.2.1 Review of cash flows ................................................................................................................................................................................................................................................. 78

4.2.2 Financial assets and debt ......................................................................................................................................................................................................................................... 79

4.2.3 Investments .................................................................................................................................................................................................................................................................. 81

4.2.4 Impact of reduced prices ......................................................................................................................................................................................................................................... 82

4.2.5 Principal contractual obligations ........................................................................................................................................................................................................................... 82

4.2.6 Off balance sheet arrangements........................................................................................................................................................................................................................... 83

4.3 Accounting Standards (IFRS) .......................................................................................................................................................................................................................................... 83

4.4 Non-GAAP measures ......................................................................................................................................................................................................................................................... 83

4.4.1 Return on average capital employed (ROACE) ................................................................................................................................................................................................ 83

4.4.2 Net debt to capital employed ratio ...................................................................................................................................................................................................................... 85

5 Risk review ..................................................................................................................................................................................................................................................................................... 86

5.1 Risk factors ............................................................................................................................................................................................................................................................................ 86

5.1.1 Risks related to our business .................................................................................................................................................................................................................................. 86

5.1.2 Legal and regulatory risks ........................................................................................................................................................................................................................................ 92

5.1.3 Risks related to state ownership ........................................................................................................................................................................................................................... 94

5.2 Risk management ................................................................................................................................................................................................................................................................ 95

5.2.1 Managing operational risk ....................................................................................................................................................................................................................................... 95

5.2.2 Managing financial risk ............................................................................................................................................................................................................................................. 95

5.2.3 Disclosures about market risk ................................................................................................................................................................................................................................ 97

5.3 Legal proceedings ............................................................................................................................................................................................................................................................... 97

6 Shareholder information ......................................................................................................................................................................................................................................................... 98

6.1 Dividend policy .................................................................................................................................................................................................................................................................. 100

6.1.1 Dividends .................................................................................................................................................................................................................................................................... 100

6.2 Shares purchased by issuer ........................................................................................................................................................................................................................................... 101

6.2.1 Statoil's share savings plan .................................................................................................................................................................................................................................. 101

6.3 Information and communications ............................................................................................................................................................................................................................... 102

6.3.1 Investor contact ....................................................................................................................................................................................................................................................... 102

6.4 Market and market prices .............................................................................................................................................................................................................................................. 103

6.4.1 Share prices ............................................................................................................................................................................................................................................................... 103

6.4.2 Statoil ADR programme fees .............................................................................................................................................................................................................................. 104

6.5 Taxation ............................................................................................................................................................................................................................................................................... 105

6.6 Exchange controls and limitations .............................................................................................................................................................................................................................. 108

6.7 Exchange rates .................................................................................................................................................................................................................................................................. 109

6.8 Major shareholders .......................................................................................................................................................................................................................................................... 110

7 Corporate governance ........................................................................................................................................................................................................................................................... 112

7.1 Articles of association .................................................................................................................................................................................................................................................... 112

Statoil, Annual Report on Form 20-F 2015 3

7.2 Code of Conduct............................................................................................................................................................................................................................................................... 113

7.3 General meeting of shareholders ................................................................................................................................................................................................................................ 114

7.4 Nomination committee................................................................................................................................................................................................................................................... 115

7.5 Corporate assembly ......................................................................................................................................................................................................................................................... 116

7.6 Board of directors ............................................................................................................................................................................................................................................................. 119

7.6.1 Audit committee ...................................................................................................................................................................................................................................................... 123

7.6.2 Compensation and executive development committee ............................................................................................................................................................................ 124

7.6.3 Safety, sustainability and ethics committee .................................................................................................................................................................................................. 124

7.7 Compliance with NYSE listing rules ........................................................................................................................................................................................................................... 125

7.8 Management ...................................................................................................................................................................................................................................................................... 127

7.9 Compensation to governing bodies ........................................................................................................................................................................................................................... 130

7.10 Share ownership ............................................................................................................................................................................................................................................................ 141

7.11 Independent auditor ..................................................................................................................................................................................................................................................... 141

7.12 Controls and procedures ............................................................................................................................................................................................................................................. 143

8 Consolidated financial statements Statoil ................................................................................................................................................................................................................... 144

8.1 Notes to the Consolidated financial statements ................................................................................................................................................................................................... 149

1 Organisation ...................................................................................................................................................................................................................................................................... 149

2 Significant accounting policies ................................................................................................................................................................................................................................... 149

3 Segments ............................................................................................................................................................................................................................................................................ 158

4 Acquisitions and disposals............................................................................................................................................................................................................................................ 161

5 Financial risk management ........................................................................................................................................................................................................................................... 162

6 Remuneration .................................................................................................................................................................................................................................................................... 165

7 Other expenses ................................................................................................................................................................................................................................................................ 166

8 Financial items .................................................................................................................................................................................................................................................................. 167

9 Income taxes ..................................................................................................................................................................................................................................................................... 168

10 Earnings per share ........................................................................................................................................................................................................................................................ 170

11 Property, plant and equipment ................................................................................................................................................................................................................................ 170

12 Intangible assets ........................................................................................................................................................................................................................................................... 173

13 Financial investments and non-current prepayments ..................................................................................................................................................................................... 175

14 Inventories ...................................................................................................................................................................................................................................................................... 175

15 Trade and other receivables ..................................................................................................................................................................................................................................... 176

16 Cash and cash equivalents ........................................................................................................................................................................................................................................ 176

17 Shareholders' equity .................................................................................................................................................................................................................................................... 176

18 Finance debt ................................................................................................................................................................................................................................................................... 177

19 Pensions ........................................................................................................................................................................................................................................................................... 178

20 Provisions ........................................................................................................................................................................................................................................................................ 182

21 Trade and other payables .......................................................................................................................................................................................................................................... 183

22 Leases ............................................................................................................................................................................................................................................................................... 184

23 Other commitments, contingent liabilities and contingent assets ............................................................................................................................................................. 184

24 Related parties ............................................................................................................................................................................................................................................................... 186

25 Financial instruments: fair value measurement and sensitivity analysis of market risk ...................................................................................................................... 187

26 Condensed consolidated financial information related to guaranteed debt securities ....................................................................................................................... 191

27 Supplementary oil and gas information (unaudited) ....................................................................................................................................................................................... 196

28 Subsequent events ....................................................................................................................................................................................................................................................... 206

8.2 Report of Independent Registered Public Accounting firm ............................................................................................................................................................................... 207

8.2.1 Report of Independent Registered Public Accounting firm ...................................................................................................................................................................... 207

8.2.2 Report of KPMG on Statoil's internal control over financial reporting................................................................................................................................................. 208

9 Terms and definitons ............................................................................................................................................................................................................................................................. 209

10 Forward-looking statements ............................................................................................................................................................................................................................................ 212

11 Signature page ....................................................................................................................................................................................................................................................................... 213

12 Exhibits ...................................................................................................................................................................................................................................................................................... 214

13 Cross reference to Form 20-F......................................................................................................................................................................................................................................... 215

1.2 Key figures and highlights

Statoil publishes financial data in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and as adopted by the European Union (EU).

Key figures

2About the report

This document constitutes the Annual report on Form 20-F in accordance with the US Securities and Exchange Act of 1934 applicable to foreign private issuers, for Statoil ASA for the year ended 31 December 2017. A cross reference to the Form 20-F requirements are set out in section 5.10 in this report. The Annual report on Form 20-F and other related documents are filed with the US Securities and Exchange Commission (the SEC). The Annual report and Form 20-F are filed with the Norwegian Register of company accounts.

The Statoil Annual report and Form 20-F may be downloaded from Statoil’s website at [Statoil.com/annualreport2017]. References to this document or other documents on Statoil’s website are included as an aid to their location and are not incorporated by reference into this document. All SEC filings made available electronically by Statoil may be obtained from the SEC at 100 F Street, N.E., Washington D.CC. 20549, United States or on the SEC’s website at www.sec.gov. 

2.1 Strategy and market overview

Statoil’s business environment

Market overview

In 2017 the world economy delivered the highest growth rate of the past six years. The world’s major economies are growing close to historical trends or above, and the emerging economies are recovering from their economic deceleration in 2016. The US economy is on a strong footing, with GDP growth estimated at 2.2% in 2017. Consumer spending, supported by higher employment, is the main driver of US growth. The Eurozone also showed robust growth estimated at 2.5%, thanks to private consumption and low inflation. In the UK, growth decelerated, with expected GDP growth at 1.8% due to uncertainty around the Brexit process. Chinese GDP growth has been reported at 6.9% in 2017, based on strong government policy stimulus, delivering an improvement in the growth rate for the first time since 2010. The Japanese economy performed relatively well, with an estimated growth rate of 1.8%, driven by a tight labour market, corporate earnings and a conducive external environment. As a notable exception, India at 6.5% growth, delivered below expectations as the economy had to adapt to the Goods and Services Tax and still felt the effects of demonetisation. Reduced inflationary pressure and appreciating currencies in Russia and Brazil have allowed central banks to cut interest rates, contributing to the countries’ economic recovery.

Looking forward, a robust demand picture and solid economic fundamentals should allow the expansion to continue. Among the risks that might affect such growth are geopolitical events and a too-fast monetary policy tightening from the central banks in key economies.

Global oil demand grew by 1.5 mmbbl per day in 2017 and global supply grew by 0.4 mmbbl per day. Decreasing oil prices in the first half of the year triggered both Opec and non-Opec countries to collectively honour their commitments to cut production. This resulted in stock draws and facilitated a gradual rebalancing of the market.

Overall, quarterly average European gas prices are up year-on-year throughout 2017. The first half of 2017 saw a downward trend in gas prices. However, in the second half of 2017, markets strengthened with demand growth in Asia leaving less LNG availability to serve a tight European market.

Oil prices and refining margins

A decreasing oil price in the first half of 2017 was followed by a strong second half with prices moving in an upward trajectory, closing the year at USD 66.5 per barrel. Refinery margins had a solid year fueled by strong demand in most products.

Oil prices
As in the previous two years, high volatility characterised the oil market. The average price for dated Brent crude in 2017 was USD 54.2 per barrel, up USD 10.5 per barrel from 2016. A relatively flat oil price fluctuating around USD 55 per barrel in the first couple of months was followed by a period of high volatility. Lingering worries about oversupply combined with surging output in Libya and Nigeria created a bearish sentiment with dated Brent bottoming out at USD 45 per barrel in late June. However, higher-than-expected demand and moderating global supply during the second half of 2017 put upward pressure on the commodity price. By the end of the third quarter, the price had reached almost USD 57 per barrel. Renewed buying interest in China and falling global stock piles facilitated continued rebalancing of the market throughout the fourth quarter. The upward pressure on the dated Brent oil price was strengthened even further by rising global geopolitical uncertainty, pushing prices to a two-year high of USD 62 per barrel in the first half of November. The Opec meeting in late November concluded with an agreement to extend oil supply cuts throughout 2018, with an option to review the deal in June. This gave support to the oil price through the last month of the year. Dated Brent was USD 66.5 per barrel on 31 December 2017. The futures market for Brent at the International Exchange Rate (ICE) was in contango until September before it shifted to backwardation and remained so for the rest of the year.

Over the course of 2017, global geopolitical unrest has been on the rise and received more attention as the market has become tighter.

US shale oil production has increased throughout 2017 due to continued productivity gains and cost reductions. The US is now delivering about 5 mmbbl per day of shale oil, with the Permian and Eagle Ford shale oil basins accounting for about two-thirds of the volumes. US crude oil exporters started to move cargoes toward high-growth markets in Asia as they capitalised on the favorable price differential. Development of Gulf Coast export capacity and crude price differentials are key determinants for future export levels.

Refining margins
Refining margins in Europe were strong in 2017. The moderate stock build in the first quarter of the year was followed by large draws in the next quarter due to strong demand. On the light end side, gasoline margins saw a moderate increase through the first half of the

year. High demand and strong prices for LPG, driven by changes in China’s energy mix, made the petrochemical industry take more naphtha, leaving less of the feedstock for making gasoline, eventually pushing prices. Stock draws in the US and strong demand in Europe supported diesel margins. The major impact of hurricane Harvey caused refining margins to peak by the end of the third quarter. A stronger physical crude oil market towards the end of the year put downward pressure on margins.

Natural gas prices

The upward trend in gas prices seen in the second half of 2016 continued into the first quarter of 2017, before taking a dip in second quarter 2017. The fourth quarter of 2017 experienced a robust price recovery.

TGas prices – Europehe profitability

NBP prices hit a decade low of USD 3 per mmBtu in August 2016, and increased towards an average of USD 5.7 per mmBtu in fourth quarter 2016. The climb continued into January 2017, averaging USD 6.6 per mmBtu, before falling throughout first and second quarter 2017 to USD 4.5 per mmBtu in June. Pipeline supply from the Norwegian Continental Shelf and Russia were at record highs of 117 bcm and 194 bcm respectively in 2017. However, the North-West Europe gas market has since late September 2017 been driven by a bullish combination of continued French nuclear outages, rallying coal prices, low hydro levels in Southern Europe and lower LNG availability in the Atlantic basin. The market tightened further due to the Rough storage shut-in and the new Groningen output ceiling, closing 2017 at USD 7.8 per mmBtu and resulting in an annual average of USD 5.8 per mmBtu.   

Gas prices – North America

The Henry Hub price remained stable throughout 2017, averaging USD 3 per mmBtu for the year. Prices peaked early in the year at USD 3.3 per mmBtu on seasonal uplift, before warmer weather weakened the market. Storage inventories have been consistently lower than levels last year, a main driver as to why prices are up year-on-year. The lack of a significant mid-year cooling related to demand peak left summer prices lower than normal and lower than the spring prices. In fourth quarter 2017, robust production growth has limited upside price risks and put a premium on winter heating loads as the market weighs new pipeline takeaway capacity slowly coming online in the Northeast.  

Global LNG prices

LNG prices in Asia ended 2016 at USD 9 per mmBtu. From here, monthly prices fell throughout first quarter 2017 and stabilised at USD 5.5 per mmBtu in second quarter 2017. The second half of the year experienced robust price recovery to an average of USD 9.4 per mmBtu in fourth quarter 2017, resulting in an annual average of USD 7.1 per mmBtu. Despite new LNG supply from Australia and the US, a marked pick-up in consumption across Asia has affected the market. Increased coal-to-gas switching to curb air pollution was seen in China. In South Korea and Taiwan gas stepped in for reduced nuclear capacity.

Statoil’s corporate strategy

Statoil is an energy company committed to long-term value creation in a low carbon future. Statoil will develop and maximise the value of its unique Norwegian continental shelf (NCS) position, its international oil and gas industrybusiness and its growing new energy business, focusing on safety, value and carbon efficiency. Statoil is a values-based company where empowered people collaborate to shape the future of energy. 

Statoil's top priority in 2017 continued to be to conduct safe, secure and reliable operations with zero harm to people and the environment.

In 2017 Statoil launched its sharpened strategy. Geopolitical shifts, challenges in liquids resource replenishments, market cyclicality, structural changes to costs and increasing momentum towards low carbon implies uncertainty and volatility. To be prepared, Statoil is focusing on building a more resilient, diverse and option-rich portfolio, delivered by an agile organisation that embraces change and empowers its people. To deliver on the sharpened strategy, “always safe, high value, low carbon”, Statoil will continue to build opportunities to optimise its portfolio around the following portfolio areas:

·Norwegian continental shelf – Build on unique position to maximise and develop long-term value

·International oil & gas – Deepen core areas and develop growth options

·New energy solutions – Create a material new industrial position

·Midstream and marketing – Secure premium market access and grow value creation through cycles

The following strategic principles guide Statoil in actively shaping its future portfolio:

·Cash generation capacity at all times – Generating positive cash flows from operations, even at low oil and gas prices, in order to sustain dividend and investment capacity through the economic cycles

·Capex flexibility – Having sufficient flexibility in organic capital expenditure to be able to respond to market downturns and avoid value destructive measures

·Capture value from cycles – Ensuring the ability and capacity to act counter-cyclically to capture value through the cycles

Stakeholder engagement: Statoil engages with stakeholders to secure industrial legitimacy, its social contract, trust and profitability. Statoil proposesstrategic support from stakeholders. This engagement extends to the annual general meeting a scrip dividend from the fourth quarter of 2015. Statoil’s strong financial position provides a firm basis on which to balance capital investmentinternal and dividends to shareholders,external collaboration, partnerships, and other co-operation with suppliers, partners, governments, NGOs and communities in which Statoil expects to grow in line with its long-term earnings.operates.

Last yearGroup outlook

Statoil’s plans address the current business environment while continuing to invest in high-quality projects. Statoil outlined planscontinues to further strengthenreiterate its competitiveness, and is now reinforcing its effortefforts and commitment to deliver on its priorities of high value creation, increased efficiency and competitive shareholder returns. Through Statoil`s flexibility in its investment programme Statoil believes that it is well prepared for potential sustained market volatility and uncertainty.return.

·Organic capital expenditures[4] for 2018 are estimated at around USD 11 billion

·Statoil intends to continue to mature its large portfolio of exploration assets and estimates a total exploration activity level of around USD 1.5 billion for 2018, excluding signature bonuses

·Statoil’s ambition is to further reduce costs and improve efficiency was presented atkeep the capital markets update (CMU) on 6 February 2015. Then,unit of production cost in the company announced that it was targeting annual savingstop quartile of USD 1.7 billion from 2016 (pre-tax) as measured against the cost base of 2013. Having already realised $1.9 billion in savings (pre-tax), Statoil announced a new goal at the CMU on 4 February 2016. The company will step up its efficiency programme by 50% with a goal to realise USD 2.5 billion in annual savings from 2016 (pre-tax), again as measured against the cost base of 2013.peer group

·          The step-up of $0.8 billionFor the period 2017 – 2020, production growth is expected to be dividedaround 3-4% CAGR (Compound Annual Growth Rate)

·Production for 2018 is estimated to be 1-2% above the 2017 level

·Scheduled maintenance activity is estimated to reduce equity production by two-thirds capital expenditures (capex) and one-third operational expenditures (opex).around 30 mboe per day for the full year of 2018

Improvement programmes are Statoil’s response to the industrial challenges characterised by high costs and declining returns. More specifically, the ambition is to realise positive production effects and cost savings to improve Statoil’s financial results and cash-flows.

These forward-looking statements reflect current views about future events and are, by their nature, subject to significant risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. See section 10 Forward-Looking Statements for more information. 

2.1 Statoil’s business environment

2.1.1 Market overview

Global economic GDP growth eased in 2015, to 2.4% from 2.6% in 2014. This largely reflects weakness in non-OECD economies where activity decelerated over the year. Growth in OECD, on the other hand, held up relatively well at around 2%, supporting overall economic growth and energy demand.

The underlying fundamentals of the United States economy remain sound and GDP growth ticked up slightly to 2.5% in 2015 from 2.4% in 2014. GDP growth also accelerated nominally in the Eurozone to 1.5%, supported by low energy prices, reduced fiscal headwinds, more monetary stimulus and a weak euro. UK GDP growth slowed in 2015, but remains decent at 2.4%, whereas Japan barely avoided its fourth recession in five years. Growth in emerging countries slipped to 3.6% in 2015, reflecting both weakness in commodity prices and domestic challenges. Deep recessions have emerged in Brazil and Russia, whilst China continues on an intended path of gradual deceleration and consequent structural reforms. Net commodity importers such as India are doing much better, and India’s GDP growth rate outpaced China’s in 2015.

Several major forces are at play in the global economy and will continue to affect demand, including soft commodity prices and persistently low interest rates, increasingly divergent monetary policies across major economies, and weak world trade. In particular, the sharp decline in oil prices since mid-2014 has supported global economic activity and is expected to continue to do so in 2016.

Global oil demand grew by a healthy 1.6 mmbbl per day in 2015, driven by a colder than normal winter in the US and Northern Europe and the lower prices of crude oil. Demand growth in absolute terms was highest in China, despite 2015 being a challenging year for Chinese stock markets and the Chinese economy in general. Non-Opec producers have proven to be resilient to lower prices and grew production by 1.3 mmbbl per day in 2015 while Opec added 1.1 mmbbl per day to their production, mainly from Saudi Arabia and Iraq. This has postponed the rebalancing between supply and demand and has led to a continued drop in oil prices.

2015 saw moderate growth in gas supply and demand of 1.5%, which is below the growth rates of the previous years. The United States is the main driver behind the growth. Europe experienced a weather-driven increase in demand as compared to 2014. Gas consumption declined in Japan and South Korea due to weak power sector gas demand caused by the (re)start of coal and nuclear power plants. Gas demand growth slowed in China and other emerging markets, with more competitively priced oil products being one contributing factor. In the United States, a

3Business overview2.2 BUSINESS OVERVIEW

3.1 Our historyHistory

O

n 18 September 1972, Statoil was formed in 1972 by a decision of the Norwegian parliament and listed on the stock exchanges in Oslo and New York in 2001.

Statoil was incorporated as a limited liability company under the name Den norske stats oljeselskap AS on 18 September 1972. AsAS. Being a company wholly owned 100% by the Norwegian State, Statoil's initial role was to be the government's commercial instrument in the development of the oil and gas industry in Norway.

In 2001, the company became a public limited company listed on the Oslo and New York stock exchanges, and it changed its name to Statoil ASA.

Statoil has grown Growing in parallel with the Norwegian oil and gas industry, which dates back to the late 1960s. Initially, Statoil’s operations werehave primarily been focused on exploration, development and production of oil and gas on the Norwegian continental shelf (NCS), as a partner..

InDuring the 1970s,1980s, Statoil commenced its own operations, made important discoveries and began oil refining operations, which have been of great importance togrew substantially through the further development of the NCS.

Statoil grew substantially in the 1980s through the development of large fields on the NCS (Statfjord, Gullfaks, Oseberg, Troll and others). Statoil also became a major player in the European gas market by securingentering into large sales contracts for the development and operation of gas transport systems and terminals. During the same decade, Statoil was involved in manufacturing and marketing in Scandinavia and established a comprehensive network of service stations. This line of business was fully divested in 2012.

In 2001, Statoil was listed on the Oslo and New York stock exchanges and became a public limited company under the name Statoil ASA, 67% majority owned by the Norwegian State. Since 2000, our business has grown as a result ofthen, substantial investments both on the NCS and internationally. Our ability to fully realise the potential of the

NCS was strengthened through theinternationally, have grown our business. The merger with Hydro's oil and gas division on 1 October 2007.

In recent years, Statoil has utilised their2007 further strengthened Statoil’s ability to fully realise the potential of the NCS. Enhanced utilisation of expertise to design and manage operations in various environments in order to growhave expanded our upstream activities outside our traditional area of offshore production. This includes the development of heavy oil and shale gas projects.

In 2010, Statoil carried out an initial public offering of Statoil Fuel & Retail ASA on the Oslo Børs, partially divesting projects and reducing our interest in the business relating to service stations. In 2012, all of the remaining shares in Statoil Fuel & Retail ASA were divested.

Statoil also participates in projects that focus on other forms of energy, such asespecially on offshore wind, but also on solar and carbon capture and storage, in anticipationstorage.

The board of directors of Statoil have proposed to change the name of the needcompany to expandEquinor. The new name supports the company’s strategy and development as a broad energy production, strengthen energy security and combat adverse climate change.company.  The suggested name change will be proposed to the shareholders in a resolution to the annual general meeting on 15 May 2018.

3.2 Our businessActivities

Statoil is a technology-drivenan international energy company primarily engaged in oil and gas exploration and production activities.

Statoil ASA is a public limited liability companyactivities, organised under the laws of Norway and subject to the provisions of the Norwegian Public Limited Liability Companies Act. The Norwegian State is the largest shareholder in Statoil ASA, with a direct ownership interest of 67%.

Statoil's head office is located in Stavanger, Norway. Statoil has business operations in more than 30 countries and employs about 21,600 employees worldwide.

Statoil isIn addition to being the leading operator on the Norwegian continental shelf (NCS) andNCS, Statoil has also has substantial international activities. Statoilactivities and is present in several of the most important oil and gas provinces in the world. In 2015, 37% of Statoil's equity production came from internationalOur activities span operations in more than 30 countries and the company also holds operatorships internationally.employs 20,245 employees worldwide.

Our access to crude oil in the form of equity, governmental and third partythird-party volumes makes Statoil a large netseller of crude oil, seller, and Statoil is the second-largest supplier of natural gas to the European market. Processing, and refining, are also part of our operations. Statoil is also participating in projects that focus on other forms of energy, such as offshore wind and carbon capture and storage in anticipationis also part of the need to expand energy production, strengthen energy security and combat adverse climate change.our operations.

Statoil's business addressStatoil’s registered office is at Forusbeen 50, N-40354035 Stavanger, Norway. ItsNorway and the telephone number of its registered office is +47 51 99 00 00.

production effects and capexcapital expenditures and operating costcosts savings to improve financial results and cash-flows. In 2017, Statoil realised efficiency improvements of USD 1.3 billion on top of the already achieved USD 3.2 billon since 2013.

3.4 Corporate structure

Establishment of Digital Centre of Excellence

In 2017 Statoil accelerated the digitalisation efforts by establishing a Digital Centre of Excellence and launching a digital road map. The goal is to significantly increase our utilisation of data, sophisticated analytics and robotics. In addition, Statoil aims to improve safety, reduce our carbon footprint and increase profitability. Statoil see potential by utilising data across IT applications and organisational boundaries. Combining data and learning across Statoil’s disciplines could provide a better basis for decision-making, new business opportunities, and increased collaboration externally with our partners, suppliers and other lines of business.

CORPORATE STRUCTURE

Business areas

Statoil's operations are managed through the following eight business areas:

Development and & Production Norway (DPN)

DPN comprises ourmanages Statoil’s upstream activities on the Norwegian continental shelf (NCS). DPN aimsNCS and explores for and extracts crude oil, natural gas and natural gas liquids. The business area’s ambition is to continue itsStatoil’s leading roleposition on the NCS and ensure maximum value creation on the NCS. Through excellentthrough continuously improved HSE and improved operational performance and cost, DPN strives to maintain and strengthen Statoil's position as a world- leading operator of producing offshore fields. DPN seeks to open new acreage and to mature improved oil recovery and exploration prospects. New and existing fields are primarily developed using an industrial approach, in which speed of delivery and cost improvements through standardisation and repeated use of proved solutions are key elements.performance.

Development and& Production International (DPI)

DPI comprises ourmanages Statoil’s worldwide upstream activities that are not included inexcluding the DPN and Development and& Production USA (DPUSA) business areas. It explores for and extracts crude oil, natural gas and natural gas liquids. DPI's ambition is to build a large and profitable international production portfolio comprising activities ranging from accessing new opportunities to delivering on existing projects and managing a production portfolio. DPI endeavours to ensure the delivery of profitable projects in a range of complex technical and stakeholder environments, and it manages a broad non-operated production portfolio that will be complemented with operated positions.environments.

Development and& Production United StatesUSA (DPUSA)

DPUSA comprises ourmanages Statoil’s upstream activities in the USA and Mexico. DPUSA's ambition is to develop a material and profitable position in the US and Mexico, including the deep waterdeep-water regions of the Gulf of Mexico and unconventional oil and gas in the US. In this connection, Statoil aims to further strengthen its capabilities in deep water and unconventional oil and gas operations.

Marketing, Midstream and& Processing (MMP)

MMP comprises ourmanages Statoil’s marketing and trading ofactivities related to oil products and natural gas, transportation, processing and manufacturing, and the development of oil and gas value chains. MMP's ambition isgas. MMP seeks to maximise value creation in Statoil's midstream marketing and renewable energymarketing business.

Technology, Projects and& Drilling (TPD)

Statoil reports its business in the following reporting segments: Development and

·E&P Norway reporting segment – Exploration & Production Norway (DPN); Development and– the DPN business area

·E&P International reporting segment – Exploration & Production International,

(DPI), which combines the DPI and the DPUSA business areas;areas

·MMP reporting segment - Marketing, Midstream and& Processing (MMP); and Other.– the MMP business area

The ·Other reporting segment– which includes activities in New Energy Solutions (NES), Technology, Projects and Drilling (TPD), Global Strategy and Business Development (GSB)NES, TPD, GSB and Corporate staffs and support functions. functions

Activities relating to the Exploration (EXP)EXP business area are fully allocated to - and presented in - the respective developmentrelevant exploration and production reporting segment. Activities relating to the TPD and GSB business areas are partly allocated to - and presented in - the relevant exploration and production reporting segments.

Presentation

In the following sections in the report, the operations of eachare reported according to the reporting segment are presented.segment. Underlying activities or business clusters are presented according to how the reporting segment organises its operations. The Exploration business area's activities, which include group discoveries andSee note 3 Segments to the appraisal of new exploration resources, are presented as part of the various development and production reporting segments (Development and Production Norway, and Development and Production International).Consolidated financial statements for further details.

As required by the SEC, Statoil prepares its disclosures about oil and gas reserves and certain other supplementary oil and gas disclosures based on geographicalgeographic areas. TheStatoil’s geographical areas are defined by country and continent. Theycontinent and consist of Norway, Eurasia excluding Norway, Africa, US and Americas excluding US.

SEGMENT REPORTING

Internal transactions in oil and gas volumes occur between our reporting segments before being sold in the market. The pricing policy for internal transfers is based on estimated market prices. For further information, see section 2.8 Operational performance under Production volumes and prices.

We eliminate intercompany sales when combining the results of reporting segments. Intercompany sales include transactions recorded in connection with our oil and natural gas production in the E&P Norway and the Americas.E&P International reporting segments, and also in connection with the sale, transportation or refining of our oil and natural gas production in the MMP reporting segment. Certain types of transportation costs are reported in both the MMP and the DPUSA business areas.

The DPN business area produces oil and natural gas which is sold internally to the MMP business area. A large share of the oil produced by the DPI and DPUSA business areas is also sold through the MMP business area. The remaining oil and gas from the DPI and the DPUSA business areas is sold directly in the market. For intercompany sales and purchases, Statoil has established a market-based transfer pricing methodology for the oil and natural gas that meets the requirements for applicable laws and regulations.

In 2017, the average transfer price for natural gas was USD 4.33 per mmbtu. The average transfer price was USD 3.42 per mmbtu in 2016 and USD 5.17 in 2015. For oil sold from DPN to MMP, the transfer price is the applicable market-reflective price minus a cost recovery rate.

SeeThe following table shows certain financial information for the four reporting segments, including intercompany eliminations for each of the years in the three-year period ending 31 December 2017. For additional information, see note 3 Segmentsin to the Consolidated financial statementstatements.for more details.

Key events and portfolio developments in 2015:

·In January 2015, Statoil announced the start-up of production at the Valemon oil and gas field in the North Sea

·Statoil announced production start up on fast track projects at the Oseberg Delta in February, Gullfaks Sør Olje in July and Smørbukk Sør Extension in September

·In November the start up of production at the Edvard Grieg field was announced by Lundin

·The major redevelopment projects Åsgard Subsea compression and two new compressors on the Troll A platform have started up

·A total of seven turnarounds were planned to be performed during 2015. Four turnarounds were carried out, and three turnarounds were deferred from 2015 to 2016 to coordinate with other activities due to reduce production losses and reduce costs

·Plan for Development and Operations (PDO) for the Johan Sverdrup field and Gullfaks Rimfaksdalen Fast track project were approved by the Ministry of Petroleum and Energy (MPE) and the PDO for Oseberg Vestflanken 2 was submitted to the MPE

·An extensive exploration drilling program in 2015 resulted in 21 completed wells, of which 10 were discoveries. A total of 16 wells were Statoil operated

·Statoil has delivered an extensive application for the 23^rd concession round and has been awarded interest in 24 licenses on the NCS in the Awards in Predefined Areas (APA) 2015, 13 of those as operator and 11 as partner

·In December Statoil announced that it farmed down to Repsol a 15% interest in the Gudrun field. Statoil remains as operator and largest equity holder with a 36% interest

The profitability of our industry continues to be challenged. Statoil’s response to the industrial challenge characterised by high costs and declining returns is addressed in the section 2 Strategy and market overview.

3.5.2 Fields in production on the NCS

Statoil’s entitlement production at NCS was about 68% of Statoil’s total entitlement production in 2015.

The following table shows DPN's average daily entitlement production of oil, including NGL and condensates, and natural gas for the years ending 31 December 2015, 2014 and 2013. Field areas are groups of fields operated as a single entity.

The following table shows the NCS productiontables show total revenues by fields and field areas in which Statoil was participating as of 31 December 2015.country.

RESEARCH AND DEVELOPMENT

Statoil is a technology-intensive company and research and development is an integral part of our strategy. Our technology strategy is about prioritising technology for value creation that enables us to achieve growth and access, and sets the direction for technology development and implementation for the future. Our focus is on low cost, low carbon solutions and re-using standardised technologies.

We continuously research, develop and deploy innovative technologies to create opportunities and enhance the value of Statoil’s current and future assets. Statoil’s technology development activities aim to reduce field development, drilling and operating costs, and CO₂ and other greenhouse gas emissions. We utilise a range of tools for the development of new technologies:

·In-house research and development

·Cooperation with academia and research institutes

·Collaborative development projects with our major suppliers

·Project related development as part of our field development activities

·Direct investment in technology start-up companies through our Statoil Technology Invest venture activities

·Invitation to open innovation challenges as part of Statoil Innovate

Research and development expenditures were USD 307 million in 2017, USD 298 million in 2016 and USD 344 million in 2015,

3.5.2.1 Operations North2.3 E&P Norway
– exploration & production NORWAY

The main producing fields in the Operations North area are Snøhvit and Norne.

OVERVIEW

The Norwegian Sea regionExploration & Production Norway (E&P Norway) reporting segment is characterised by petroleum reserves located at water depths between 340responsible for exploration, field development and 380 metres. Inoperations on the Barents Sea the petroleum reserves are located at water depths between 310 and 340 meters. The Gulf Stream keeps the sea free of ice all year round, but winter storms can make surface installations difficult to operate.

Snøhvit was the first field developed in the Barents Sea. It is one of the first major developments using onshore production facilities. All offshore installations are subsea. The natural gas is transported to shore and then processed at our Liquefied Natural Gas (LNG) plant on Melkøya. The LNG are shipped to customers in Europe, Asia, North and South America in tankers. The CO₂ in the feed-gas from Snøhvit and Albatross is removed due to freezing constraints in the process system. To reduce carbon dioxide emissions to the air the removed CO₂ is liquefied, transported through a pipeline, and then injected into a storage reservoir in Snøhvit. The LNG plant has produced according to plan in 2015, with high production efficiency, improved HSE results and enhanced cost efficiency. As of 1 January 2016 responsibility for operation of Snøhvit onshore facilities is transferred from DPN to MMP.

Norne is an oil field in the Norwegian Sea. The field has been developed using a floating production, storage and offloading vessel (FPSO) connected to subsea templates. Alve, Marulk, Urd and Skuld are tie-in fields connected to the Norne FPSO.

3.5.2.2 Operations Mid-Norway

The main producing fields in the Operations Mid-Norway area are Åsgard, Kristin, Tyrihans and Heidrun.

Operation Mid-Norway operates in a mature part of the Norwegian Sea, and is a significant contributor to Statoil’s equity production. Main focus is to capitalise existing fields through profitable realisation of increased oil recovery and successful implementation of new developments. There is still exploration potential in the area and a targeted exploration effort is in execution.

The Åsgard fieldNCS which includes the Åsgard A production and storage ship for oil, the Åsgard B semi-submersible floating production platform for gas, and the Åsgard C storage vessel for condensate. In September 2015 Statoil started the world first subsea gas compressor on Åsgard. The compressor increases the Åsgard recovery rate from 67% to 87% thereby extending the reservoirs’ productive lives. Mikkel and Morvin are tie ins to Åsgard.

Tyrihans is a subsea field with five templates. The well stream of oil and gas is tied back to Kristin for processing. Tyrihans receives seawater injection from Kristin and gas injection from Åsgard B.

Kristin is a gas and condensate field. The Kristin development is the first high-temperature/high-pressure (HTHP) field developed with subsea installations. The pressure and temperature in the reservoir are among the highest of all developed fields on the NCS.

Heidrun is developed with a floating concrete tension leg platform. The oil is transferred to the floating storage unit, Heidrun B, operated from June 2015. 

The Njord field is located inNorth Sea, the Norwegian Sea and the Barents Sea. E&P Norway aims to ensure safe and efficient operations and to maximise the value potential from the NCS. For proved reserves development see Development of reserves in Proved oil and gas reserves in section 2.8 Operational performance.

For 2017, E&P Norway reports NCS production from 38 Statoil operated fields, 10 partner operated fields, and equity accounted production from Lundin Petroleum AB.

Key events and portfolio developments in 2017:

·In March, the decision was made to proceed with the Johan Sverdrup phase 2 development, awarding FEED contracts. Investment decision and submission of Plan for Development and Operation is expected in the second half of 2018

·On 26 March, the Flyndre field has been developedcame on stream with a floating steel platform unit,Maersk Oil UK Ltd as operator

·On 27 March, Statoil submitted the revised Plan for Development and Operation for the Njord A, with both drillingfield, and processing facilities.Plan for Development and Operation for the Bauge field. Both submitted plans were subsequently approved on 20 June 2017

·On 15 April, the Norwegian authorities approved the Plan for Development and Operation of the Trestakk discovery on the Halten Bank in the Norwegian Sea

·On 30 June, the Gina Krog field went on stream

·On 1 July, Statoil assumed operatorship of the Sigyn field in the North Sea

·In July, Statoil and partners decided to develop the Snefrid Nord gas discovery. The subsea field Hyme iswill be tied back to Njord A.Aasta Hansteen

As a result·On 28 July, the Byrding field came on stream

·In September, Statoil achieved NCS climate target two years ahead of structural integrity issues Njord A was temporarily shut downschedule

·In October, Barents drilling campaign concludes with the Kayak find of commercial size

·In November, opening of the Valemon control room, the first platform in Statoil’s portfolio remotely-controlled from land

·On 27 November, Statoil announced the decision to buy Total’s equity stakes and extensive reinforcement work was completed through a long turnaround periodto assume the operatorships of the Martin Linge field and the Garantiana discovery. The transactions are expected to be finalised in late March 2018

·On 5 December, Statoil submitted the Plan for Development and Operation for the Johan Castberg field in the Barents Sea

·In December, Cat J rigs Askeladden and Askepott preparing arrival at the Gullfaks and Oseberg fields. Drilling is expected to start in early 2018

·On 21 December, Statoil submitted the Plan for Development and Operation of the Snorre Expansion project, increasing the recovery from Sept 2013the Snorre field by close to July 2014. Since July 2014 conditional monitoring and precautionary evacuation200 million barrels

Fields in forecasted bad weather conditions have been applied. In addition there is no drilling activity. production on the NCS

The Project “Njord Future” is established to secure long termtable below shows E&P Norway's average daily entitlement production for both the Njordyears ending 31 December 2017, 2016 and Hyme2015. Production in 2017 increased due to higher flex gas off-take, contributions from new fields and to act as a tie-in host candidate for discoveries in the area.fewer turnarounds.

3.5.2.3 Operations West

The mainfollowing tables show the NCS entitlement production by fields in which Statoil was participating during the year ended 31 December 2017.