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Page 1: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation
Page 2: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

Image: Troll A

Maximizing value across value chainsJens Økland, Executive Vice President, MMP

Page 3: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

FORWARD-LOOKING STATEMENTS

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. There are a number of factors that could cause actual results and developments to differ materially from those

expressed or implied by these forward-looking statements, including levels of industry product supply, demand and

pricing; price and availability of alternative fuels; currency exchange rate and interest rate fluctuations; the political and

economic policies of Norway and other oil-producing countries; EU developments; general economic conditions;

political and social stability and economic growth in relevant areas of the world; global political events and actions,

including war, political hostilities and terrorism; economic sanctions, security breaches; changes or uncertainty in or

non-compliance with laws and governmental regulations; the timing of bringing new fields on stream; an inability to

exploit growth or investment opportunities; material differences from reserves estimates; unsuccessful drilling; an

inability to find and develop reserves; ineffectiveness of crisis management systems; adverse changes in tax regimes;

the development and use of new technology; geological or technical difficulties; operational problems; operator error;

inadequate insurance coverage; the lack of necessary transportation infrastructure when a field is in a remote location

and other transportation problems; the actions of competitors; the actions of field partners; the actions of governments

(including the Norwegian state as majority shareholder); counterparty defaults; natural disasters and adverse weather

conditions, climate change, and other changes to business conditions; an inability to attract and retain personnel;

relevant governmental approvals; industrial actions by workers and other factors discussed elsewhere in this report.

Additional information, including information on factors that may affect Statoil's business, is contained in Statoil's

Annual Report on Form 20-F for the year ended December 31, 2015, filed with the U.S. Securities and Exchange

Commission (and in particular, Section 5.1 thereof (Risk factors)) which can be found on Statoil's website at

www.statoil.com.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot

assure you that our future results, level of activity, performance or achievements will meet these expectations.

Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-

looking statements. Unless we are required by law to update these statements, we will not necessarily update any of

these statements after the date of this report, either to make them conform to actual results or changes in our

expectations.

This presentation contains certain forward-looking statements that involve risks and uncertainties. In some cases, we

use words such as "ambition", "continue", "could", "estimate", "expect", “believe”, "focus", "likely", "may", "outlook",

"plan", "strategy", "will", "guidance" and similar expressions to identify forward-looking statements. All statements

other than statements of historical fact, including, among others, statements regarding plans and expectations with

respect to market outlook and future economic projections and assumptions; Statoil’s focus on c apital discipline;

expected annual organic production through 2017; projections and future impact related to efficiency programmes,

including expectations regarding costs savings from the improvement programme; capital expenditure and exploration

guidance for 2017; production guidance; Statoil’s value over volume strategy; Statoil’s plans with regard to its

completed acquisition of 66% operated interest in the BM-S-8 offshore license in the Santos basin; organic capital

expenditure for 2017; Statoil’s intention to mature its portfolio; exploration and development activities, plans and

expectations, including estimates regarding exploration activity levels; projected unit of production cost; equity

production; planned maintenance and the effects thereof; impact of PSA effects; risks related to Statoil’s production

guidance; accounting decisions and policy judgments and the impact thereof; expected dividend payments, the scrip

dividend programme and the timing thereof; estimated provisions and liabilities; the projected impact or timing of

administrative or governmental rules, standards, decisions, standards or laws, including with respect to the deviation

notice issued by the Norwegian tax authorities and future impact of legal proceedings are forward-looking statements.

You should not place undue reliance on these forward- looking statements. Our actual results could differ materially

from those anticipated in the forward-looking statements for many reasons.

3

Page 4: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

Developing a distinct and competitive portfolio

Norwegian

continental shelfBuild on unique position

• Highly cost competitive

• Attractive project pipeline

• Exploration potential

International

oil & gasDeepen core areas

• Enhance Brazil portfolio

• Flexible US position

• New growth options

Midstream

and marketingAccess premium markets

• Flow assurance

• Asset backed trading

• Capex light

New energy

solutionsIndustrial approach

• Offshore wind focus

• Low-carbon solutions

• Ventures, R&D

US onshore

Kårstø Offshore wind

Always safe,

high value,

low carbon

Johan Sverdrup

4

Page 5: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

1) Marketing, Midstream & Processing (MMP). Before 2015: Marketing, Processing and Renewables (MPR)

2) Before tax

Source: Statoil

1) 2)

MMP

guiding

5

Statoil’s mid- and downstream business demonstrates resilience

Page 6: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

Eirik Wærness

• Macro update

• LNG

• Long-term outlook

Elisabeth Aarrestad

• US gas market

• European gas market

• Asia development

Tor Martin Anfinnsen

• Asset backed trading

• Contract portfolio update

• Focus going forward

Gas markets and Statoil’s positioning

6

Page 7: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

Image: Troll A

Macro update, LNG and long-term outlookEirik Wærness, Senior Vice President and Chief Economist

Page 8: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

Prices are up from the bottom – uncertainty prevails

8 1 Long-term economic planning assumptions. 2016 USD, real prices.

Brent price Gas pricesNew volumes to 2040,

depending on scenario

Source: Platts

0

20

40

60

80

100

120

140

160

200

6

200

9

201

2

201

5

20

20

20

30

7580

Planning

assumptions1

0

1

2

3

4

5

6Oil

Gas

New RES

13 000

TWh

1.8-3.9

Tcm

30-90

Mbd

20

20

20

30

Planning

assumptions1Source: ICIS Heren, NYMEX

4 4

6

8

0

2

4

6

8

10

12

14

200

6

200

9

201

2

201

5

NBP spot

Henry Hub

Source: Statoil Energy Perspectives 2016

US

D/M

MB

tu

US

D/b

bl

Bill

ion t

oe

Important: Substantial need for new investments to satisfy demand

Page 9: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

Trump, Brexit, and energy markets

Politics Macroeconomics New infrastructure, or?

• Considerable uncertainty

• Foreign policy

• Fiscal policy, incl. tax policy

• Trade policy

• Energy policy

• Climate policy

• Impact on risk premiums?

Trump victory

Source: www.collective-evolution.com

Source: www.edition.cnn.com

Source: Thomson Reuters Datastream

0

8

16

24

32

87,5

95,0

102,5

110,0

117,5

Jan-16 May-16 Sep-16 Jan-17

US equities, dollars, and risk(indexed 31 Dec 2015=100, index (rhs))

S&P 500

USD index vs other currencies

VIX (rhs)

9

Political uncertainty, relative economic calm, protectionist policies?

Page 10: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

Globalizing gas – flows according to price signals

Short-run marginal cost ranges for US 2018 LNG supply to Asia and Europe, and prices

Source: NYMEX, ICE, Platts, Pira, Statoil ASA

1) NYMEX Henry Hub Forward curve for Calendar 2018 – 3 Mar 2017

2) ICE NBP Forward curve for Calendar 2018 - 3 Mar 2017

3) Platts JKM (Asia spot LNG) - 3 Mar 2017

JKM Shipping HH Shipping/Regas NBP

Asia USD/MMBtu

Europe USD/MMBtu

North America USD/MMBtu

3.01)

0.5

5.0 - 5.7 4.3 - 4.70.8 - 1.21.5 – 2.2

5.52)

6.03)

10

US LNG currently in the money; prices driven by other factors as well

Page 11: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

European gas positive post Paris

• Gas 50% of total generation in 2016

• Carbon price

• Phase out of coal has started

• Natural gas recovering

• Nuclear phase out in early 20s

• Coal generation is falling

• Gas generation at max in Q4 2016

• Extended nuclear maintenance

• Low hydro levels

UK electricity generation Germany electricity generation France electricity prices

0

100

200

300

400

500

600

700

2010 2012 2014 2016

Nuclear Coal Natural GasHydro Wind SolarOther RES

0

100

200

300

400

2010 2012 2014 2016

Nuclear Coal Natural GasHydro Wind SolarOther RES

€/M

Wh

TW

h/y

TW

h/y

Source: DECC, National Grid, Arbeitsgemeinschaft Energiebilanzen (AGEB), DISTATIS, Argus

10

30

50

70

90

110

130

150

Mar-16 Jun-16 Sep-16 Dec-16

Front Month

Front Quarter

11

Some growth in electricity – gas is flexible and necessary

Page 12: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

Change in oil demand 2013-2040 Change in gas demand 2013-2040

Oil and gas demand growth across sectors + scenarios

10,6

-14,0

23,8

-30

-20

-10

0

10

20

30

Reform Renewal Rivalry

Other Transformation

Electricity & Heat

Non-Energy

Transport

Other Stationary

Residential

Industry

1 229

-9

1 166

-1 500

-1 000

-500

0

500

1 000

1 500

Reform Renewal Rivalry

Source: Statoil Energy Perspectives 2016

Mbd Bcm

12

Transport and electricity are keys – significant growth in non-energy demand

Page 13: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

0

200

400

600

800

1000

1200

1400

1600

2015 2020 2025 2030 2035 2040

Probable DevelopmentUnder DevelopmentOnstreamEP16 Demand Range

Asia/Oceania OECD America OECD Europe

0

200

400

600

800

1000

1200

1400

1600

2015 2020 2025 2030 2035 2040

Probable DevelopmentUnder DevelopmentOnstreamEP16 Demand Range

0

200

400

600

800

1000

1200

1400

1600

2015 2020 2025 2030 2035 2040

Probable DevelopmentUnder DevelopmentNCS OnstreamOnstreamEP16 Demand Range

Gas supply/demand balances vary and call for trade

Source: Wood Mackenzie Upstream data tool and Statoil

Bcm Bcm Bcm

13

Growing demand gap in Asia and Europe, in all scenarios

Page 14: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

Concluding remarks

14

• Substantial need for new investments to satisfy demand

• Globalizing gas – flows according to price signals

• Oil and gas demand growth across sectors – transport and electricity are key

Page 15: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

US and European gas marketsElisabeth Aarrestad, Vice President Market Analysis

Image: Troll A

Page 16: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

• Gas gaining market share due to

low cost

• Gas outpacing coal for the first time

in 2016

Gas vs coal generation

US demand factors

0

150

300

450

600

750

2013 2015 F2017 F2020

Res'l & Com'l Ind'l Power

0%

10%

20%

30%

40%

50%

60%

70%

0

50

100

150

200

250

300

350

Jan-14 Jan-15 Jan-16

TWh

Gas Share, %

Gas

Coal

0

5

10

15

20

2013 2014 2015 2016 2017

GW Bcm

• Retirement of coal large factor, but

slowing

• 1 GW corresponds to 1.7 Bcm gas

input

Coal retirements

• Recent growth in gas to power

• Industrial demand is rising

• Heating segment is steady

Domestic demand

Source: EIA, IHS, Statoil16

Gas outpacing coal in power and growing in industry

Page 17: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

• Technology development and

efficiency

• Vast amount of supply available at

low cost

Supply cost development

Significant low-cost onshore US gas supply available

0

20

40

60

80

2012 2014 2016

Bcm

LNG Mexico

-1

1

3

5

7

0 20 40 60

20092011201320152016

Tcm 0

200

400

600

650

700

750

800

Jan-14 Jan-15 Jan-16 Jan-17

Rigs, #Bcm

Source: Advanced Resources International (ARI), EIA, Springrock, Baker Hughes, Statoil

USD/MMBtu

Turn of the cycle Export outlook

• Low prices discouraged drilling

• Storage surplus turned to deficit

• Production rebound expected

• Imports shifted to export

• Growing exports to Mexico

• LNG exports taking off

17

LNG exports taking off

Page 18: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

European gas market drivers

Source: Statoil18

Page 19: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

• Coal mine shut-ins

• Chinese mining restrictions

• Demand growth in Asia

Coal prices Continental coal switching EU 28 gas consumption

• UK – carbon tax

• France – nuclear maintenance

• Coal prices – competitive fuel

• Increasing consumption in 2016

• Power demand increasing

• Normal winter weather

European demand factors

30

40

50

60

70

80

90

2014 2015 2016 2017

Coal CIF ARA API2 Year Ahead

Coal CIF ARA API2 Front month

0

100

200

300

400

500

600

2005 2010 2014 2015 2016E 2017E

Electricity/CHPOthersIndustryResidential & Commercial

Source: TFS/GDM, Argus, ICIS Heren, ICE, Eurostat, TSO’s

Forward market 3 Mar 2017

USD/ton €/MWh Bcm

0

5

10

15

20

25

30

35

2010 2012 2014 2016 2018

Coal Switching Range

TTF Gas price (€/MWh)

Forward

market

19

Coal providing help

Page 20: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

• Flexibility lost

• Potential further reductions

• Record Norwegian imports

Groningen output European storage Russian* and LNG supply

• Bullish signals for NBP

• Historic low storage levels

• High summer injection +2 Bcm/month

European supply factors

0

20

40

60

GY10/11

GY11/12

GY12/13

GY13/14

GY14/15

GY15/16

GY16/17

Cap

24

Bcm

Cap

27

Bcm

* Excluding Turkey and the Baltic region

0

25

50

75

100

Oct Dec Feb Apr Jun Aug

MIN-MAX 5 Year

5Y Average

GY 2015

GY 2016

*Excluding exports to Turkey and the Baltic region

Source: NAM, GSE, TSO’s in Europe, Gassco, Statoil

• Record high Russian supply

• Imports will continue to grow

• LNG imports will increase

0

50

100

150

200

250

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7E

Russia LNG Norway

BcmBcmBcm

20

Imports compensating for reduced indigenous production and LNG

Page 21: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

• Middle East, China and India key

growth markets

• Japan reduced

LNG demand growth 2016 LNG supply ramp-up European supply stack

• Large ramp-up in Australia and US

• Delays and shut-ins

• Growth to 2020 3% of world market

• Global LNG marginal supply to

Europe

• Russian supply flexibility

Asian development impacting Europe

-4

-2

0

2

4

6

8

10

12

14

Japan SouthKorea

China India OtherAsia

MiddleEast

Bcm

Bcm

NCS

Global

LNG

DomesticRussia

Demand

Price

300

325

350

375

400

425

450

475

500

201

2

201

3

201

4

201

5

201

6

201

7

201

8

201

9

202

0

Capacity added others

Capacity added in US

Capacity added inAustralia

Global LiqueficationCapacity

Source: IHS, Pira, Statoil

Bcm/y

21

Asian demand spurred by low prices, global LNG a price marker

Page 22: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

US gas:

• Low cost supply

• Increasing exports

European gas:

• Demand recovery

• Gas flexible source for power

• Increased import dependence

Asian gas:

• Low prices spur demand

• New emerging markets

Concluding remarks

0

5

10

15

20

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

USD/MMBtu HH-Europe band

Japan - Korea Spot LNG

Brent

NBP spot (UK)

Henry Hub (US)

Forward market

Source: ICIS Heren, ICE, NYMEX, Platts, Statoil

Forward market 3 Mar 201722

Gas markets are globalizing

Page 23: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

Creating value in a volatile futureTor Martin Anfinnsen, Senior Vice President, Marketing & Trading Image: Troll A

Page 24: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

24

Natural gas – stepping up to fill the void

1) Article from Heren, February 2017

1)

Page 25: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

Affordability

for customers• Flexibility

• Liquidity

• Effective infrastructure

Proximity

to markets• Piped gas and LNG

• Delivery within hours

• Competitiveness

Long-term

commitment• Resource potential

• Security of supply

• Scalable for low carbon

Norwegian gas – securing energy supply in Europe

Aasta Hansteen

25

Page 26: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

ASSET BACKED TRADING WEB

Value creation• Monetising on flexibility and

optionality

• Taking advantage of volatility

Capex light

• Owned or leased assets

• Contractual rights

• Quick adjustment of positions

• Margins not dependent on

commodity prices

• Cash flow across cycles

Asset Backed Trading

Cash resilient

Our response to cyclicality and volatility in the market

26

Page 27: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

Asset Backed Trading – some examples

Time• Gas production optimization

• Contango play liquids

• Storage facilities

Geography• Market optimization

• Trading

• Transport optimization

Quality• Swap piped gas to LNG

• Quality swaps liquids

• Blending

Troll

27

Page 28: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

Statoil’s contract portfolio has transformed

Modernized• Transformed into gas-indexed

• Entering into new partnerships

Flexible• Increased short-term sales

• Relationships with customers and

consumers

28

Page 29: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

Americas

North West

Europe

Statoil’s cargoes in 2016

Statoil’s LNG activities

LNG value

chain

Basis for

growth

• Expand Atlantic LNG footprint

• Develop position in Asia

• Production capacity

• Lifting agreements

• Term sales contracts

• LNG fleet

• Regasification units

29

Page 30: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

Statoil offices with natural gas business activities

Focus going forward

Premium

markets

Regional

value chains

NCS

maximization

30

Page 31: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

Concluding remarks

• Norwegian gas – competitive source of energy also fit for low-carbon future

• Future focus on premium markets and regional value chains

• Asset backed trading – monetizing on flexibility and optionality

31

Page 32: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation
Page 33: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

Closing remarks

33

• Statoil’s mid- and downstream business demonstrates resilience

• Globalizing gas markets – US onshore supply and Asian demand

• Increasing European import dependence

• Norwegian gas – competitive source of supply

Page 34: Maximizing value across value chains - Statoil Phase out of coal has started • Natural gas recovering • Nuclear phase out in early 20s • Coal generation is falling •Gas generation

E-mail: [email protected]

Investor Relations Europe

Peter Hutton Senior Vice President [email protected] +44 788 191 8792

Lars Valdresbråten IR Officer [email protected] +47 40 28 17 89

Erik Gonder IR Officer [email protected] +47 99 56 26 11

Anca Jalba IR Officer [email protected] +47 41 07 79 88

Marius Javier Sandnes Senior Consultant [email protected] +47 90 15 50 93

Anne Sofie Dahle Senior Consultant [email protected] +47 90 88 75 54

Investor Relations USA & Canada

Morten Sven Johannessen Vice President [email protected] +1 203 570 2524

Ieva Ozola IR Officer [email protected] +1 281 730 6014

Investor Relations in Statoil

34


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