Refining ABCKjetil HaugeHead of Technical Oil AnalysisOil Trading & Supply

Outline

• Introduction to oil refining – Distillation

• Refinery configurations

– Topping

– Hydroskimming

– Cracking

– Coking

• Refinery development

• Refinery Margins -> Sandrine

Introduction to Crude oil Refining - Distillation

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Alba Brent Statfjord Sleipner

VAC. RES. VAC. GO HGO LGO KERO HVN LVN GAS

Introduction to Crude oil Refining - Distillation

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VAC. RES. VAC. GO HGO LGO KERO HVN LVN GAS

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2003 2004 2005 2006 2007 2008 2009

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Naphtha PhyscGasolineDieselHSFO 3.5%Brent Dated

Refinery type/complexity

• Majority Cracking refineries

• Increasing share of more complex refineries

• Topping refineries - small share

World Refining Capacities (Total = 90 662 kbpd)

2 3778 306

45 494

33 293

1192ToppingHydroskimmingCrackingCokingOther

Source: PIRA

Topping refineryProducts

LPG

Naphtha

Gasoline

Jet/Kero

Diesel /gasoil

Straight run fuel oil

CRUDE-DISTILLATION

Crude

LPG

Light naphtha

Heavy naphtha

Kerosin

Gasoil

Atmosphericresidue

A Topping Refinery is the simplest kind of oil refinery.It only splits the crude oil in its main components. A large portion of SR fuel oil.

World Refining Capacities (Total = 90 662 kbpd)

2 3778 306

45 494

33 293

1192ToppingHydroskimmingCrackingCokingOther

Source: PIRA

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TOP

wt%

LPGNaphthaGasolineJet/KeroDiesel/GasoilSRFOHFO

Hydroskimming refinery

Crude

REFORMER

HYDRO-TREATER

Hydrogen

Reformate

Products

LPG

Naphtha

Gasoline

Jet/Kero

Diesel /gasoil

Heavy fueloil

CRUDE-DISTILLATION

LPG

Light naphtha

Heavy naphtha

Kerosine

Gasoil

Atmosphericresidue

A Hydroskimming Refinery is a little more advanced. It has a naphtha reformer (REF) and can produce gasoline, but maintain a high SR fuel oil production.

World Refining Capacities (Total = 90 662 kbpd)

2 3778 306

45 494

33 293

1192ToppingHydroskimmingCrackingCokingOther

Source: PIRA

0

20

40

60

80

100

TOP HSK

wt%

LPGNaphthaGasolineJet/KeroDiesel/GasoilSRFOHFO

World Refining Capacities (Total = 90 662 kbpd)

2 3778 306

45 494

33 293

1192ToppingHydroskimmingCrackingCokingOther

Source: PIRA

Catalytic cracking (FCC) refinery

REFORMER

HYDRO-TREATER

H2

Reformate

Vacuumdistil-lation

CATALYTICCRACKER(FCC)

Vacuum Residue

VGOGasoil

FCC naphtha

C3/C4Olefines

AlkylateALKY-LATION

Iso-butane

ISOMERI-SATION Isomerate

Crude

LPG

Products

LPG

Naphtha

Gasoline

Jet/Kero

Diesel /gasoil

Heavy fueloill

CRUDE-DISTILLATION

Light naphtha

Heavy naphtha

Kerosine

Gasoil

Atmosphericresidue

A FCC Refinery-is a medium upgraded refinery-can convert SR fuel oil to gasoline and diesel in the FCC unit. There is still some fuel oil production.

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HFO SRFODiesel/Gasoil Jet/KeroGasoline NaphthaLPG

World Refining Capacities (Total = 90 662 kbpd)

2 3778 306

45 494

33 293

1192ToppingHydroskimmingCrackingCokingOther

Source: PIRA

Coking refinery

REFORMER

HYDRO-TREATER

H2

Reformate

Vacuumdistil-lation

CATALYTICCRACKER(FCC)

VRES

VGOGasoil

FCC naphtha

C3/C4Olefines

AlkylateALKY-LATION

Iso-butane

ISOMERI-SATION Isomerate

Crude

LPG

Products

LPG

Naphtha

Gasoline

Jet/Kero

Diesel /gasoil

Heavy fueloill

CRUDE-DISTILLATION

Light naphtha

Heavy naphtha

Kerosine

Gasoil

Atmosphericresidue

CokerGasolineDiesel/gasoilHeavy fuel oil

A Coker Refinery is the most advanced oil refinery.It upgrades most of the fuel oil to lighther products

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HFO SRFODiesel/Gasoil Jet/KeroGasoline NaphthaLPG

Coking refinery – Distribution

Coking (Total = 33 293 kbpd)

NAMLAMEuropeMiddle EastChinaRest AsiaAfricaFSUANS

Additional coking capacity 2000 -> 2009

709

318

9

1839

2024

192 141

NAM

LAM

Middle East

China

Rest Asia

Africa

ANS

Refinery development - History

• Major changes in refinery capacity in period 2000 – 2009

– Cracking an Coking close to 100% of the increase

– Hydroskimming decreasing

– Have seen marginal refinery drifting towards Cracking type refineries

Refinery capacity changes 2000 -> 2009

-1000

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Other

Coking

Cracking

Hydroskimming

Topping

Refinery development – Going forward

• Expect increasing demand on distillates on expense of gasoline

– Best margins expected on refineries producing higher share of distillates (Coking and Hydrocracking)

– Weaker margins on refineries producing high share of gasoline (FCC)

• Effectivisation of the refinery business expected (i.e. some of the refineries with lowest margins expected to close down)

– Cracking type refineries marginal refinery

Forward Looking Statements

This presentation contains certain forward-looking statements that involve risks and uncertainties. In some cases, we use words such as "believe", "intend", "expect", "anticipate", "plan", "target" and similar expressions to identify forward-looking statements. These forward-looking statements reflect current views with respect to 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; currency exchange rates; the political and economic policies of Norway and other oil-producing countries; general economic conditions; political stability and economic growth in relevant areas of the world; global political events and actions, including war, terrorism and sanctions; changes in laws and governmental regulations; the timing of bringing new fields on stream; material differences from reserves estimates; an inability to find and develop reserves; adverse changes in tax regimes; the development and use of new technology; geological or technical difficulties; operational problems; the actions of competitors; the actions of field partners; natural disasters and adverse weather conditions; and other changes to business conditions; and other factors discussed elsewhere in this report.

Additional information, including information on factors which may affect Statoil's business, is contained in Statoil's 2008 Annual Report on Form 20-F filed with the US Securities and Exchange Commission, which can be found on Statoil's web site 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 review, either to make them conform to actual results or changes in our expectations.