Saudi Aramco 2030 by Mohamed A. Ramady

Author:Mohamed A. Ramady
Language: eng
Format: epub
Publisher: Springer International Publishing, Cham

Net proved reserves as at 31 Dec. 2016

Oil and condensate

NGL/LPG (mmbbl)

Sales gas (bcf)

Oil equivalent (mmboe)

• Estimated by Statoil

2033

372

14,637

5013

• Estimated by DeGolyer and MacNaughton

2244

324

13,685

5007

• Statoil deviation (%) from DeGolyer and MacNaughton estimates

(9.4%)

+14.8%

+6.9%

+0.12%

Source: Statoil Annual Report 2016, p. 46

As the above table indicates, Statoil’s estimated deviation from DeGolyer & MacNaughton was an overall negligible 0.12%, with conservative underestimations applied, except for gas sales.

The company’s conservatism has been guided by a clear corporate governance structure and a Board of Directors that are mostly composed of independent members, as will be discussed later, despite the fact that the Norwegian state plays a significant role in setting the country’s petroleum and licensing laws. The principal laws governing Statoil’s petroleum activities in Norway are the “Norwegian Petroleum Act” and the “Norwegian Petroleum Taxation Act.” Under the first act, the Norwegian Ministry of Petroleum and Energy is responsible for resource management and for administering petroleum activities in the Norwegian continental shelf (NCS). The main task of the Ministry is to ensure that petroleum activities are conducted in accordance with the applicable legislation and the policies adopted by the Norwegian parliament or the Storting, and decisions of the state. The Norwegian state’s policy as a majority shareholder in Statoil has been consistent: to ensure that petroleum activities create the highest possible value for the Norwegian state (Statoil 2016b). Besides this objective, there is a specific mandate, whereby Statoil markets and sells the Norwegian state’s oil and gas together with the company’s own production, and in this respect risks related to state ownership arise, something that has been highlighted earlier in this chapter. For Statoil, the interests of the majority shareholder, the Norwegian state, may not always be aligned with the interest of Statoil’s other shareholders, and this may affect Statoil’s policy decisions. Figure 4.16 sets out Statoil’s shareholding structure at year-end 2016.

Fig. 4.16Statoil shareholding as at 31 December 2016 (%). (a) Distribution of shareholders. (b) Free float breakdown

Source: Statoil Annual Report, 2016, p. 242

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