Norsk Hydro Asa · OSL:NHY
Norsk Hydro Asa — Investor Day (January 2002)
25 slides from Norsk Hydro Asa's investor day presentation, Jan 8, 2002
Slide 1: Capital Markets Day Hydro Oil & Energy
Capital Markets Day Hydro Oil & Energy Executive Vice President Tore Torvund Norsk Hydro ASA Oslo, January 8, 2002
Slide 2: Hydro Oil and Energy
2 Hydro Oil and Energy Competitive edge: Offshore Operator production mill. barrels/day ● Large operator 2000 ● Strong and innovative 1500 technology 1000 ● Commercial track record 500 0 Norsk Hydro Source: Oil & Gas Journal McKinsey 33047_5 - 01.2002 - * 2 - Hydro Media
Slide 3: Oil and Energy 2001 delivery
3 Oil and Energy 2001 delivery Objectives CMD Actions taken December 2000 ● Snorre B, Girassol and Terra Nova Production growth ● 2001 production in line with revised forecast ● 5-6% CAGR* 2001 - 2005 ● 30% awarded in Angolan block 34 International build up ● Farm-in Gulf of Mexico and Angolan block
Slide 4: Improving performance in 2001
4 Improving performance in 2001 ● Maintain positive safety trend ● Maintain operating performance in first quartile ● Delivering projects on cost and schedule ● High-grading of global exploration portfolio ● Divestment of non-core licences ● Capital discipline 33047_5 - 01.2002 - * 4 - Hydro Media
Slide 5: Production 2001
5 Production 2001 1000 ● NCS oil production in line boe/day with expectations 500 435 415 ● Lower customer gas off- 400 take Gas Oil int. ● Lower international oil 300 production due to delayed start up new fields Oil 200 Norwegian Shelf 100 0 CMD Dec. 2000 2001E 33047_5 - 01.2002 - * 5 - Hydro Medi
Slide 6: Growth within existing portfolio
6 Growth within existing portfolio Capital Markets Day Production Forecast December 2000 January 2002 Production 1,000 boe/day Production 1,000 boe/day 700 700 600 600 500 500 400 400 Exploration 300 300 200 Projects 200 100 Reserves 100 0 0 2000 2001 2002 2003 2004 2005 2000 2001 2002 2003 2004 200
Slide 7: International activity
7 New fields on stream 2002 - 2005 Development International activity Terra Nova 20,000 boe/day PDO Submittal Jasmin 5,000 PDO Approval/ Sanctioning Dalia 20,000 Start Production 2005 Rosa/Lirio 8,000 2005 Kharyaga 2 9,000 (phase 1-2) NCS Operator Tune 22,000 Grane 50,000 Vale 6,000 Fram Vest 15,000
Slide 8: Strong production growth
8 Strong production growth 1,000 boe/day 700 05 ; 5-6% 600 200 1-20 CAGR 500 400 300 200 100 0 1998 1999 2000 2001E 2002E 2003E 2004E 2005E Oil; Norway and Int. Oil Norway Oil Int. Gas NCS production cut first half 2002 included 33047_5 - 01.2002 - * 8 - Hydro Media
Slide 9: Norsk Hydro — main events on NCS 2001
9 Norsk Hydro — main events on NCS 2001 ● Snorre B and Gullfaks satellites in production ● Vesterled gas pipeline in Norne operation Åsgard ● Snøhvit, Kristin and Mikkel Njord development plans submitted Ormen Lange ● Satellite discoveries around Snorre area Oseberg and Snorre Statfjord Visund Gullf
Slide 10: International activities — 2001 main events
10 International activities — 2001 main events Russia Kharyaga Shtokman East Coast Canada Libya: 4 finds Iran Gulf of Mexico T&T Block 27 Angola 33047_5 - 01.2002 - * 10 - Hydro Media
Slide 11: Angola — an area of significant growth
11 Angola — an area of significant growth ● Girassol start up December 2001 ● Another two finds in Block 17 declared commercial ● Award of Block 34 - 30% equity ■ Co-operation with Sonangol, Hydro technical assistant ■ Application of NCS experience ● Block 25 farm in - 10% equity 33047_5 - 01.2002 -
Slide 12: Canada — further developments
12 Canada — further developments ● Hibernia - stable production ● Terra Nova - on stream January 2002 ● New find in Terra Nova Far East ● Hebron - on schedule for concept selection 2002 ● Successful deep water acreage bid - Scotian Shelf 33047_5 - 01.2002 - * 12 - Hydro Media
Slide 13: US — Gulf of Mexico Potential new core area
13 US — Gulf of Mexico Potential new core area ● Comprehensive farm-in deal with Conoco ■ Hydro 25% working interest in 55 leases ■ Option for participation in 178 leases through 2005 ● Evaluation of further joint business development activities Location of exploration areas 33047_5 - 01.2002 - * 13
Slide 14: Iran — Anaran Exploration Contract
14 Iran — Anaran Exploration Contract ● Exploration area of 3 260 km2 Anaran ● Mine clearance & seismic Ghare Bur Anticline Changulehl Iran acquisition in 2001 and 2002 Azar SE Changuleh ● First well expected Q3 2002 NW Dehluran Iraq N Dehluran LEGEND Lead Prospect Dehluran Oilfield Musian Abu Ghira
Slide 15: 2002 — shift in exploration focus
15 2002 — shift in exploration focus Exploration - 2002E MNOK Norway International 2000 Canada GoM 1500 Angola 1000 Iran 500 Norway Libya, Russia, 0 Trinidad 1999 2000 2001E 2002E & Tobago 33047_5 - 01.2002 - * 15 - Hydro Media
Slide 16: Exploration 2002 — significant wells
16 Exploration 2002 — significant wells Well expec. Location Norsk Hydro share finalised NCS Solsikke 50% 3Q 2002 Canada - Anapolis 25% 1Q 2002 Canada - Flemish pass 30% 3Q 2002 Trinidad Tobago - Catfish 19% 1Q 2002 Angola Block 34 30% 3Q 2002 GoM - 3 wells 25% 2002 Iran - Anaran 100% 3Q 2002 33047_
Slide 17: Third largest gas producer on the NCS
17 Third largest gas producer on the NCS Norsk Hydro expected natural gas production BCM ● Total Norwegian gas export 15 2010 approx. 110 BCM ● Company based sales 10 introduced ● Market development ■ Continental market driven 5 by gas to power needs ■ UK - need for imports 0 ■ New markets; Scandina
Slide 18: Ormen Lange — the most important gas discovery since Troll
18 Ormen Lange — the most important gas discovery since Troll ● Reserves: 400 bcm ● Hydro operator for the most challenging development on NCS ● Market gas at competitive costs; Target; 2 USD/mill. BTU ● Plan for development 4Q 2003 ● Production start 2007 33047_5 - 01.2002 - * 18 - Hydro Media
Slide 19: Still large undiscovered gas resources on the Norwegian Shelf
19 Still large undiscovered gas resources on the Norwegian Shelf ● 17th round application deadline in March ■ Focus on gas offshore mid-Norway Halten, Møre and Vøring Total of 2200 bill Sm3 gas Undiscovered In production/evalu. Oslo Discovered Source: NPD, expected volume 33047_5 - 01.2002 - * 19 -
Slide 20: Flexibility gives value creation
20 Flexibility gives value creation ● Equity sales from NCS: 6 bcm 2002 Ormen Lange ● Marketing (mainly based on third Snorre party sourcing): 9 bcm 2002 Statfjord Gullfaks Mongstad Oseberg Troll Sture Kollsnes Bergen Heimdal Oslo Kårstø Sleipner Stavanger St. Fergus Cruden Bay Ekofisk Teesside Dorn
Slide 21: Norsk Hydro has the ability to commercialise gas in a liberalising market
21 Norsk Hydro has the ability to commercialise gas in a liberalising market Emden Targeted Dutch end user Noordbroek sales in 2002: Balgzand ■ 300 end-users ■ 4.7 bill. sm3 (incl. portfolio management) Maasvlakte ■ Approx. 20% of Dutch industrial market Hydro Agri Sluiskil Hydro Sluiskil - Europe’s
Slide 22: Commercial innovation
22 Commercial innovation BCM ● Norsk Hydro natural gas sales 10 mainly based on third party 9 sourcing 8 7 ● Low capital requirement 6 ■ Trading 5 ■ Good margins: EBITDA of 4 100 MNOK 1- 3Q 2001 3 ■ Customers 2 ■ Industrial customers 1 ■ Internal consumption 0 ● Operations based in Brussels 1999 200
Slide 23: F&D costs tracking down towards target
23 F&D costs tracking down towards target F&D costs excl. sale & purchase 200 20 Fields assumed 17.5 Year booked Reserve Replacement (%) 150 F&D costs (USD/boe) 15 Kristin, Mikkel, 2001 Sigyn, Rosa 100 12.5 Lirio, Jasmin 10 Snøhvit, Hebron, 50 7.5 2002 Murzuk A, Mabruk East 5 0 Ormen Lange, 2.5 2003
Slide 24: Key messages
24 Key messages ● Production growth 2001 - 2005 expected to average 5 - 6% ● Key exploration prospects to be tested in 2002 ● Using commercial innovation to add value to Norsk Hydro's upstream gas position ● F&D costs on track towards USD 5/bbl 33047_5 - 01.2002 - * 24 - Hydro Media
Slide 25: Safe harbour statement
25 Safe harbour statement In order to utilize the "Safe Harbor" provisions of the United States Private Securities Litigation Reform Act of 1995, Hydro is providing the following cautionary statement: This presentation contains certain forward-looking statements with respect to the financial conditi