Equinor ASA · OSL:EQNR
Equinor ASA — Statoil — Investor Day (June 2013)
86 slides from Equinor ASA's investor day presentation, Jun 19, 2013
Slide 1: Forward looking statements
Forward looking statements This presentation material contains certain forward-looking statements that involve risks and These forward-looking statements reflect current views about future events and are, by uncertainties. In some cases, we use words such as "ambition", "continue", "could", their na
Slide 2: NCS on track
NCS on track Torgrim Reitan, Executive vice president and CFO
Slide 3: Continuing the growth story on the NCS
Continuing the growth story on the NCS Growth in all High value barrels Delivering on our Prolific exploration three basins • Break even for strategy sanctioned NCS • North Sea: • Value-driven IOR 22nd round secured project portfolio below New growth area USD 50/boe • PDO submitted on 11 quality acr
Slide 4: On track for NCS production growth
On track for NCS production growth Sanctioned Non-sanctioned START-UP 2011-2012 START-UP 2013-2016 START-UP 2017-2020 First growth wave Second growth wave Growth to accelerate towards 2021 underpinned by ramp-ups and start-ups ~ 400* ~900* ~ 1 000* mboe/d installed capacity** mboe/d installed capaci
Slide 5: Re-investing into high quality growth
Re-investing into high quality growth USD bn USD bn • 2013: ~ USD 19 bn organic capex 25 25 • 2013-2016: ~ USD 21 bn organic capex 20 20 • Producing portfolio 15 15 - 2012: USD 10 bn in free cash flow before growth 10 10 - Company value paid back in 2020 5 5 - Top quartile RoACE ** 0 0 2012* Average
Slide 6: On track for 2.5 mmboe/d in 2020
On track for 2.5 mmboe/d in 2020 mmboe/d • CAGR of ~ 2-3% from 2012-16 ~ 3-4% CAGR • CAGR of ~ 3-4% from 2016-20 2.5 ~ 2-3% CAGR • Production 2013 estimated to be lower than 2012 due to: - Divestments - US onshore gas - Gas flexibility - In Amenas uncertainty - Ormen Lange redetermination 7
Slide 7: NCS on track
NCS on track Torgrim Reitan, Executive vice president and CFO www.statoil.com
Slide 8: NCS – delivering on strategy
NCS – delivering on strategy Øystein Michelsen, Executive vice president, Development and Production Norway
Slide 9: Successful strategy execution
Successful strategy execution Continue portfolio Revitalise NCS management to with high enhance value value barrels creation Apply technology Production above Create value to expand in 2.5 mill boe/d from a superior unconventionals in 2020 gas position Develop a Build material leading global positio
Slide 10: Safe and efficient operations
Safe and efficient operations Safe operations Continued focus on operational excellence Serious Incident Frequency (SIF) 8 • Improved serious incident frequency 4 • Lifting cost below industry average • Pursuing economies of scale 0 2001 2005 2009 2013 YTD Unit lifting cost * NOK/boe 50 0 2008 2009
Slide 11: Continue the growth story on the NCS
Continue the growth story on the NCS CMD June 2011 250 mboe/d New production starts since 2011 mboe/d • Ormen Lange Mid North • Skuld 800 • Marulk • Hyme Non Sanctioned • Skarv • Stjerne Sanctioned • Smørbukk NE • Vigdis NE • Visund South 0 2012 2020 250 mboe/d New sanctioned projects since 2011 0 2
Slide 12: Maximising value of producing fields
Maximising value of producing fields Resource growth mboe Net to Statoil, 2010-2012 • Value driven IOR ambition 1200 • Significant reserve additions • A value based means to fight decline 0 IOR PROJECTS IOR ambition Share of future investments %, 2012-2016 100% Green field Wells IOR Producing fields
Slide 13: A new growth area in the North Sea
A new growth area in the North Sea North Sea: Materiality towards 2020 mboe/d North Sea Sleipner/Utsira growth 1 000 0 2012 2020 Sleipner/Utsira area: Revitalised mboe/d 300 Sleipner/Utsira growth Non sanctioned Sanctioned Producing 0 2012 2020 6 * Statoil Share
Slide 14: Unlocking the potential in the Norwegian Sea
Unlocking the potential in the Norwegian Sea mboe/d 600 Aasta Hansteen Norwegian Sea 0 2012 2020 7 * Statoil Share
Slide 15: The Barents Sea – industrialising a new frontier
The Barents Sea – industrialising a new frontier mboe/d 160 Barents Sea Johan Castberg 0 2012 2020 • Johan Castberg – reconsidering concept • Ambitious exploration drilling continues The world’s northernmost oil field • Award 22nd Concession Round • Opening Barents Sea southeast 8 * Statoil Share
Slide 16: On track and moving forward
On track and moving forward Progress since February 2013 Production • Four new projects have added 60,000 boe/d of new production in 2014 Field development • PDO submitted on the 11th fast track – Oseberg Delta 2 project • PDO approval of four projects • Reconsidering Johan Castberg concept Explorat
Slide 17: NCS – delivering on strategy
NCS – delivering on strategy Øystein Michelsen, Executive vice president, Development and Production Norway www.statoil.com 10 Classification: Internal 2013-05-30
Slide 18: Quality in project execution
Quality in project execution Margareth Øvrum, Executive vice president, Technology, Projects and Drilling [TPD]
Slide 19: Strategy execution
Strategy execution – from the perspective of Technology, Projects and Drilling [TPD] 2
Slide 20: Revitalising the Norwegian continental shelf
Revitalising the Norwegian continental shelf Kvitebjørn Åsgard subsea compression Pre-compression module lift-in Topside module load-out Template load-out Kristin Gudrun Valemon Low pressure production module load-out Topside sail-away Living quarter load-out 3
Slide 21: In control of project execution
In control of project execution Health, safety and environment Cost development Serious Incident Frequency (SIF) From sanctioned to current Schedule Projects delivered on time 4
Slide 22: Gudrun delivering
Gudrun delivering Status • On schedule • Around USD 350 million below sanctioned cost estimate Success factors • Playing the market • Scope management • No late changes 5
Slide 23: Fast track success
Fast track success Fast track project Status Fast track project in production • First wave of five Fast track candidate Exploration well fast-track projects delivered with fast track potential • USD 170 million below sanctioned cost estimate on facility Success factors • Clear objectives • One unit
Slide 24: Meeting the execution challenge
Mitigation Early phase Challenges quality Magnitude and complexity Standardisation and industrialisation Meeting the Globalised execution execution Cost discipline challenge Increased and efficiency portfolio risk Improved planning and supplier interface 7
Slide 25: Pursuing future standardisation potential
Pursuing future standardisation potential Relevant business cases Ambitions and potentials to be achieved Fast track Johan Castberg Target: Systems and equipment standardised • 50% reduction on time for re-use on Johan Sverdrup. • 30% reduction on cost Pilot for simplification of technical requireme
Slide 26: The value of new technology
The value of new technology Statoil looking into high impact technologies for Johan Sverdrup - possible value added through increased recovery and reduced capex Permanent reservoir monitoring Inflow control devices Improved production efficiency Look ahead while drilling Thermo mechanical cuttings c
Slide 27: Summary
Summary • A strong project portfolio • Strong track record • Meeting the execution challenge − Early phase quality − Standardisation and industrialisation − Cost discipline and efficiency − Improved planning and supplier interface • Balancing technical innovation and standardised solutions 10
Slide 28: Quality in project execution
Quality in project execution Margareth Øvrum Executive vice president, Technology, Projects and Drilling [TPD] www.statoil.com
Slide 29: A dynamic and robust NCS portfolio
A dynamic and robust NCS portfolio Ivar Aasheim, Senior vice president, Development and Production Norway, Field Development
Slide 30: A dynamic and robust portfolio on the NCS
A dynamic and robust portfolio on the NCS New major developments GUDRUN VALEMON GINA KROG AASTA HANSTEEN JOHAN SVERDRUP JOHAN CASTBERG Short term production Short term production Supporting the Sleipner Pioneer in deep World class discovery Door opener to a new contribution contribution area strateg
Slide 31: Value creation through fast tracks
Value creation through fast tracks Speeding up the Norwegian Continental Shelf • 2.5 years from discovery to production • Outstanding value creation • Equity production of 100 mboe/d in 2014 Significant production contribution mboe/d 150 0 2012 2020 3
Slide 32: Johan Sverdrup
Johan Sverdrup – Production horizon towards 2050 Is the result of 40 years of JOHAN development and activities at Concept selection PDO submission Q4 2013 Q4 2014 SVERDRUP on the Norwegian shelf. This is the opportunity to advance Production start Q4 2018 PL501 PL265 PL502 history several steps 4
Slide 33: Aasta Hansteen – Opening a new gas province
Aasta Hansteen – Opening a new gas province in the Norwegian Sea Aasta Hansteen Norne Skarv Heidrun Åsgard Kristin Tyrihans Linnorm Njord Ormen Lange Stjørdal Statoil operated Aasta Hansteen Partner operated Nyhamna 5
Slide 34: Johan Castberg – Reconsidering concept
Johan Castberg – Reconsidering concept • Resources: 400-600 mmboe • Floating production unit (Skrugard and Havis) • Pipeline to Veidnes • Reservoir depth: 1300-1800 m • Expansion opportunities • High quality oil Johan Castberg 6
Slide 35: In short
In short • Solid project portfolio with large diversity • Fast track projects – creating significant value and volumes • Johan Sverdrup – moving towards execution with a solid foundation • Aasta Hansteen – a key to further development of the Norwegian Sea • Johan Castberg – Barents Sea area opener –
Slide 36: A dynamic and robust NCS portfolio
A dynamic and robust NCS portfolio Ivar Aasheim Senior vice president, Development and Production Norway, Field Development www.statoil.com
Slide 37: Gullfaks creating value
Gullfaks creating value Øystein Arvid Håland, Senior vice president Development and Production Norway, Operations West
Slide 38: Statoil's ambition for oil recovery rate
Statoil’s ambition is a 60 % oil recovery rate 50 % 60 50 30 % 40 Percentage 30 Statoil-operated NCS Recource Class 4A/5A/7A 20 Unrisked volumes 100 % Share 10 0 Recovery rate PDO Recovery rate now Drilling & Well Average for Statoils operated fields on NCS 2 * Ambition on recovery rate is related t
Slide 39: Improved recovery potential
Improved recovery potential • A reliable map is key • The drainage strategy is built on a full field simulation model • 3D seismic has proven successful in Gullfaks 3
Slide 40: Pioneering subsea multiphase compression
Pioneering subsea multiphase compression Upper motor Compressor Lower motor 4
Slide 41: A new business model for enhanced value creation
A new business model for enhanced value creation Strategic Oseberg and Gullfaks license ownership Considerably lower cost of drilling in a 10-year perspective More efficient drilling and completion machine 5
Slide 42: Gullfaks new resource perspective
Gullfaks new resource perspective • Promising Lista/Shetland discovery • Recoverable volume 40-150 mmboe • Further upside potential 6
Slide 43: Summary - legacy asset continues to perform
Summary - legacy asset continues to perform • New technology increases recovery • Cat J – new business model drives value creation • Lista/Shetland indicates further potential 7
Slide 44: Gullfaks creating value
Gullfaks creating value Øystein Arvid Håland, Senior vice president Development and Production Norway, Operations West www.statoil.com 8
Slide 45: A leading exploration company
A leading exploration company Tim Dodson Executive vice president, Exploration Classification: Internal 2013-04-26
Slide 46: A leading exploration company
A leading exploration company 2012 exploration value creation 2012 volumes discovered US$bn mmboe Source: Rystad Energy, UCube Source: IHS, EDIN 2
Slide 47: A strong portfolio
A strong portfolio Risked resources Resource additions 2011-2014 2200 2000 ~6 0.9 1.5 1.0 ~6 1800 1600 P10 P10 1400 million boe billion boe 1200 1000 800 P90 600 400 YTD* P90 200 0 2012 2012 2012 new 2013 2011 2012 2013 2014 tested discovered prospects since 2012 41 wells >50 wells 3 * YTD as of 31
Slide 48: Clear exploration strategy
Clear exploration strategy Early access at scale Drill high impact wells Exploit core positions East Canada ? Norway ? ? ? Caspian Angola YTD ? ? Gulf of ? ? Mexico East Africa Brazil • Accessing future core areas • >250 mmboe gross or • Two core areas and • Focusing on play openers >100 mmboe net f
Slide 49: How we work
How we work Early access at scale One business area Strategy More high impact wells Entrepreneurial spirit Exploit core position Technology focused 5
Slide 50: 2013 planned activity
2013 planned activity • >50 wells (~ 20 % appraisals) • USD 3,5 bn exploration expenditure • ~ 20 high impact wells (2013-2015) • Several play openers • Balanced portfolio 6 * ILX: Infrastructure-led exploration
Slide 51: A taste of wells to watch in 2013
A taste of wells to watch in 2013 Norway Several HIW’s • Bay du Nord Canada High value (East Coast Canada) 3 HIW’s Oil & Gas portfolio Play openers • Sake Oily portfolio Indonesia (Gulf of Mexico) East Africa 2 HIW’s 2-4 HIW’s Play openers Play openers Gas & Oil GoM Gas & Oil portfolio portfolio 1 H
Slide 52: New access 2013
New access 2013 High volume potential • NCS 22nd round • Australia farm-in • Brazil licence round • Tanzania block 6 • GoM lease sale 8
Slide 53: Large on-going exploration deals
Large on-going exploration deals MoU with SOCAR Strategic cooperation with Rosneft 9
Slide 54: Well positioned in exploration hot-spots
Well positioned in exploration hot-spots High impact exploration plays 2013 according to Energy Intelligence: 10 Source: Energy Intelligence (EI)
Slide 55: A leading exploration company
A leading exploration company Tim Dodson Executive vice president Exploration www.statoil.com 11
Slide 56: Norway – an exploration hot spot
Norway – an exploration hot spot Gro Gunleiksrud Haatvedt Senior vice president, Exploration Norway Classification: Internal 2013-04-26
Slide 57: Norwegian Sea
Revitalise NCS with high value barrels New discoveries 2003 – 2013* High value barrels Updated YTF** next 10 years 10000 Statoilcost Finding finding cost, 3 year USD/boe, average 3 year average Barents Sea Million boe > 2,5 bn boe USD/boe 0 15000 Norwegian Sea Million boe 2008 2009 2010 2011 2012 >
Slide 58: 2013: High activity and strong results
2013: High activity and strong results Barents Sea exploration campaign Status 17.06.13 Lovund Rhea Gullfaks (Lista Fm.) Norne area 25-30 exploration Grane F and appraisal wells Halten area Luno II (op. Lundin) as operator / partner JS Kvitsøy JS Extension Tampen area JS Fault Margin Fram/Gjøa area
Slide 59: Follow the oil on Utsira High
Follow the oil on Utsira High Cliffhanger North area 2012-2013 Recap: Discoveries 16/2-12 • 2012: Geitungen discovery Edvard • 2013: Johan Sverdrup extension discovery Grieg Johan Sverdrup • 2013: Luno II discovery (Lundin operator) Luno II Equity 16/5-3 Utsira Southern flank • Statoil farm-in to Ed
Slide 60: Exploration step-up in the Barents Sea
Exploration step-up in the Barents Sea 2013 2014 Atlantis Exploration program* Q2 Q3 Q4 Q1 Q2 Apollo Johan Castberg area Wisting Nunatak Iskystall Skavl Norvarg appr. Kramsnø Kramsnø Nunatak Skavl Hammerfest Basin Johan Castberg Iskrystall Ensis Ensis Hoop area Wisting (operator OMV) Snøhvit Apollo
Slide 61: Many new opportunities being explored in Johan Castberg area
Many new opportunities being explored in Johan Castberg area 3D view from NW N 7219/9-1 0 km 10 Top Realgrunnen Subgroup Depth Map (Top Lower – Middle Jurassic reservoir) 6
Slide 62: Direct hydrocarbon indicators in Hoop prospects
Direct hydrocarbon indicators in Hoop prospects Apollo Apollo appr* Atlantis Atlantis to Apollo transect Top Realgrunnen amplitude, seen from North 7 * Optional, timing not decided
Slide 63: New high quality acreage awarded
New high quality acreage awarded 22nd concession round awards – Barents Sea • 7 licences including 3 operatorships • Almost 5000 km2 gross • Balance of frontier, play opening opportunities and growth potential in the Johan Castberg area 8
Slide 64: Unlocking the growth potential in mature and unexplored basins
Unlocking the growth potential in mature and unexplored basins • Frontier petroleum system projects − Unlock potential in unexplored / underexplored areas • Growth projects in proven basins − Mature areas with good remaining hydrocarbon potential 9
Slide 65: Norway is an exploration hot spot
Norway is an exploration hot spot • Drilling campaign in the Barents Sea • Exciting 22 concession round award • Creating new material ideas by using our leading capabilities 10
Slide 66: Norway – an exploration hot spot
Norway – an exploration hot spot Gro Gunleiksrud Haatvedt Senior vice president Exploration Norway www.statoil.com
Slide 67: Cracking the subsurface code
Cracking the subsurface code Audun Groth, Senior specialist; Mario Vigorito, Leading advisor; Ole J. Martinsen, Senior advisor Classification: Internal 2013-04-25
Slide 68: Cracking the subsurface code
Cracking the subsurface code Agenda 1. Leading exploration capabilities East African rivers of the past contributed reservoir sand from onshore Africa to offshore areas and link to strategy • Ole J. Martinsen, Senior advisor 2. Cracking the subsurface code through high-end seismic interpretation • A
Slide 69: Leading exploration capabilities: the Statoil way
Leading exploration capabilities: the Statoil way Upstream technology focus, success in various plays, large toolbox, strategy Seismic People and teams Geological insight The ultimate result: discovery! 3 3
Slide 70: Early access approach
Early access approach Proprietary global techniques Plate tectonic studies • 4D Plates: in-house proprietary tool Global Source Rock Catalogue Petroleum systems analysis 4D Plates – Basin development tool • Global source rock catalogue • Source rocks from seismic (SRfS) − Award-winning technology (A
Slide 71: Exploiting core positions and drilling more high impact wells
Exploiting core positions and drilling more high impact wells Proprietary global techniques Analysing core is critical to Classic reservoir studies understanding subsurface • Core description and its importance uncertainty Classic petroleum systems analysis • “Follow the hydrocarbons” Seismic acquis
Slide 72: Cracking the subsurface code
Cracking the subsurface code Ole J. Martinsen, Dr. sc. Senior Advisor Exploration www.statoil.com 6
Slide 73: Introducing the Sleipner Area
Introducing the Sleipner Area Marit Berling, Vice president Operations
Slide 74: Sleipner
Sleipner An European gas hub Daily Production Sleipner Gas 19 000 K Sm3/d Cond. 9 000 Sm3/d 2
Slide 75: The Sleipner Area
The Sleipner Area Photographic overview Infrastructure Volve Sleipner East Oct. 1993, Sleipner West Aug. 1996, Gungne and Loke; satellite from Sleipner Øst, and Alfa Nord; satellite from Sleipner Vest 3
Slide 76: CO2 management
CO2 management Carbone Capture and Storage Illustration of the Utsira reservoir (CCS) (Sleipner West) • Every year since 1996, we have captured one million tons of carbon dioxide • The Utsira reservoir more than 800 meters below the seabed 4
Slide 77: Sleipner and Utsira High Area
Sleipner and Utsira High Area • Growth area Grane • Supporting Statoil’s production goals Ivar Aasen Edvard Grieg • Revitalising NCS with high Gudrun value barrels Sleipner/Utsira area: Revitalised mboe/d Johan Eirin 300 Sverdrup Sleipner/Utsira growth Non sanctioned Gina Sanctioned Krog Volve Produ
Slide 78: Hub for gas processing and export
Hub for gas processing and export Sleipner area 66
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Slide 80: Introducing the Sleipner Area
Introducing the Sleipner Area Marit Berling Vice president Operations www.statoil.com
Slide 81: Introducing Gullfaks Area and Gullfaks A
Introducing Gullfaks Area and Gullfaks A Kåre Telnes Platform Manager
Slide 82: Gullfaks
Gullfaks Daily production Gullfaks Area Gas 28 mSm3/d Cond. 18 700 Sm3/d 2
Slide 83: Third party tie-ins
Third party tie-ins Schematic of the Tampen area Gullfaks third party tie-ins 2012 Production (NPD) Field Host Type of Agreement kboepd MSm3 oe Well stream processing, delivery of Tordis GFC 4.4 0.3 injection water, oil and gas export Vigdis GFA Receipt and redelivery of export oil 37.6 2.2 Visund G
Slide 84: Layout
Layout 4
Slide 85: Gulltopp – Longest well drilled offshore
Gulltopp – Longest well drilled offshore • Well 34/10 A-32C • Total depth 9910 meters • 763 km drillpipe in/out to achieve target 5
Slide 86: Gullfaks A
Gullfaks A Kåre Telnes, Platform Manager www.statoil.com